May 22.2009 - Parmand Telecom - Iran said that it has stripped a consortium including UAE telecoms giant Etisalat of the licence to run its third national mobile telephone network.

The licence will now be awarded to a consortium including Kuwait's Zain which was runner up in the tendering process, Iran's official IRNA news agency said. Zain had teamed up with two state-run Iranian pension funds for its bid.

Iranian officials told AFP that the Etisalat consortium, which also involved Iran's Taameen Telecom, had not delivered on the pledges it made when it was awarded the licence in January.

"The Taameen Etisalat consortium has been stripped of the licence because it has not fulfilled its commitments," said telecommunications ministry official Mohammad Reza Farnaghi Zadeh.

The consortium, in which Etisalat has a 49-percent stake, had said that it had paid a 300-million-euro (400-million-dollar) fee for the licence.

But on Sunday Telecommunications Minister Mohammad Soleymani denied the payment had been made.

"The Taameen Etisalat consortium has gone out of the tendering process because it has neither given the necessary guarantees nor paid the licence fee in time," the ministry website quoted him as saying.

In the UAE, Etisalat said it was "weighing its options before responding officially" to the decision, adding in a statement that it still considers entering the Iranian market an "important and profitable investment."

Mobile phone services only started in Iran a little over a decade ago but already more that 45 million of the country's 71 million people have one.

Iran has two other national networks run by state-owned MCI (Telecommunication Company of Iran) and the private firm Irancell.

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