Earlier this month, Turkcell said it had signed an agreement to purchase 49% of the Irancell consortium, which planned to invest US$ 2 billion to set up a second mobile network in Iran. Negotiations were hampered by disagreements over the payment of a license fee. Turkcell declined to pay its fees to Bank Melli in Tehran and instead got HSBC and Deutsche Bank to act as guarantors. Iran's telecommunications ministry and the local Irancell partners were not satisfied with this arrangement.

Irfan Unver, a Turkcell representative, said his company would attend a parliamentary commission on Sunday to defend its right to the 49% stake but could take the matter to court later if it failed to reach an agreement. Iran's telecommunications ministry confirmed that Irancell could negotiate to replace Turkcell with MTN without the need for a second government-run tender, as long as the deal was completed by November 21.

MTN is hoping to send in a team of financial and technical experts to try and work out an agreement in the next 20 days, the sources said. Talks will hinge on project financing, with most analysts and foreign investors extremely doubtful that the Iranian partners can afford to fund their part of the deal.

Turkcell was awarded a 70% stake last year, but Iran's parliament this year stripped the Turkish firm of this managing shareholding. The lawmakers said foreigners could not be allowed to control key infrastructure and accused Turkcell of links to Iran's foe, Israel.

Source: Reuters - WDR/Intelecon Regulatory News