Iran General NewsTurkish firm thrown out of Iran mobile phone deal

Turkish firm thrown out of Iran mobile phone deal

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AFP:Turkish telecoms giant Turkcell was Sunday thrown out of a deal to build Iran’s second mobile telephone network in the latest twist to a rollercoaster business deal that has badly hit Iranian-Turkish relations. AFP

by Farhad Pouladi

TEHRAN – Turkish telecoms giant Turkcell was Sunday thrown out of a deal to build Iran’s second mobile telephone network in the latest twist to a rollercoaster business deal that has badly hit Iranian-Turkish relations.

The chairman of the board of Irancell, the consortium set up to run the three-billion dollar venture, accused Turkcell of “failing to deposit money and give the necessary guarantees” for the project to go ahead.

“Turkcell has failed to live up to its commitments,” said Ebrahim Mahmoudzadeh, also head of the electronic industries department in the Iranian defence ministry which holds 15 percent in the project.

After a stormy board meeting that saw Turkcell sent packing, he told state television that Irancell’s remaining and Iranian-only members were now in negotiations with South Africa’s Mobile Telephone Network (MTN).

But the spokesman for Turkcell in Iran, Bahram Hasanzadeh, called on the company’s Iranian partners to “not act hastily” and insisted “Turkcell has fulfilled all its obligations according to the Iranian laws.”

“It is not up to a a company that holds a minority stake to announce that Turkcell is no longer in the contract. Only the Iranian government can decide such a thing,” he told AFP.

The news comes just a week after it was announced that Turkcell and its Iranian partners had signed a final agreement and had brought an end to months of wrangling over the deal.

Turkcell was initially awarded the contract in February 2004 in a landmark deal to provide a mobile phone service to some 16 million users over the next 15 years, subject to the payment of a 300-million-euro licence fee.

Iran’s existing mobile network serves some six million users out of a population of 68 million.

But the agreement suffered a serious setback last year when Iran’s hardline-controlled parliament objected to giving a foreign firm a majority stake in the venture.

The Turkish firm’s stake was then cut from 70 to 49 percent, a move deputies said was necessary to protect Iran’s national security because otherwise the network could be subject to espionage or simply cut off by foreigners.

At one point Turkcell reportedly threatened to pull out altogether, and last month demanded more guarantees that its stake would be protected.

The problems surrounding the contract stalled the development of a badly needed second mobile network and also damaged relations with neighboring Turkey — already strained over a similar dispute concerning a contract to operate Tehran’s new airport.

The problems have also hit investor confidence in Iran, an already tightly protected market where foreign companies have found themselves under increasing scrutiny by regime hardliners.

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