Telecoms company Vodafone feared it could be breaching European Union (EU) sanctions put on Iran by offering roaming services in the country, internal correspondence shows.
The UK multinational company privately warned that several mobile network operators were in danger of falling foul of sanctions barring companies from doing business with the Iranian regime.
The concerns were laid out in correspondence last year between Vodafone and the European Commission, the EU’s executive arm that proposes laws and sets trade policy.
In the correspondence, seen by The Irish Times, Vodafone said it was working with an Iranian company believed to have ties to the Islamic Revolutionary Guard Corps, a key arm of the regime.
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The March 8th, 2024 correspondence said several other European telecoms companies also relied on the same arrangement to offer roaming services to customers travelling or working in Iran.
Vodafone said the Iranian firm it had a roaming contract with, Mobile Communications Company of Iran (MCI), was possibly indirectly owned by an entity subject to EU sanctions. The majority shareholder of MCI is believed to be a company controlled by the Revolutionary Guard.
A 2010 package of EU sanctions barred states and firms from doing business with the company.
“Notwithstanding our understanding that some of our industry peers have and plan to continue relying on roaming with MCI, we saw the need to initiate termination of the contracts,” Vodafone told the commission.
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The commission agreed with the assessment, stating there were “reasonable grounds” to believe the Iranian telecoms company was indirectly controlled by a sanctioned entity.
Telecoms companies rely on local providers to extend mobile phone coverage to customers travelling in foreign countries. Vodafone Roaming Services, an entity registered in Luxembourg, agrees its global roaming deals.
Vodafone said it was concerned that abruptly severing its contract with MCI would result in diplomats, humanitarian workers, journalists and other Vodafone customers being cut off. It was taking “urgent steps” to ensure an orderly transition for its European customers based in Iran, particularly embassy staff.
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Vodafone said it planned to agree a roaming coverage deal with another Iranian telecoms company, RighTel. This was not ideal, as Vodafone said it had stopped working with RighTel in the past for “similar reasons” that were leading it to cut ties with MCI.
The UK telecoms company said it was “frustrated by the lack of urgency and clarity” from the EU executive, in helping businesses navigate sanctions. It seemed nothing was being done to pull up other companies who had roaming contracts with MCI, it wrote.
Vodafone said it felt justified in delaying “any premature termination” of its existing roaming deal, until it had alternative arrangements in place with RighTel.
In an April 3rd, 2024 response, the commission said it took “good notice” of Vodafone’s plan to terminate its contract with MCI, but could not provide further guidance.
It is understood Vodafone proceeded to stop working with MCI. “Vodafone has policies and procedures in place to ensure adherence to legal obligations in the territories in which we operate ... We confirm that we do have roaming connectivity in Iran,” a spokeswoman said.
In correspondence to the EU body, Vodafone complained that tracking who controlled companies in Iran was difficult. Ownership structures were opaque and often shifted, with “many shareholding parties likely to be EU sanctioned entities,” it wrote.
“We may very likely find ourselves in the situation having to once again terminate our potential agreement with RighTel in the future (again while some other EU operators refrain from taking any action),” it said. Maintaining roaming services in Iran in that situation “could therefore become unworkable,” Vodafone said.
The UK group recommended the commission introduce exemptions that would allow “basic critical telecommunications services” to continue in countries subject to economic sanctions.
