Third Mobile Licensing Underway

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TM International Bhd (TMI), in partnership with two Iranian companies, is bidding for Iran's third public mobile network license.

TMI's wholly owned subsidiary, Indocel Holding Sdn Bhd, on Wednesday, entered into an agreement with Fanavari Moudj Khavar, JSC (Fanamoj) and Sarmayegozari Atiyeh Saba, JSC to form an unincorporated consortium to vie for the 15-year license.

According to Fars News Agency, TMI said the consortium would set up an operating company in Iran within 45 working days if it was awarded the license. The Communications Regulatory Authority of Iran (CRA) had last September issued an invitation for tender for the award of the license. Applicants have first to go through a prequalification process.

Prequalified Bidders
TMI said CRA is expected to announce the prequalified bidders on Saturday.

The operating company would have to be created with a paid-up capital of at least 50 percent of the upfront license fee, which is at least the Iranian rials equivalent of 150 million euros.

"As required by the regulations, the Iranian partners will hold a combined 51 percent equity interest in the company through Fanamoj and Atiyeh Saba. Meanwhile, TMI will hold the remaining 49 percent equity interest through Indocel," TMI said in a filing to Bursa Malaysia.

Saying that the cellular license to be issued was a national 2G and 3G cellular mobile license, which includes exclusivity for 3G, TMI said the license would enable the operating company to become a national mobile operator with a bigger addressable market.

It said the successful bidder would have exclusivity for two years, giving it a unique advantage in leveraging the data users and to target high-end customers.

TMI already has operations in Iran through its 49 percent stake in Mobile Telecommunications Company of Isfahan (MTCI), which has a license to provide mobile telecommunications services in the Isfahan province only. The condition of the license limits MTCE's total number of subscribers to only 35,000.

Iran, with a population of 73 million and a 56 percent mobile penetration as of September 2008, currently had only two national mobile operators--TCI and MTN IranCell, both of which did not have a 3G mobile license. The average revenue per user (ARPU) is approximately S$9.

Potential Buyers
TMI also operates in Indonesia through Indocel, which holds 83.8 percent of PT Excelcomindo Pratama Tbk (XL), a company listed on Indonesia's stock exchange since 2005. XL operates a GSM mobile network and provides services in Indonesia in two allocated bandwidths of GSM 900 and GSM 1800.

However, the bidding for the third mobile license will not be over until the end of the year, the firm advising the Iranian government on bidding said.

"There has been no winner yet since the process will not finish before the end of the year," Zeljko Ivic, an official at Dubai-based Millennium Finance Corporation which is advising Iran, told Reuters.

Ivic said Malaysia's TM International, which said earlier that one of its units had signed a deal for the license, was still in the running. "TMI is one of the potential buyers in the running," he said.

Some media reports said this month that the result of technical bids for the third mobile license would be announced on November 30, and the winners of that round would have till January 11 to submit financial bids.

Meanwhile, RCom, one of India's leading mobile operator, is also considering to bid for Iran's third mobile licence worth $1 billion.

"Reliance has shown interest to bid for the tender and will compete with firms from Russia, Turkey and Malaysia for the tender, the bids for which will be called within a month," India papers said.

Qatar Telecommunications CoQatar Telecommunications Co. also said it was studying the possibility of bidding for Iran's third mobile licence as it looks to expand into new markets.

"As a communications market with a significant potential for growth and development, the Islamic Republic of Iran represents a potential area of investment opportunity," the telecom operator said in a statement on the Doha bourse's website.

"QtelQtel has not entered into any partnership in relation to this project. At present, it is studying the opportunity and will announce its intentions upon completion of its review."

The license winner would be the lowest bidder to be named on January 12.

© Iran Daily 2008