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Last Updated: Thursday, 20 October 2005, 12:25 GMT 13:25 UK
MTN 'in Iran mobile network deal'
Iranian woman talking on a telephone
Iran needs another mobile network
South Africa's MTN phone company says it is to take a 49% stake in the new Irancell mobile network in Iran.

MTN has also given a 300m euro ($358.4m ; 203m) payment guarantee towards a GSM licence, it said.

The firm said the opportunity to run Iran's second mobile licence matched its hopes of becoming the leading service provider for emerging markets.

In 2004 Turkish firm Turkcell won a deal to be Irancell's partner, and is now taking Tehran authorities to court.

Iran's telecommunications ministry said on Thursday that no final announcement on MTN could be made until a court rules on a Turkcell's complaint.

One network

MTN, Africa's biggest mobile phone network operator by customers, said the Middle East is a natural development onwards from its existing strong presence in Africa.

"It (the Irancell deal) has been on and off but the market believes it may add value in the future," said one analyst in Johannesburg.

Iran currently has only one heavily congested mobile network, with long waiting lists for new subscribers.

The contract to act as foreign operator in the Irancell consortium was originally won by Turkey's Turkcell a year ago, beating MTN in the process.

Iran's telecommunications ministry and the domestic Irancell partners then got into a dispute with Turkcell over payment of a licence fee and re-started talks with MTN.

Court case

Earlier this year the Turkcell deal was put in further doubt after criticism from Tehran of alleged business links between Turkey and Israel.

An Iranian parliamentary commission ruled that Turkcell's proposed 70% controlling stake was too high, and that Turkcell was a security risk because of alleged business ties with Israel.

Turkcell began court action on 16 October to try and win back its original Irancell stake.

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