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French Version

Qordahi : Conditions in place for cellular decision - Minister awaits Cabinet approval (Daily Star)

Telecommunications Minister Jean Louis Qordahi said Monday that the decision to start the privatization or securitization of the mobile phone networks rests in the hands of “the politicians.”
“If it was up to me I would have started the process a long time ago. But this decision is left to the Cabinet,” Qordahi told The Daily Star.

The minister said he had completed all the conditions for the launch of both the auction and tender of two mobile phone licenses, adding that if the Cabinet endorses his plan on Thursday, the process of privatization or securitization will start very soon.

Six local and international companies are bidding for the auction and tender of the two mobile phone networks.

Qordahi, an adamant supporter of President Emile Lahoud, is calling for the creation of two entities to run the two cellular networks on behalf of the state if the government does not get a good price for the mobile phone lines.

Sources close to the government say that Prime Minister Rafik Hariri is not going to block any attempt to keep the mobile phone networks with the Telecommunications Ministry if privatization fails.

Hariri wants to give the bidding companies more time to come up with their offers.

Qordahi stressed that his call to create two entities to run the networks has the backing of the World Bank and the International Monetary Fund. “Why should anyone oppose this idea if its backed by the World Bank and the IMF?” the minister asked.

The two networks are still run by Cellis and LibanCell on behalf of the government.

All revenues, including the 20 percent share for the companies, are now netted by the government. Qordahi repeatedly asserted that the government’s share from the gross revenues of the networks rose to more than $47 million a month after the ministry took full control of the companies.

The minister said that special devices to determine the air time of the mobile calls were installed by the ministry a few months ago but the final results will not be ready until the end of the month.

The government badly needs a minimum of $3 billion from the privatization of the mobile networks to lower the $32 billion public debt.

However, many experts say that $3 billion is far from achievable at this moment.

Critics fear that the government may not get a fair price for the networks because most telecommunications companies are suffering huge losses.

They added that most of the bidding companies will not be able to meet the price the government is seeking. “If the government does not get a fair price then the only option left is to keep the cellular networks and securitize the revenues,” one expert said.

Former Telecommunications Minister Issam Naaman had claimed earlier that the government could fetch more than $5 billion from securitizing the mobile networks.

He added that it would be a fatal mistake to sell the cellular networks at any price.

A source close to Hariri said that if the Cabinet approves the launch of the bidding, the companies will have 45 days to prepare their financial statements.

He added that auction and tender should have started more than a year ago.

In 1999, the government of then-Prime Minister Salim Hoss rejected a $2.7 billion offer from Cellis and LibanCell to buy 20-year licenses to run the two networks. “If the government accepted the offer in 1999, the government could have lowered the public debt which was less than $20 billion at that time,” one economist said.

He added that successive governments missed many golden opportunities in the past.

Beirut 08-09-2003
Osama Habib
The Daily Star

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