MCI Shareholders Dismiss Mega Merger

EghtesadOnline: Major shareholders in Iran’s oldest mobile phone firm, Mobile Telecommunications Company of Iran (MCI) seem adamant in their strong opposition to a proposed merger between the company and Telecommunications Company of Iran (TCI).

News ID: ۷۷۸۲۸۶

12 August 2017

According to local technology website ICTNA, the Mobin Trust Consortium which has a 50% share in MCI has so far forestalled the merger and is not willing to give ground to the proponents.

On several occasions the consortium has simply dismissed TCI as unprofitable and highlighted its mountain of debt as its paramount reason for opposing the merger.

However, so far TCI officials have ignored the issue and prefer to trumpet the “upcoming merger”. At a session of the TCI’s annual general assembly last September, the company’s CEO said the two telecom giants “will be merged.”

According to Financial Tribune, Rasoul Saraian said that surveys show customers prefer telecom services in an integrated package from one company and the two companies are aiming to meet this demand through the merger.

“The merger will commence in five years and the services will be upgraded through joint use of fiber broadband and mobile technologies,” he said.

With the intention to cut operating costs, the provincial branches of TCI were merged last September.

Kamal Bigdeli, financial manager of TCI, told reporters that by merging the provincial branches, recuing staff and reforming the company’s financial structure, TCI aims to save $10 million.

Talks about the deal between TCI and MCI follows a wider shift in the international telecoms markets of fixed-line operators buying or merging with wireless networks.

One high-profile merger of this sort was in the UK between British Telecom (BT) and EE (formally Orange and T-Mobile), which is estimated to have cost the national operator over $13 billion for establishing the largest mobile network.