MTN, Turkcell Fight Over Iranian License

Turkcell, Turkish mobile network, has resumed its stalled legal action against South Africa's MTN over the contentious issue of the Iranian mobile operator license.

Turkcell has filed a lawsuit this time with a South African court seeking $4.2 billion in damages after it claimed that MTN used bribery to have its Iranian mobile license revoked and sold to the South African firm.

At this stage, MTN said that it cannot comment further as they have not received or viewed the court papers.

MTN added though that it continues to believe that there is no legal merit to Turkcell's claim and will accordingly oppose it.

MTN, through one of its subsidiaries, owns a 49% shareholding in Irancell, which holds the second GSM licence in Iran. The remaining 51% of Irancell is owned and controlled by Iran Electronic Development Company (IEDC).

Turkcell and its subsidiary, East Asian Consortium (EAC) was originally awarded the license in 2003. Turkcell's near 70% stake was reduced to 49% by the Iranian government in 2005.

In June 2005, the Iranian government cancelled the Turkcell license and started talks with South Africa's MTN, with eventually resulted in the license being transferred.

Turkcell has since accused MTN of using bribery to get its license quashed so that MTN could take it instead. However, Turkcell lost an attempt to sue MTN in the USA earlier this year, which was expected to signal the end of the matter.

It is possibly coincidental that Turkcell's actions come just after the temporary relaxing of anti-nuclear sanctions against Iran, which saw MTN's shares jump in anticipation of greater growth for its Iranian mobile network.

MTN's Iranian subsidiary is also sitting on some $450 million in loan repayments and dividends that it hasn't been able to send back to South Africa due to the sanctions.