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Iran Telecommunications Report Q1 2012
Business Monitor International, Dec 2011, Pages: 85
Business Monitor International's Iran Telecommunications Report provides industry professionals and strategists, corporate analysts, telecommunication associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Iran's telecommunications industry.
BMI’s Q112 update on Iran’s telecommunications market contains new five-year growth forecasts for the development of the country’s mobile telephony, internet usage and fixed-line sectors. This quarter BMI extended its forecasts through to the end of 2016. Meanwhile, BMI has revised its mobile subscriber forecast, which now reflects a smaller market at the end of 2011.
Since BMI's last update, the country’s second-largest mobile operator, MTN Irancell, has published new operational data for the Q211 and Q311. MTN reported over 33.4mn mobile subscribers at the end of September 2011. This figure was up by 3.8% compared with the previous quarter and by 17.37% against the previous year.
BMI's new mobile subscriber forecast for Iran expects the mobile sector expanding by over 8% in 2012, with the mobile customer base forecast to grow to 80.85mn by the end of the year. Iran’s mobile market is expected to cross the 100% penetration threshold in early 2012. However, it should be remembered that the bulk of mobile subscriptions in Iran are made up of prepaid users. Many of these are understood to be inactive and this means actual penetration rates are almost certainly much lower than BMI's forecast suggests.
In addition to updating its mobile subscriber forecast, BMI has made some revisions to its forecast for mobile ARPU levels in Iran. Like BMI's other forecasts, this has been extended to the end of 2016. Expressed in the local currency, MTN had an average blended ARPU of IRR80,471 (US$8) for 2010.
This was up by 5.3% compared to the previous year. The growth of MTN’s ARPU, in local currency terms, occurred in spite of the promotions which the operator introduced in a bid to capture market share from mobile market leader MCI. This suggests ARPU growth was driven by other factors, including an increase in the general level of service usage and a trend towards the use of more lucrative data services. In 2011 BMI estimates that MTN’s average blended ARPU grew by 2.4% in local currency terms to IRR82,434. This is despite reports that MTN’s ARPU slipped to US$7.9 in Q311 and Q411.
BMI maintains its view that, over the next five years, ARPU levels in Iran’s mobile sector will come under increasing downward pressure. This trend will mainly reflect the intensification of competition in the market. In addition to new competition from Taliya, which continues to deploy a national network infrastructure, BMI is optimistic another mobile operator will enter Iran. One possibility is that a new operator will enter the market through the acquisition of regional operator MTCE.
Apart from extending BMI's forecast for Iran’s fixed-line telephony and internet sectors through to the end of 2016, BMI's forecasts for these markets remain unchanged. BMI's new fixed-line telephony depicts average annual growth of 1.9% in the five years to 2016. Although the annual growth rates are expected to fall in the latter years of its forecast, BMI expects there will be just under 30.5mn fixed lines in service by the end of 2016, with a penetration rate of nearly 39%. Meanwhile, BMI estimates Iran had just over 27.34mn internet users at the end of 2011, a penetration rate of almost 37%. Despite strong internet usage growth in recent years, there are signs a major slowdown in growth is under way. This could suggest that the limit of the country’s addressable market of potential internet users is already being reached.
Iran has risen from 14th to 13th position in BMI’s Business Environment Ratings for Middle East and North Africa (MENA). In addition to generating a stronger overall rating, Iran’s ascendency in BMI's table benefited from the lower score received by Libya. Although Iran continues to score below the regional average in all of the categories surveyed by BMI, its new Industry Rewards score is only just below the regional average. Many other countries in the MENA region receive a weaker score than Iran in the Industry Rewards category.
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