Iranian Internet service provider HiWeb is considering a plan for acquiring a smaller ISP, Sabanet.
Reportedly, talks have been held between the two companies over the possible acquisition.
Sabanet, established in 2003, uses a Private Access Provider certificate. Later, it was upgraded to a Fixed Communications Provider company, Peivast reported.
This is not the first merger discussed by Iranian ISPs. As per an agreement signed in October 2017, HiWeb was to be merged with its rival Pars Online by taking over all of the latter's shares on Tehran Stock Exchange. The two companies was to operate under the HiWeb brand.
However, due to regulatory hurdles, HiWeb has not been able to legally acquire Pars Online yet.
Lack of financial details about the HiWeb-Pars Online deal prompted stock market regulators to suspend HiWeb’s trading ticker several times.
In a letter to the Securities and Exchange Organization, HiWeb explained that although the agreement was signed by the two parties, its fate depends on Communications Regulatory Authority’s approval and that the process could continue for months.
In the following months, regulatory questions about the agreement were seemingly addressed and HiWeb received CRA's approval for legally sealing the deal. However, the deal’s nature changed from being a merger into an acquisition.
Market Impact
With the introduction and growth of third- and fourth-generation mobile telecommunications technologies in recent years, ISPs have observed a noticeable decline in revenues as users are increasingly relying on mobile services to surf the net.
From what is known, none of the ISPs has the funds to compete with Iran’s largest fixed landline service provider, the state-backed Telecommunications Company of Iran, which has emerged as an unchallenged monopoly.
On several occasions, ICT Minister Mohammad Javad Azari Jahromi has said, “Mergers and acquisitions between local ISPs will enable private businesses to cut cost, raise funds and compete with TCI.”
HiWeb’s acquisition of other ISPs and its reported foray into the field of optic fiber services are certain to give Iran’s landline telecom sector a boost.
