Kuwait’s Mobile Telecommunication Co, better known as Zain has bagged the license to erect Iran’s third mobile network, after suspension of the license to an Etisalat lead consortium on failing to provide necessary guarantees and license fees on time, reports Reuters citing IRNA news agency.

Spokesperson Mohammad Reza Farnaghi-Zadeh at the Iranian Regulations and Radio Communications Organization, told the Iranian state news agency on Monday that the Etisalat-led group had "not fulfilled its obligations".

Earlier in January, the company had been awarded the license with a €300 million (US$402 million) payment and another US$5 billion investment pledged for the next five years.

The license includes GSM and 3G with two-year exclusivity for offering 3G services.

“With the elimination of Etisalat''s ... consortium from the third operator project, the Zain Iran consortium, which was runner-up in the bidding, takes over the project,” said Farnaqi.

Zain, Kuwait's top mobile operator has footprints across 23 countries in the Middle East and Africa.

In 2008, the Iranian government announced plans to sell off a second stake in the state owned telecoms operator, the Telecommunication Company of Iran (TCI). The government floated a five percent stake on the local stock market and is seeking an external investor.

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.