Iran Gov’t Leasing Dark Fiber to Private Telecom Operators

EghtesadOnline: The Iranian government is moving ahead with a motion to lease state-owned dark fiber to the private sector to expand the national communications network.

News ID: ۷۴۷۲۸۱

08 May 2019

As per the directive published on Communications Regulatory Authority of Iran’s website Cra.ir, all licensed telecom operators can file a leasing request with the state-owned Telecommunications Infrastructure Company that owns the country’s fiber-optic network.

Dark fiber or unlit fiber refers to unused fiber-optic cable. Often companies lay more lines than what is needed to curb the costs of having to do it again in the future. The dark strands are normally leased to other companies who want to establish independent optical connections.

By leasing dark fiber to the private sector, the government will enable Internet service providers to expand operations and boost connectivity in Iran, according to Financial Tribune.

The directive explicitly states that dark fiber cannot be sold off or leased by the private operator and TIC will remain the sole owner of the infrastructure. TIC is permitted to rent out 50% of the dark fiber it owns.

Depending on the length of the dark fiber, rental costs can vary between 10,000 to 20,000 rials per meter per month (6 to 12 cents).

Rules and Conditions

Deals between TIC and communication operators should be approved by the Iranian telecom authority, which will also monitor the quality of the dark fiber which is to be leased.

According to the directive, each deal should include a service-level agreement (SLA) that should also be validated by CRA.

An SLA between a service provider and a client clarifies their commitment toward different aspects of the service—quality, availability and responsibilities.

The directive also includes a clause that grants an indefeasible right of use (IRU) to TIC in its contracts with private firms. IRU is a permanent contractual agreement that cannot be undone by a customer of that system.

The word "indefeasible" means "not capable of being annulled, or voided, or undone".

Based on such agreements, a customer can purchase the right to use a certain capacity of a communication system for a specified number of years. IRU contracts are almost always long term, commonly lasting 20 to 30 years.

Normally these contracts obligate the purchaser to pay a portion of operating costs and the costs of maintaining the cable, including any expenditure incurred for repairing the cable after a mishap.

Statistical Overview

Iran’s first intercity fiber optic cable was laid between Tehran and Karaj in 1990. The cable was 54 kilometers long.

According to the latest data, 195,260 km of fiber optic cable have been laid in Iran.

The country’s total population is estimated to be 82.4 million, nearly 70% of whom live in urban areas. With 72.94 million users, Iran has an Internet penetration rate of 89%.

The number of Iranian Internet users shot up by 29% in 2018. In other words, 16 million people got connected to the web for the first time last year.

An estimated 123.7 million SIM cards have been sold in the country. The number of active mobile SIMs registers an annual increase of 3 million (2.4%).

Average mobile Internet speed was 30.58 megabits per second in 2018, 75% higher than a year earlier, while average fixed Internet speed was 12.82 Mbps, indicating a 36% rise.

Close to 74% of mobile subscribers use prepaid services and 26% are post-paid. Over 59% of the mobile SIMs support broadband Internet (3G and/or 4G).