MTN to invest $295m in Iranian broadband company
09 May 2017 | James Pearce
South African operator MTN has struck an agreement to plough more than $295 million into fixed broadband network Iranian Net.
In return for its initial $40 million investment, MTN will get an initial 49% stake in Iran Net, with a further $249 million earmarked as both equity and loans which will be used to help the Iranian company build a fibre network over the next five years.
The deal is at a preliminary, non-binding stage, the African operator said, but it will provide MTN with the opportunity to expand its presence in the growing Iranian market.
“The preliminary agreement remains subject to finalising suitable transaction agreements,” MTN said.
“Iranian Net has a national licence for the construction and operation of an optical data transmission network and fibre-optic access network across Iran,” it said.
“This investment, should it be completed, represents an opportunity to capitalise on the continued strong growth expected in the Iranian broadband market, with an initial focus on eight of the main cities.”
MTN already holds a 49% stake in mobile provider MTN Irancell, which launched 4G services in 2014. It was set up as a joint venture between MTN and Iran Electronics Industries, which holds the other 51% of shares, in 2006.
MTN also invested in e-commerce firm Iran Internet Group – which runs a car-sharing app called Snapp.ir - earlier this year through MTN Irancell.
The announcement comes just a year after the Iranian market opened up due to the lifting of sanctions imposed by the US and its allies. That has led to numerous deals in the developing market, including plans to roll out a nationwide fibre broadband network backed by the government.