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Mobile penetration surpasses 100% in Iran

Iran’s mobile penetration has exceeded 100%, according to Research & Markets. Although the fixed-line and internet sectors continue to record positive growth, they remain restricted by tight government regulation, censorship and underinvestment in network infrastructure.

All three sectors present significant growth opportunities but mobile sector will likely continue to outperform because of superior network investments and competition between the operators. Quarterly mobile growth averaged 3.7% in the 12 months to June 2012, while ARPU is unchanged this quarter despite growing market saturation that has the potential to increase downward pressure on mobile tariffs.

The fixed-line sector grew by 3.4% y-o-y during 2011, according to latest data from the ITU, bucking the trend of declining fixed-line subscriptions observed in many other markets.

Iran’s internet market is expected to benefit from the government-backed NDN. The first phase of the project is expected to be launched in September 2012, according to Minister of Information and Communications Technology Reza Taqipour. The second phase is expected to be ready for service by March 2013. Although the network will still be censored by the government, its quality and coverage is expected to attract a considerable number of internet users.

Iran has one of the highest populations in the region, which bodes well for the telecoms market. However, it is restricted by a weak ARPU, and the country’s political situation is another issue; there is a high degree of state control and regulation in all sectors of the telecoms market. In addition, cuts to subsidies on utilities and fuel, spiralling inflation and the more stringent sanctions imposed by the international community in late 2011 have reduced consumer spending and weakened the overall macroeconomic environment.

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