|Hamadeh insists telecom privatization still on track
|Unclear how sales can happen without parliament
Telecommunications Minister Marwan Hamadeh said on Wednesday that the government still intends to sell two mobile licenses before the end of 2007.
He added that a third mobile company will be launched once LibanTelecom is formed later this year. "Investments banks JP Morgan and Citibank have made great progress in their evaluation and reorganization of the cellular sectors in Lebanon and the government hopes to launch the tender for the sale of the two licenses this summer," the minister told participants at the Arab Com 2007 conference in Dubai.
Privatization is one of the key elements in the government's five-year economic reform plan that was submitted to Paris III donor conference on January 25.
Hamadeh said earlier that Lebanon hopes to fetch $5 to $6 billion from the privatization of the two mobile licenses.
At present, the country's only two mobile networks are operated by Kuwaiti-based Mobile Telecom Company and the German-Saudi consortium Detecon under four- year contracts.
All the revenues of the mobile networks go to the government, while the two firms collect nearly $4 million in fees each month.
The government generates more than $750 million a year in net revenues from the mobile networks, making it one of the largest sources of revenues for the Treasury.
But its unclear if the government can meet the target before the end of 2007, given the fact that Speaker Nabih Berri refuses to convene the Parliament because he views the current government as illegitimate.
Telecom experts stress that the Parliament must approve the sale of the licenses.
According to the Telecommunication Ministry, there are more than 1 million mobile subscribers and 600,000 land lines in Lebanon.
"LibanTelecom will have full control of the land lines in addition to a third cellular network. We have the right to privatize 40 percent of this network immediately with the option to sell everything in the next two years," Hamadeh said.
According to the government, all proceeds from privatization will be used to reduce the $41 billion public debt.
The minister said that the Telecommunications Regulatory Authority, which was formed three months ago, is embarking on plans to pave the way for the privatization of the networks.
"Many of the prerogatives of the ministry were transferred to the Telecommunications Regulatory Authority a month ago," he added.
The government argues that telecom privatization will not only help reduce the public debt but also cut the cost of calling and bring in more investment.
Hamadeh noted that the ministry had already cut the rates for international calls by 40 percent to 60 percent.
"We are also considering cutting the rates of local land lines and cellular calls, although this measure may have a short-term effect on revenues," he added.
The Daily Star