Arab Advisors Group
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Iran’s latent GSM potential is at the threshold of energizing the regional GSM landscape.
Thursday, December 11, 2003

As bidders prepare to submit their pre qualification documents for Iran’s second GSM license on Dec 15, the unleashing of Iran’s true GSM potential will be underway. Expected Duopoly competition, and full competition after 2006, are projected to increase Iran’s GSM penetration to over 23% by 2007, up from 4.3% in 2003. Total GSM revenues generated between 2004 and 2007 are projected to exceed US$ 8.6 billion. The potential presents massive opportunities for international and regional operators and vendors.

December 11, 2003 -

Iran’s ongoing third five year economic plan has grand ambitions for the Iranian telecom sector that are about to be unleashed. The plan created an Independent Regulatory Body and calls for the removal of Government monopoly in telecommunication industries in addition to attracting international and regional investors in the sector.

A new comprehensive report, “Iran Communications Market Outlook” was released by the Arab Advisors Group ( on December 11, 2003. The 23-page report, analyses the Iranian fixed line and cellular landscape, details the preliminary license conditions and profiles the operators and vendors operating in Iran. This report can be purchased from Arab Advisors Group for only US$ 850. Any investment in this report will count towards a Strategic Research Service subscription should the service be acquired within three months from purchasing the report. Purchasing the report also entails the ability to attend the Arab Advisors Group’s Media and Telecommunications Convergence Conference in June 2004 in Amman. Please contact the Arab Advisors Group to receive the report’s Table of Contents.

“On the cellular front, Iran’s current mobile subscriber base stands at approximately 2.9 million, with recent contracts awarded to expand the GSM capacity to 3.5 million.” Yaman Al Jundi, Arab Advisors analyst wrote in the report. “Even with the expansion, the waiting period for subscribers to acquire an effective connection is one year, with an upfront payment of US$ 525. The demand for mobile services far exceeds the current supply available.” He added.

The Iranian Ministry of Post, Telegraph and Telephone is undergoing a process of issuing a tender for a nationwide GSM license and aims at raising the GSM penetration rate to 30% by 2006. The Arab Advisors Group, however, projects the fixed line penetration to only reach 22% by end of 2007, and the mobile penetration to only reach 23% by end of 2007. This is because the new mobile entrants will have paid substantial amounts in upfront license fees (300 million EUROs in addition to a proposed revenue sharing percentage that will be a major factor in awarding the license). The need to recoup the massive investments in network and license fees will hinder unreasonable price reductions. Still, the Arab Advisors Group expects the number of cellular subscribers to exceed that of mainlines in 2007 and the Total GSM revenues generated between 2004 and 2007 to exceed US$ 8.6 billion.

This upcoming massive growth presents major opportunities for equipment vendors. Currently, Siemens, Ericsson and Nokia are well entrenched in the GSM infrastructure equipment landscape in Iran. Other vendors are surely keenly interested in securing a foothold in what promises to be the largest Middle Eastern GSM market west of the Suez canal.

The Arab Advisors Group’s team of analysts in the region has already produced close to 200 reports on the Arab World’s communications and media markets. The reports can be purchased individually or received through an annual subscription to Arab Advisors Group’s ( Strategic Research Services (Media and Telecom). To date, Arab Advisors Group has served more than 100 global and regional companies by providing reliable research analysis and forecasts of Arab communications markets to these clients.

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