The Iranian ICT sector, a keystone of the country’s non-prime economic expansion, is set for exponential growth thanks to its unique combination of demographic and economic variables.

A major engine of this growth is undoubtedly Iran’s population, which is large, young, and quick to pick up new technologies. Of Iran’s 73 million citizens, 70% are under 30 and 80% are literate.

 A consistently increasing level of disposable income is creating a consumer class, while new players and technologies are helping to build sophistication and demand among them. It is estimated that consumer expenditure on telecoms equipment will reach $500 million and expenditure on services will hit $6 billion by 2014.
In the context of low penetration in strategic ICT areas, this formula portends the exponential growth.

Iran’s mobile phone penetration is 129%, representing the fact that many Iranians have more than one phone or subscriber identity module (SIM); however, the number of smart phones on the market remains relatively low. There are an astounding 23 million internet users in Iran, but only 2 million have access to broadband.

Iran is by far the biggest market in the Middle East for mobile phone subscriptions, with 90 million by end-2012. In terms of revenue, it is the fourth most lucrative market, in the region of $9.2 billion. Its estimated growth rate of 6%- 7% per annum puts it among the top-five countries in the world.

According to the Electronic Journal on Information Systems in Developing Countries (EJISDC), the sector employs 150,000 people and accounts for 1.3% of GDP.
Rural expansion has been a key element in the government’s growth strategy, and the country was recently awarded the UNESCO special certificate for developing telecommunication services in rural areas. The current administration is targeting to provide computers and internet to every school in the country.

 Iran’s mobile telephone segment is the centerpiece of its ICT sector. The current level of 90 million subscribers is up sharply from 68 million at the end of 2011 and 35 million in early 2008. The vast majority of subscriptions are in the form of pre-paid users.
The data segment is now seen as the key driver of the industry, as players vie for various 3G technology rights.

Data’s share of the total revenue is expected to double over the next five years reaching $4.5 billion by 2014. By the end of 2009, Iran’s mobile telecoms market was the fourth-largest market in the region at $9.2 billion and it is expected to grow to $12.9 billion by 2014 at a compound annual growth rate (CAGR) of 6.9%.

 
 MOBILE AND INTERNET

There is substantially more competition in the internet arena, where 11 private access providers (PAPs) and TCI vie for market share, offering ADSL2+, WiMAX, and other fixed wireless broadband services.

Iran currently has only 2 million high-speed internet users, compared to 7 million in similarly sized Turkey to the North West.
The government’s fifth Five-Year Development Plan (FYDP) calls for the establishment of a fiber-based national broadband network by 2016.

Recognizing the role of multilateral broadband development in the nation’s economy, the Iranian government has also awarded significant WiMAX tenders to private players in recent years.

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Published: 25 December 2015