France Telecom, Zain and Orascom bid to operate mobile networks

12 Jan 2009

Lebanon’s Telecommunication Ministry on Friday received offers to operate Lebanon’s two GSM mobile networks from France Telecom (FT), Zain Group of Kuwait and Egypt’s Orascom Telecom, a source at the department told local newspaper The Daily Star. One of the bidders, Zain, is currently running one of the networks, Mobile Interim Company (MIC 2), under the name MTC Touch Lebanon, although the latest extension to its state management contract officially ended in December 2008. The other GSM network, MIC 1, branded as Alfa, is under control of the Telecom Ministry, after the government cancelled the operating contract of Fal Dete Telecommunications, a joint venture of Deutsche Telekom subsidiary DeTeCon International and Saudi Arabia’s Fal Holdings, at the beginning of December. It had been hoped that the state would launch the full privatisation of both cellular networks early this year, but the Cabinet has delayed the auction of controlling stakes until after parliamentary elections scheduled for May 2009, partly due to unfavourable global financial market conditions. TeleGeography’s GlobalComms datatbase notes that success for FT would mark a return to the Lebanese mobile market, as the French company’s France Telecom Mobile Liban venture was behind the launch of MIC 1 in 1995 under a ten-year build-transfer-operate (BTO) agreement with the government; it provided services under the Cellis brand until June 2004.

Telecoms Minister Jebran Bassil will submit the three offers to the Cabinet for study by ministers, with two one-year management contracts up for grabs. Winners are expected to be paid monthly fees by the government. MTC Touch and Alfa were paid USD4.2 million a month each in return for operating the networks. Bassil has said repeatedly that he wants the operators to expand the number of mobile lines in service and to improve efficiency. The overhaul is forecast to cost at least USD100 million. There are approximately 1.4 million mobile subscribers in Lebanon but Bassil has been pressing for the total to be increased to more than two million before the end of 2009.