IRAN Mobile Market Review

IRAN Mobile Market Review

IRAN Mobile Market Review


A brief History

The new technologies have played a drastic role in the human life during the two recent decades and have highly changed our lifestyle. Mobile telephone is among the phenomena that has affected the human life of today.

In Iran Cell phone systemwas commenced for the first time in 1994 in Tehran by use of 176 transmitters and receiver (BTS) and with 9200 phone numbers. After some years and after the high demand for mobile phone,TCI (Telecommunications Company of Iran) was forced to extend the coverage. The Mobile Communication Affairs Division of TCI (in next years it named MCI) wasresponsible for network roll out. Considering high demand, the state telecommunication company has taken steps forward towards development of mobile the end of 2004, the numbers of subscribers of the first Iran’s mobile operators (mobile company of Iran/MCI subsidiary of TCI) grew up to 3,450,000 subscribers.

By 2005, Iran’s mobile market was a monopolistic with only one active national mobile operator (MCI). But then, second mobile network (MTN Irancell) was launched after an international tender.It was according to the implementation of the Third Economic, Social and Cultural National Development Plan. According to the Article 124 of that plan, Ministry of Communications and Information Technology (MCIT) held a tender for the second mobile operator in November 2003. This was done to promote foreign investment, encourage local private sector participation andenhance competition. After completing the tender formalities and reviewing the tenders, MCIT announced Irancell consortium as the winner of the tender for the second mobile operator on 16 February 2004.Irancell was granted the Mobile (GSM) Communications Network and Services License by MCIT on 27 November 2005. The said License was granted as on a national basis and includes the overall geographical coverage of Iran.

And then in 2007, third mobile license was awarded to RighTel which would launch 3G mobile services for the first time in Iran.RighTel is a subsidiary of the Social Security Investment Company (SSIC), the investment branch of the Social Security Organization (SSO), the largest non-government investment company in Iran.



Sector Trend and Key Statistics

Mobile sector in Iran is the biggest telecom sector in the country and has witnessed a fast growth in recent ten years. In the short-to-medium term there remains significant downside to our positive growth outlook. Optimistic political and economic conditionsafter nuclear deal will continue to affect all areas of the Iranian economy. This would driveoperator’sinvestments along with consumer’sdemands, especially for new services and data communications. e.g 4G/LTE networks.

Table 1. Cellular Mobile Phone index in Iran Market 1Q2016

(Source: Teyf Group Database)

Active Mobile Subscribers (Million)


Sold SIM cards(Million)


4G Subscribers(Million)


3G Subscribers(Million)


Active Mobile Penetration (%)


Mobile Population Coverage (%)



MCI: Keeping Dominant Position

Mobile Telecommunication Company of Iran, known as MCI was established in 1992 as mobile section of TCI. MCI name (brand) is Hamrah-e Aval (Meaning the First Operator) in domestic market. Although MTN-Irancel entered to market in 2004 but still MCI has the dominant position with 57 percent market according to subscribers. Iran’s first mobile operator (MCI) released recently its performance report in the past year (2015). MCI is currently ranked number one in Iran, the Middle East and South Asia in terms of the number of users. The operator also stands in the 15th place globally in terms of the number of users.

MCI now has over 23 million postpaid and over 20 million prepaid subscribers (active SIMs). In 2010, 5.5% of the MCI shares were offered on the Iranian over-the-counter market (Fara-bourse). Now 90% of MCI's shares belong to TCI holding and 10% of shares are public at Fara-bourse. In 2015, MCI launched 3G and 4G services by a new brand name as Notrino.

Currently, 6910 cell sites of MCI provide 3G, and 307 cell sites provide 4G services in 470 cities of the country. The largest operator in Iran also saw 3.7 x increases in its internet data in the period of Mar 2015-Mar 2016 usage compared to last year.

·         43 Million Active subscribers: in the last Persian year (ending march 2016) MCI gained 7 million users which 560,000 of them were postpaid and 6,480,000 were prepaid. This brings the total number of MCI’s subs (Sold SIM) to 77.9 million and active Subs reach to around 43 million.

·         MCI’s market share and penetration rate: MCI has 80.2 percent penetration rate in Iran and owns 59 percent of the SIM cards sold in the country.

·         96.5 percent coverage of the country’s population: MCI claims to have 100 percent 2G coverage in urban areas including residential islands. MCI also has 86.9 percent rural coverage in the country. Totally 96.5 percent of the country’s population is under the coverage of MCI including 1242 cities of the country.

·         International roaming: MCI’s postpaid subscribers are able to have international roaming with 270 operators in 112 countries and destinations around the globe.

·         Annual Revenue: according to latest financial balance sheet (March 2015 to March 2016), MCI annual revenues and operational profit are 2.608 b$ and 735 m$ respectively.

MTN-Irancell:a Persistent Competitor

MTN-Irancell is the second largest mobile phone network operator in Iran. It is 49% owned by the South Africa-based MTN Group and 51% belong to Iran Electronic Development Company (IEDC).

