Wall Street Journal: Major French Company Negotiating Investment in 'Hamrah-e Aval'

The Wall Street Journal reports that the large French telecommunications company, Orange S.A., is in preliminary negotiations for investment in the Mobile Communications Company of Iran, known as 'Hamrah-e Aval'. According to the September 1 report from the Wall Street Journal, Orange is one of several European companies assessing the potential in Iran's mobile telecommunications market. A portion of Orange's shares is owned by the French government. If such a potential investment materializes, it would be the first time since the nuclear agreement between Tehran and six world powers that a major Western company attempts to purchase a significant stake in an Iranian domestic company. Previously, there had been reports about the possibility of French investment in 'Hamrah-e Aval' within Iran. Last winter, these early reports led to an increase in the stock index of 'Hamrah-e Aval'. In February 2016, Davood Zareian, the spokesperson for Iran Telecommunications Company, announced that the French company had expressed interest in investing in the telecommunications company and 'Hamrah-e Aval' during the sanctions period. The spokesperson did not directly refer to discussions between the two sides after the sanctions were lifted but mentioned that 'France has announced that it has grand plans for its presence in the Middle East, but the mechanism is currently unclear, and the discussion of purchasing shares in Iran Telecommunications Company or Hamrah-e Aval has not yet become completely serious.' According to the Wall Street Journal, despite all this, Orange S.A. needs to consider this issue as well; Iran Telecommunications Company, which 'Hamrah-e Aval' is a subsidiary of, is under the control of a group of companies linked to the Islamic Revolutionary Guard Corps. One of Orange's spokespersons told the Wall Street Journal, 'We are currently assessing the feasibility to clarify our understanding of what is possible in this complex environment, especially regarding some sanctions that are still in place against Iran.' Despite the lifting of nuclear sanctions, U.S. sanctions related to issues such as 'human rights violations' or 'state support for terrorism' are still in effect against certain Iranian companies and individuals. This issue remains a barrier for many American companies and also for banks and companies that have extensive financial dealings with the U.S. For example, in April 2012, the Obama administration imposed sanctions against security, intelligence, and telecommunications entities in Iran and Syria due to their role in human rights violations. Last year, a major Chinese company was accused of selling sanctioned equipment, including telecommunications control systems, to Iran, and the U.S. Department of Commerce imposed penalties for that. Estimates suggest that 'Hamrah-e Aval' has a value between $4 to $7 billion. No reports have yet emerged regarding an official proposal from Orange to purchase part of the shares of the Mobile Communications Company of Iran. According to the Wall Street Journal, the two sides must first sign a commercial memorandum.