The Director of Telecommunication Company of Iran (TCI) announced the merger of all of its provincial Telephone companies to the TCI, plus merging with MCI the biggest Iranian mobile carrier which is also a subsidiary of TCI.
A Brief Introduction and History
Telecommunication Company of Iran (Public Joint Stock) was established in 1971 with a capital of over five billion Rials. TCI holds 30 provincial affiliate companies and two brands as MCI (Hamrahe Avval or Mobile Company of Iran) and FCI (Ashenaye Avval or Fixed-line Company of Iran). TCI services include fixed-line telephone service, data services, mobile services, high-speed internet and soon wireless services. Holding two brands as FCI and MCI, TCI owns 99% of the fixed-line telephone subscribers and 61% of the mobile subscribers in Iran. Having 61 million mobile subscribers and 29.4 million fixed-line subscribers, TCI is the leading operator of the country in providing telecommunication services. MCI (as Hamrahe-Aval brand) is the first and the largest mobile operator in the country. MCI as one of the TCI affiliates, for the number of subscribers, ranks the first in the country, in the Middle East and in South Asia. Currently MCI ranks sixteenth among 1,003 operators in the world.
TCI at a Glance (May 2015):
- Fixed-line subscribers: 29.4 million
- Fixed-line penetration rate: 38 percent
- Mobile subscribers: 63 million
- Mobile penetration rate: 80.5 percent
- ADSL Ports (by TCI): 3.9 million
- Internet users: 41 million
- Telecom service connected villages: 53 thousand
- Rural ICT offices: 10 thousand
- Mobile communication covered roads: 72 thousand Kilometers
- Mobile communication covered villages: 45 thousand
Privatization of TCI
Following the 2007 ratification by Iran’s Cabinet of Ministers, TCI was subjected to privatization through selling its shares in Tehran Stock Exchange. On August 2008, 5% of TCI shares were offered with the base price of 1500 Rials in Tehran Stock Exchange. The 5% shares, worth of 344 billion Rials, were sold in just 8 minutes.
By the end of September 2009, Mobin Trust Consortium along with Tose’e Etemad Investment Company and Sina Bank won the tender for TCI (50% + one shares) for $7.8 billion. This company partially belongs to the Iranian Revolutionary Guard Corps (IRGC). The Government owns the remaining 40%, TCI employees 5% and 5% was sold in the Tehran Stock Exchange.
On December 2009, the largest transaction in the history of Iran stock exchange, 50% plus one share block of TCI, worth eighty thousand billion Rials was purchased by Tose’ Etemade Mobin Consortium.
With the merger of the 30 provincial affiliate companies of TCI, this company would go back to its original structure from 21 years ago. Organizing the structure, fixing the isolated decision makings and management and reducing the size of the affiliate companies are just a few of the benefits from this plan. Besides, with the new merger plan, affiliate companies can enjoy 25% reduction of their withholding taxes which is 300 million Rials (nearly $8.5M) in the next fiscal years. “The decision was approved by the Board of Telecommunication Company of Iran as well as Iranian Privatization Organization(IPO) and Securities and Exchange Organization(SEO) also agreed with this decision. It is predicted that downsizing and integration of Telecommunication Company of Iran could bring a positive impact on the company’s shares on the stock exchange in the long term,” said the spokesman of TCI.
The merger would start next year in the upcoming Persian year (1395) with the integration of 30 provincial affiliate companies and would end by 1396. In the years 1397 and 1398, MCI and TCI would integrate together as a single company and by the next two years until 1400 all of these companies would go under the single board of directors and a single brand called “Pishro Digital”. By the year 1400, Pishro Digital would issue a single bill for all of its services and it would have a centralized call center, activation center and sales center for all of the services they would provide. If this 5-year plan succeeds, MCI and TCI would have a powerful synergy to control the data and the fixed and wireless communications of the country.