Irancell got the national Mobile (GSM) Communications Network and Services License by CRA on 27 November 2005. Within one year after being granted the license, Irancell rolled-out and started test launch of its network and officially launched it in October 2006 in Tehran, Tabriz and Mashhad. During 10 years MTN-Irancell has been the main competitor of MCI by breaking monopoly position and getting near 40% of the market regarding to his amazing business model and service packages especially for medium and low-income users.

In August 2014, MTN Irancell officially got the license for 3G and 4G services from Iran's Communications Regulatory Authority (CRA) and on December, launched Iran's first 4G/LTE network in nine cities.

Before 3G/4G, MTN-Irancell also had entered to Data communication market by providing WiMAX Licenses in six biggest provinces of the country in 2008. Now, the number of Irancell’s WiMAX subscribers estimated around 500,000 subs.

Latest statistics show that Irancell has a penetration rate of 38.1 percent in mobile market.Iran’s second largest mobile operator, also covering 32,158 kilometers of main roads andthe population coverage index shows that Irancell is covering 85.7 percent of the country’s population. Also Irancell network covers 1196 cities and 1171 villages.

MTN Irancell Key Statistics

Population coverage (%)


Active SIM cards(Millions)


3G/4G Subs (Millions)


Penetration rate (%)


International roaming

418 operators in 163 countries


RighTel; Lost opportunities for growth

RighTel is the third mobile operator and first 3G provider in Iran. Rightel Established by the Social Security Organization’s body of investing in 2007 and got mobile licenses in 2008. The license was nationwide and permit to the holder to offer 3G services for first time in the country with 2 years exclusive right for 3G expansion to protect the growth of business. Finally Rightel launchedmobile broadband services in 2012by covered all province centers and large cities. In 2015, RighTel launched 4G LTEtechnologies after MTN-Irancell.

The launch of 3G operator Rightel in 2011 has the potential to bring dedicated mobile broadband options to a wider number of Iranians and catalyze a dynamic of competition that should incentivize the incumbent to improve quality of service. However, Rightel's network is only covering a handful of cities and the company has given little indication of its plans regarding dedicated mobile broadband options.Now the operator is facing challenges to keep up with MCI and Irancell for its coverage expansion.

Key statistics of Rightel

Population coverage (%)


Active 3G SIM cards(Million)


Penetration rate (%)



National Roaming for Mobile operators

Iranian Communication Regulatory Authority (CRA) approved key principles of national roaming came into effect in June 2014. Based on these principles, when subscribers of each three mobile operators (MCI, Irancell and Rightel) exit from their provider’s coverage area, must automatically connect to host operator network and can use its services. This is mainly welcomed by Rightel which has just good coverage in main cities and need huge investment and time to cover all cities and rural areas in the country.

Also because of limitations in metropolitan areas and conflict between municipalities and Telecom Operators on sharing of mobile sites, a company called Ertebat Moshtarak Shahr Co. was established in as a joint-venture of Tehran Municipality and mobile operators in October 2006. This company is responsible to coordinate the operators’ usages of common sites and spaces in order to install and manage BTSs sites.  Based on the approved regulations, it is clear for operators how to interact with each other and how much is their right and responsibility for each BTS.

Boom of Mobile Broadband Growth

The outlook for Iran's 3G/4G market offers upside potential to growth, Although RighTel's limited network coverage and services portfolio has weighed on its ability to take advantage of a three-year exclusivity period in Iran's 3G market but fast expansion of 3G/4G networks by Irancell and MCI after obtaining the license, catalyzed take-up of advanced mobile data services and shows a huge potential for this sector.

MCI claims to have the most extensive coverage of 3G service in Iran with over 6987 cell sites in 469 cities around the country, excluding the rural areas. Although MCI has a better coverage around the country, Irancell and Rightel the other two major mobile operators in the country, are known for better services, including faster and more stable internet connection.

Before launching 3G/4G by Irancell and MCI there were around 1.6mn 3G subscriptions at the end of 2013.According to CRA, in September 2014 there were 7.08 million 3G/4G Subs. This grew to 14.1 million in the end of Sep 2015 which shows a boom in mobile broadband connections in the country.

Future of Mobile market andopportunities

Iran offers a relatively young population, where the majority is aged below thirty years old and enthusiastic adopters of mobile technologies and ICT tools. Mobile phone penetration stands at around 95% and this has grown quickly in recent years due to increased competition and the introduction of 3G and 4G services. It is hoped that the flourishing start-up sector in Iran will receive a boost due to increased foreign interest and investment.

The mobile segment is set to continue on its strong growth trajectory due to the increased accessibility of 3G and 4G services. The wireline segment will however continue to struggle because of the growing preference for mobile solutions.

Since the launch of 3G and 4G data services, the Iranian mobile market has experienced strong growth y-o-y and is expected to reach 116.7mn subscribers in 2018, According to BMI.




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