Major products and services
Some of the major opportunity areas for Australian companies within the Iranian ICT sector are:
- Technologies for Government
- Banking and Finance
- Intelligent Transport Systems (ITS)
- Telecom and Wireless
- Business Solutions
Characteristics and trends
In 2002, Iran introduced its ICT Agenda (NICTA, which is also referred to as TAKFA, by its initials in Farsi) with the aim to erect and invest in further developing the necessary infrastructure, and establish the right legal and business environment for rapid growth within the ICT sector in Iran.
NICTA required all government bodies and state organisations to employ IT effectively in their day-to-day operations. Subsequently, the name of Ministry of Post, Telegraph and Telephone was also changed to the Ministry of ICT to suit its envisaged role of pioneering the implementation of modern technology in this sector.
NICTA in the beginning was able to stimulate some movements in this sector and initiated some major projects, however, after the presidency election of 2003, NICTA in practice fell apart, and overall failed to change the ICT landscape of Iran significantly.
Because of the non-existence of copyright laws, utilising pirate software of widely-used desktop/Windows applications is commonplace in Iran. This is also the case for more specialised software applications if they are popular enough. However, since the cracked versions usually are not fully functional, there is still a tendency to buy the original software if there is a local company that properly supports the training and the after sales service/updates to higher versions.
Iran has numerous private companies involved in developing original software or Persian-language versions of popular applications. The advent of NICTA, initiating lots of demands for tailor-made applications specifically developed for Persian speaking users, contributed to the growth of this sector for a short period of time. However, now with the decline in the demand for such applications, and enjoying a relatively cheap skilful IT workforce, most of Iranian software developers are pursuing business overseas, and some have had success during recent years.
The immediate opportunities in this sub-sector are currently as follows:
- Software solutions and/or consultancy service related to core banking, specifically those that have factored in the Islamic Banking requirements.
- ERP, CRM and similar business solutions that are suitable for SMEs, can be implemented/customised reasonably easy, and have a clear selling point differentiating them from other local or international competition.
Iran is manufacturing some computer components under license from international companies, predominantly in the area of monitors. Currently eight Iranian companies are manufacturing monitors under licence of LG, Samsung, Hyundai, Benq, Tatung and CTX.
Motherboard, keyboard, mouse, computer case, power supply, CPU, hard drive and recently printers are other components that are now manufactured locally.
Brand names, including American ones, are also available in the market. American brands dominate the market particularly for notebooks and network hardware. This is in spite of sanctions applying to most US exports to Iran.
The young demographic, and increasing application of computers in both government and private sector, is expected to continue to drive the increase in both the import and the local production of hardware in the coming years.
The immediate opportunities in this sub-sector are:
- EFTPOS terminals and ATMs
- RFID equipment, security solutions, CCTVs, etc for both government and the private sector
- ITS equipments/solutions
Iran currently has 1223 Internet Service Providers (ISPs) all private sector operated. By the regulations of Iran, these ISPs should rely on the Telecommunications Company of Iran (TCI) for their bandwidth. Previously serviced by TCI’s Public Switch Telephone Network, the ISPs have recently been provided with modern data line capacity through a national IP-based network. With the completion of this new network, the rather poor quality of current Internet services in Iran is expected to improve dramatically.
Iran is also one of the few countries in the Middle East, in which development of voice over IP (VOIP) is permissible, whilst government regulated by the private sector.
In 2005, the government obliged the Central Bank of Iran and the Iranian banks, mostly state owned, to set up all the necessary infrastructures (regulatory, hardware, software) for fully launching e-money in Iran by March 2005. While this plan has not yet fully materialised, local debit/credit cards are now commonplace and have removed the main obstacle to the growth of e-commerce (in the national scale) as well as the full roll out of e-government initiatives.
Telecommunication Company of Iran (TCI) is the national telecommunications carrier. TCI is currently 100% owned by the government and has a monopoly in the market for providing the public with telephone and data lines. Mobile phones, based on GSM standard, are operated by two (private sector) companies, Talia and Irancell.
TCI has started its privatisation plans, and it is expected that most of its subsidiary companies would be listed on the Tehran stock exchange within the next two years.
Iran’s IP-based 'national data network' is being developed by Information Technology Company (ITC), which is also a TCI subsidiary. This network currently covers 210 Iranian cities and has 60,000 high-speed ports to meet the needs of its end users such as business and ISPs.
Iran currently has more than 22 million fixed lines and over 15 million mobile phone subscribers with a penetration rate of 32.57 per cent and 22.2 per cent respectively. The number of Internet users is estimated to be around 12.5 million.
(Source: TCI Annual Report 2007)
Some of the major opportunity areas for Australian companies within Iran ICT sector are:
- Technologies for government
- Banking and finance
- Intelligent Transport Systems (ITS)
- Telecom and wireless
- Business solutions