Iran's large population should make it one of the most attractive telecoms markets in the Middle East. However, political and economic challenges remain and currency fluctuations limit access to the latest devices, limiting the market's growth. Added to which, the Iranian government is keen to restrict access to international internet content, creating a national internet network that will bypass international gateways and cut off large swathes of global content. For this, the government began talks with the Chinese government in early 2014. These factors offer considerable downside to the Iranian market and slow the expected growth of the market's sectors.
- Fixed-line connections slowed significantly in 2013, rising less than 2%. While we expect growth to continue, there are many factors that could see the market begin to decline in line with most emerging markets.
- Mobile subscriptions declined slightly in Q313 as MTN reported a sharp loss in connections. While this makes little overall impact on our forecasts for the market, it does highlight the high proportion of prepaid subscriptions in the market.
- We retained our forecast for around 3.8mn 3G subscriptions at the end of 2013 and we expect the rapid growth to continue. However, additional competition in the market would have a greater impact on growth.
Key Trends And Developments
Iran and China will partner to control content online and build a 'clean' internet in Iran, according to news in January 2014. The restrictions will apply to the National Information Network (NIN). The news had little impact on our forecasts for broadband subscriptions as the NIN is already factored into the estimates for market expansion. BMI notes that China's restricted internet access and blocking of content deemed unsuitable has not stopped consumers in that country getting online and developing a number of homegrown social networking services and platforms. Although we do not expect Iran to follow this path as its population is much smaller.
Iran's first IPTV project, launched by the ministry of ICT, in collaboration with national broadcasting and telecoms firms, was launched in December 2013. The plan aims to reach 140,000 households in six provinces and attract over 7mn subscribers over the duration of the project. Phase one saw infrastructure rolled out in Tehran, Isfahan, Khorasan Razavi, East Azarbaijan, Yazd and Qazvin.