Iran has pulled its third mobile licence from Kuwait's Mobile Telecommunications Co (Zain) and will hold a fresh tender, a report said.

The Poul daily quoted Telecommunication Minister Mohammad Soleimani as saying Zain had not 'fulfilled its obligations.'    

Iran handed Zain the licence in May after stripping it from Emirates Telecommunications Corp (Etisalat).

Iran said at the time Etisalat and Iran's Tamin Telecom, which won the tender in January, had not fulfilled 'the necessary collateral and payments of the licence fee at the appropriate time.'    

Etisalat, one of the largest Arab telecommunications companies by market value, had said it expected to invest up to $5 billion over five years in its Iran operations.

Zain, whose biggest shareholder is the country's sovereign wealth fund, has spent billions of dollars in an aggressive overseas expansion effort as competition heats up at home, where an affiliate of Saudi Telecom has started operations.

Iran has a mobile penetration rate of less than 60 percent, in a market where about half of its 70 million population is under 25 years of age.

The current telecom operators in Iran are the state-owned Iran Telecommunication Company (TCI) and Irancell, which is 49 percent owned by MTN Group, sub-Saharan Africa's biggest mobile phone company.

Iran's nuclear row with the West has deterred many foreign companies from doing business in the country.

US sanctions bar US companies from operating in Iran and United Nations sanctions have made other firms wary of investing.

However, analysts say the size of the market and its energy riches still make it an attractive prospect. - Reuters