Minister still expects mobile licensing this year

12 Apr 2007

Lebanon’s Telecoms Minister Marwan Hamadeh said yesterday that the government is sticking with a plan to sell two mobile licences by the end of this year. ‘Investment banks JP Morgan and Citibank have made great progress in their evaluation and reorganisation of the cellular sector in Lebanon and the government hopes to launch the tender for the sale of the two licences this summer,’ the minister told participants at the Arab Com 2007 conference in Dubai. Hamadeh said earlier that Lebanon hopes to raise USD5 billion to USD6 billion from the sale. He added that a third mobile company will be launched once a new full-service operator, Liban Telecom, is formed later this year. ‘Liban Telecom will have full control of the land lines in addition to a third cellular network. We have the right to privatise 40% of this network immediately with the option to sell everything in the next two years,’ Hamadeh said. At present, the country’s only two mobile networks – MTC Touch Lebanon and Alfa – are operated by Kuwaiti-based Mobile Telecom Company and German-Saudi consortium DeTeCon respectively, under four-year contracts. All mobile service revenues go to the government, while the two firms collect nearly USD4 million in fees each month. The government reportedly generates ‘more than USD750 million a year in net revenues’ from mobile services, making it one of the largest sources of income for the Treasury.

However, doubts have been cast on the state’s ability to meet its privatisation targets this year, given the fact that Speaker Nabih Berri refuses to convene Parliament because he views the current government as illegitimate. According to the government, all proceeds from privatisation will be used to reduce the USD41 billion public debt. The minister said that the Telecommunications Regulatory Authority (TRA), which was formed three months ago, is embarking on plans to pave the way for privatisation. ‘Many of the prerogatives of the ministry were transferred to the TRA a month ago,’ he added.