opinion


Iran’s ICT industry held back by the lack of 3G

Iran is the largest mobile market in the Middle East

Despite a difficult operating environment and various restrictions on the operators’ ability to develop their infrastructure, Iran has one of the highest SIM penetrations in the Middle East, reaching 98.27 per cent at end-1Q11. The country’s high penetration is partly due to its multiple-SIM uptake, but is also due to the demand for mobile telephony services in a majority-youth market.

The lack of data services is still the main obstacle for growth with TCI and MTN aggressively trying to provide data services. However, promotional activity is limited and the operators are not able to provide a varied and attractive range of data services due to their technological constraints. More attractive local content is needed – only local content is allowed and there are very few content providers in Iran. In addition to this, what content is available is not compatible due to low quality (low speeds and lack of infrastructure); therefore the speed of content production is not keeping up with the demand. This situation is mainly due to the lack of 3G services in the market and the delayed launch of Tamin Telcom’s operations.

Faced with various difficulties, Tamin Telecom has been unable to pilot its services and has had to delay its commercial launch until 1Q12. The operator, which has been granted Iran’s only 3G license, has seen its board members replaced four times and is struggling to find the financial backing to launch its 2G and 3G network. It has not been able to secure enough vendors to roll out its network and the sanctions on the country and the lack of foreign investment make it difficult to source the necessary equipment.

Although the regulator is pushing for a launch, it is aware of the difficulties that Tamin Telecom is facing and therefore has not imposed any fines for a late launch. No complaints have been made from the other operators in Iran due to the changes in the exclusivity agreement. The other operators can now look to launch 3G services two years after the provision of the license rather than the launch of commercial services. Due to the delayed launch of WCDMA services, the regulator has started to play more of a role in the development of the country’s ICT industry in order to spur competition in the market. It is considering mobile payment services after a successful pilot by TCI and is studying the possibility of having an MVNO in the Iranian market.

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