March 24 2004

Tehran - Mobile phone users in Iran have snapped up 5.6 million SIM computer chip cards in 20 days, the Iranian telecommunications ministry said on Sunday.
Post offices and banks have been swamped with customers for the US$530 cards that have a memory for data and applications, a processor and the ability to interact with the user, as well as carry the phone number.

The sales for the 20-day period ended March 10 totaled $2.93bn.

Prior to the end of the current Iranian year on March 20, the telecommunications authorities had planned to sell two million new SIMs (Subscriber Identity Module).

The sizzling sales figures, however, have forced them to scramble to meet demand.

Of the 5.6 million people registering for the new SIM cards, 2.1 million are in Tehran, the ministry said.

Even though the SIM cards on offer will not be released for a year - in early 2005 - and customers still have to pay for the telephone itself, existing mobile service lines bought on the open market cost more than double.

The mobile phone market here is big business.

Just three million mobile phone lines are currently in service. With the present rate for a SIM card currently hovering around the $1 200 mark, any new lines are highly sought after.

In addition, on average each customer appeared to be buying between 10 and 15 lines - a sign that the mobile phone market, like the car and property sector, has become a key form of investment.

According to press reports, one businessman even bought 5 000 lines.

But the new lines will be confronting a network already overloaded and in desperate need of investment - judging by the difficulties involved, even in the capital Tehran, of placing a call or finding a strong enough signal to do so.

The public demand has, however, put the Islamic republic under pressure to open up its state monopoly on telecommunications to private sector consortiums.

A second mobile network has recently been awarded to a group headed by Turkey's Turkcell and including Sweden's Ericsson and Finland's TeliaSonera. Their investment is expected to total $3.1bn over 15 years.

The Turkcell-led consortium is planning to sell substantially cheaper SIM cards - around $178 - but communications will be more expensive. They eventually hope to sell 16 million lines after 15 years.

Iranian authorities are setting their sights on reaching the 10 million-mark after five years.