Iranian Supreme Leader Ayatollah Ali Khamenei (C) surrounded by military commanders while visiting the Aerospace Force Exhibition of the Islamic Revolutionary Guard Corps (IRGC) in Tehran. (AFP)

By Saeed Ghasseminejad

May 6, 2019

Spreading disinformation is one of the tools that the Islamic Revolutionary Guard Corps (IRGC) has used to eliminate rivals since it first entered Iran’s economic arena. Disinformation campaigns are comprised of the knowing, purposeful publication of false and imprecise news meant to mislead public opinion and decision-makers. One example of such operations is the campaign of deception that accompanied the Guard’s purchase of the Telecommunications Company of Iran (TCI), the country’s largest telecom company. The IRGC subsequently used TCI to amplify its disinformation campaigns in the economic and political arena and weaken its competitors and opponents.

On September 27, 2009, a consortium called E’temad Mobin Development – consisting of the IRGC and the Execution of the Imam Khomeini’s Order (EIKO), a foundation controlled by Iran’s supreme leader, Ayatollah Ali Khamenei – bought 50 percent of the TCI’s shares. The purchase came only a few months after the disputed election of President Mahmoud Ahmadinejad, which led to massive protests in Iran’s streets – and a brutal IRGC campaign to suppress them by force and wring forced confessions from imprisoned demonstrators. In order to win the company for the lowest price, the IRGC launched a disinformation campaign against the Pishgaman Kavir Yazd consortium – the only one in the running not affiliated with the Guard – and later blocked it from bidding. The IRGC was thus able to take control over a major part of Iran’s telecom industry.

Iran’s Telecommunications Industry

Established in 1971, the TCI operated for years as a monopoly. Telephone communication, which private companies had introduced in Iran during the Qajar period, were taken into government hands during the Pahlavi period. In 1931 and 1932, the Ministry of Post and Telegraph bought shares in the company, and in 1953 it was nationalized. In 1971, the Telecommunication Company of Iran was founded and remained a state-owned company beyond the 1979 Islamic Revolution.

In 2005, Khamenei issued an order privatizing infrastructure held by the executive branch, including postal and telecoms corporations. Carrying out Khamenei’s order in 2006, the Ahmadinjehad administration added the TCI to the list of firms to be sold on the Tehran Stock Exchange. In the first round of privatization in 2008, five percent of the company’s stocks were transferred. Later, in 2009, 50 percent of TCI stocks were sold to the E’temad Mobin consortium.

The TCI enjoys a permanent monopoly over telephone lines and, at the time of its transfer, had a wide edge over its competitors in Iran’s mobile networks. Iran Cell, Hamrah-e Aval’s chief competitor, began selling mobile lines in 2007, and by 2009 did not have a large stake in Iran’s market. In recent years, Hamrah-e Aval’s share of the mobile phone market has risen to 57 percent, while the share of Iran Cell – controlled by military forces and companies linked to Khamenei – stands at 40 percent. The TCI also controls Iran’s home internet infrastructure.

The IRGC’s Acquisition of TCI

According to an investigation by the Iranian parliament, three companies had competed to acquire the TCI: the Pisghaman Kavir Yazd consortium, the E’temad Mobin consortium, and the Mehr Eqtesad Iranian consortium. The parliament report emphasizes that E’tmad Mobin and Mehr Eqtesad Iranian were not competing with each other, as they owned companies in common. In fact, the E’temad Mobin consortium represented the Guard and Khamenei’s economic empire, while the Mehr Eqtesad Iranian consortium belonged to the Basij. Issa Reza’i, managing director of Mehr Eqtesad Iranian, stated at the time that Sa’Iran, Iran Industrial Development Investment, and Gostaresh Informatic Iran were all a part of the consortium.

The E’temad Mobin consortium is made up of companies tied not only to the IRGC, but also to foundations in Khamenei’s economic empire. Sina Bank, for example, is tied to the Mostazafan Foundation, while Gostaresh Electronic is tied to EIKO. Sina Bank was not a part of the original consortium, but its later addition  demonstrates that, even afterwards, the consortium was not willing to make way for companies outside the control of the Guards and Khamenei. Shahryar Mahestan and Pars E’temad Group, two other major firms linked to the IRGC, are also E’temad Mobin shareholders.

