Government guilty of dishonourable disqualification over mobile management

10 Mar 2005

The Lebanese government has been ordered to pay American Telecom Group USD420 million following a US District Court ruling that the Oakland-based provider was unfairly disqualified from bidding for the management contracts of two state-owned Lebanese mobile operators. It remains to be seen whether the telco will ever see any of the money, however, after the judgement was handed down by default due to the Lebanese government’s repeated refusal to respond to the lawsuit. The government has yet to make any public response to the court ruling, made in Detroit, Michigan.

American Telecom’s Lebanese expat chairman Issam Beydoun filed the complaint after claiming to have had two of his companies disqualified from the bidding of contracts to run state-owned cellcos Cellis and LibanCell, now known as MTC Touch Lebanon. The suit claimed that the Lebanese government encouraged US firms to bid for the contracts only as a means of luring European companies to the tender. Despite the fact that his bids were better than those of the eventual winners, Mr Beydoun claims that the government never intended to offer the contracts to any US business because of anti-American sentiment in the Syrian-controlled Lebanese government. Germany’s DeTeCon and MTC of Kuwait were awarded the management rights to the cellcos in June 2004. Mr Beydoun says that his companies offered to manage either cellco for USD3.99 million per month, considerably less than both DeTeCon and MTC’s prices of USD4.2 million and USD4.25 million respectively.