MTN, the South African telecommunication company has finally reached to an agreement with Iranian Net and is planned to invest $295 million in this fixed-line broadband network company.

Iranian Net (also known as the fourth operator) was established in 2011 in order to provide fiber optic infrastructure and value-added services around the country. After receiving an exclusivity license from the Ministry of Communications, Iranian Net was obligated to deliver a total of 6.870 million fiber optic ports in an 8 year period, but failed to meet its milestones after many attempts. The major issue for Iranian Net was finding enough capital, and the major concern for the potential investors were the late return of the investment.

After struggling for years to find a suitable investor, Iranian Net finally reached an agreement with MTN, the South African telecommunication company. MTN has agreed to invest over $295 million in return for 49% of Iranian Net’s stake. This is the second investment of MTN in Iran in 2017. Previously the company announced that it will be investing $22 million in Iran Internet Group, the parent company behind tech companies such as Snapp and ZoodFood. During the years of financial sanctions imposed on Iran, MTN was not able to move its assets outside of the country. After the JCPOA agreement, MTN repatriated $1 billion of its dividends from its stake in Irancell, the second mobile operator in Iran.

Reuters reported that MTN is expected to pay 540 million rand ($40 million) for a 49% stake in Iranian Net. Over the next five years, this South African telecommunication company will invest an additional 3.4 billion rand in both equity and loans to Iranian Net.

“This investment, should it be completed, represents an opportunity to capitalise on the continued strong growth expected in the Iranian broadband market, with an initial focus on eight of the main cities,” MTN said in a statement as Reuters reported.

MTN and Iranian Net will be cooperating with each other in order to bring fiber optic network to Tehran, Karaj, Qom, Tabriz, Shiraz, Isfahan, Ahvaz and Mashhad. Extending fiber optic to 31 provincial capitals of Iran would be justified in terms of profitability according to Bagheri, CEO of Iranian Net. Mahmoud Vaezi, Iran’s Minister of Communications also stated that this project has been kicked off in the cities of Tehran and Karaj, and its process will increase with the help of its foreign investor; while domestic investors are expected to get involved in this projects for the other cities in the country.

Related: Iran Launched Its First Phase of Fiber Optic Internet for Households

Irancell Still Not Ready to Go Public

Telecommunication Company of Iran has already launched FTTH (Fiber To The Home) platform in 8 cities of Iran. For now we have to wait and see how this investment could actually roll the wheels of Iranian Net and the fiber optic project in the country.

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