The E’temad Mobin consortium was ultimately able to force Pishgaman Kavir Yazd out of the running by exerting pressure on regulatory authorities. At the time of the acquisition of TCI by the IRGC, Masoud Mehrdadi, the IRGC’s economic mastermind, was the head of the Board of Directors of Shahryar Mahestan as a representative of Shahabsang Mining Company. In this capacity, Mehrdadi was board member at countless IRGC-owned firms, including the Basij Cooperative Foundation, Ma’edeh Foods, Isar Support, Naserin Vahid, the Bahman Group, Pahne Tehran Mine Development, Razmande Residential Construction Complex, Saberin Development Horizon, Pardis Sabz Melal, Ansar al-Mujahedin Savings and Loan, E’tebar Iran Investment, Saman Majd Investment, E’temad Mobin Development, Nagin Khatem Iranian Investment, Gonjineh Shayestegan Investment, E’temad Development Investment, and Nagin Gonjineh Iranian. However, after internal IRGC conflicts allegedly related to corruption, Mehrdadi was sidelined.

Another widely known figure affiliated with the IRGC is Mohammad Reza Modares Khiabani. Khiabani is a figure involved with the Guard’s economic empire whose name crops up on the Boards of Directors of many of their companies.

The Pisghaman Kavir Yazd consortium was comprised of 12 cooperatives and three investment firms. Founded in 1996/1997 by retired telecoms professionals as a cooperative focused on the communications technology industry, it went on to expand its core of shareholders significantly. Pisghaman Kavir Yazd was also a contractor for the TCI and in 2008 won a bid for designing and implementing VOIP lines in Iran. Pisghaman’s prior work in the most sensitive parts of the telecoms sector, especially in conjunction with the TCI, confirms that it enjoyed the approval of security bodies.

Pishgaman Kavir Yazd was nonetheless disqualified by the privatization organization on security pretexts after bidding, leaving the IRGC as the sole buyer. Emphasizing the consortium’s history, a parliamentary investigation called attention to this unexpected development. Parliament’s report stated that although Pishgaman’s qualifications were originally certified, the opinion of a supervisory organ, which it does not name,  led to its disqualification after a second look. The Privatization Organization emphasized that it had certified Pishgaman’s technical and financial qualifications, and that an external security body had been the one to turn it down on security grounds.

“The administrative block’s auction,” Parliament concluded, “was conducted with a superficial adherence to regulations and entirely non-competitively for the purpose of transferring shares to a particular collection [of entities] under the management of public institutions.” In accordance with standard procedure, one of the institutions that was to certify Pisghmanan’s security qualifications was the Revolutionary Guard Intelligence Organization. In other words, by reporting lies about its competitor in the economic space, the IRGC managed to disqualify it.

The IRGC in Telecommunications

The IRGC’s takeover of Iran’s communications infrastructure gave it free reign over the industry. The forcing of high-cost, low-quality service on customers has been one price Iranians have had to pay for the concentration of the communications industry in IRGC hands. The slogan of the mobile communications company, “With Hamrah-e Aval, You’re Never Alone,” underscores a bitter truth: Through its control of telephone, mobile, and internet infrastructure, the IRGC’s eyes and ears have not left Iranians alone. In recent years, a great many civil society and political activists have reported that their correspondence and contacts have been surveilled by security forces, the Ministry of Intelligence, and the Revolutionary Guard Intelligence Organization.

Likewise, making use of the new tools at their disposal following the acquisition of the TCI, the IRGC amplified its disinformation campaign by sending threatening text messages to Iranians that warn them not to attend illegal gatherings or exchange “offensive” messages. In recent years, these have been common occurrences, just another part of the IRGC’s campaign to spread fear among Iranians.

Conclusion

The story of the TCI is a prime example of the IRGC’s use of misinformation for the purpose of wrecking its economic competitors. In this case, the IRGC captured TCI, elevated its misinformation campaign, and then renewed its destruction of political enemies with greater efficacy. In late 2018, as sanctions pressure mounted, the IRGC announced that it had exited the TCI. This exit, like the IRGC’s entry into the company, is far from transparent. In light of the IRGC’s history with the Sadra Company, where under the pressure of sanctions the IRGC allegedly sold its shares in Sadra to a private company but later resurfaced as a major shareholder under suspicious conditions, one cannot be sure whether the announcement is true. Whatever the case, though, the ownership and domination of a country’s telecommunications industry by a terrorist entity for at least a decade is a symptom of an advanced and deeply rooted economic cancer.

Foundation for Defense of Democracies

About Track Persia

Track PersiaTrack Persia is a Platform run by dedicated analysts who spend much of their time researching the Middle East, in due process we fall upon many indications of growing expansionary ambitions on the part of Iran in the MENA region and the wider Islamic world. These ambitions commonly increase tensions and undermine stability.