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French Version

Companies eyeing mobile phone sector to be named Conflicting dates given for early 2003 - The Daily Star

The names of the companies seeking a share of Lebanon’s lucrative mobile phone sector will be made public on Feb. 14 of next year, Higher Privatization Council Secretary-General Ghazi Youssef said Thursday.

Companies are taking part in either the auction of two cellular licenses, or a tender to manage the networks on behalf of the government.

“We gave the companies interested in the bidding one month to apply officially,” Youssef told The Daily Star. So far 19 companies have expressed interest in taking part but none of them has officially applied.

However, a source close to Telecommunications Minister Jean Louis Qordahi said that no official deadline for the bidding has been set. “The date has not been finalized. The calendar will be final on Jan. 7,” the source said.

The conflicting reports between Qordahi and the Higher Privatization Council – which is controlled by Prime Minister Rafik Hariri – regarding the deadline for bidding are not the first of their kind. The two parties have openly disagreed on the mechanism of compensating the current mobile operators for revoking the 10-year built-operate-transfer contracts prematurely.

Cellis and LibanCell, which run a network of more than 800,000 subscribers, finally signed the transfer of ownership agreement earlier this month after weeks of debate with Qordahi over the contracts’ content. “Obviously Qordahi and Hariri have different views on how to proceed with the auction or tender of the cellular companies,” one telecommunications analyst said. He added that Hariri is strongly in favor of selling 20-year licenses for a lump sum and keeping 40 percent of the revenues for the government. “Hariri is against the idea of allowing the state to manage the networks if the prices of licenses are not up to expectations,” the telecoms expert said. He added that Qordahi, on the other hand, prefers to run the two networks for three years if the bidding is not to the liking of the government. Youssef, who is also Hariri’s adviser, was confident the international firms would offer a good price to the government as they were aware of the high revenues being generated by the cellular networks each year.

The government collected $320 million in revenues from both firms this year. Qordahi told As-Safir newspaper earlier that the Telecommunications Ministry collected $47 million in September alone after taking over the entire network from the cellular firms. This means that the total revenues from the two networks exceed $500 million a year. Economists say the government needs to get $2 billion to $3 billion from the licensing of the two cellular firms next year. All the proceeds from privatization will be used to reduce the $31.5 billion public debt.

Experts believe the government will be able to sell the two licenses before May 2003. Qordahi said the ministry will proceed with the privatization of the fixed telephone line operation in the middle of next year. The state owned Ogero telephone company will be named LibanTelecom to pave the way for the privatization of the networks. The fixed line network will be offered along with a cellular license under the umbrella of LibanTelecom.

Youssef said that the Higher Privatization Council hopes to privatize the electricity network once the sale of the two cellular licenses is completed, but he did not elaborate as to whether the government will sell the entire electricity company or just part of it.
With more than 3,800 employees, Electricite du Liban has incurred more than $1 billion in losses since 1995 due to its inability to collect all the bills. However, the company did manage to reduce its losses this year after the new chairman, Kamal Hayek, carried out a number of reforms.

Beirut 07-01-2003
Osama Habib
The Daily Star

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