Lebanon Telecom News
etisalat considers bid for Lebanese
telecom firm (From
The Gulf News, December 24, 2007)
Dubai - Emirates Telecommunications Corp (etisalat) said
on Monday it was considering a bid to take over one of two Lebanese mobile
phone firms that the government has said it wants to sell for as much as $7
billion.
etisalat would decide on whether to compete for Alfa or
MTC Touch by the end of next month, Jamal Al Jarwan, chief executive of
etisalat International Investments, said.
"We will decide by the end of January
whether to bid, after completing our study of the market and valuations of
the companies," Jarwan said. "Right now, we are studying the
market, looking at what the business drivers are and what the growth
prospects are," he said.
Lebanon expects to sell majority stakes in two state
mobile phone firms in February and offer the rest to the public to raise as
much as $7 billion, the country's telecommunications minister said in
October.
The country planned to use the funds to service
huge public debts of about $41 billion, or 180 per cent of gross domestic
product, Marwan Hamadeh said at the time.
Lebanon's population of about four million pay among the
most expensive mobile phone charges in the Middle East,
with average revenue per user of above $50 a month, Jarwan said.
Mobile phone penetration in the country was about
28 per cent, Hamadeh said in October.
"It is always appealing to buy existing
assets which have a subscriber base," Jarwan said.
etisalat, which has operations in 16 countries including Egypt, Saudi
Arabia and Pakistan, has been expanding
outside of its home market, where mobile phone penetration exceeds 150 per
cent.
It lost a telecom monopoly in the UAE this year
after du started a mobile network in February.
The state-controlled telecom operator said
earlier this month it would buy 16 per cent of PT Excelcomindo Pratama Tbk
for $438 million to enter Indonesia,
the world's fourth most populous country.
In the last month, it has lost bids to enter
mobile phone markets in Kuwait
and Qatar.
etisalat led a group in 2006 that paid 16.7
billion Egyptian pounds ($3.1 billion) for the third mobile phone license
in the country.
"We will not be value destructive. We will
only bid what we believe the asset is worth," Jarwan said.
Approval
Any telecom bids would have to get final approval
from the country's new president, the telecommunications minister has said.
The Western-backed government and pro-Syrian
opposition have agreed on army chief General Michel Sulaiman as president, but
the opposition wants guarantees it will have veto power in a future
coalition.
Lebanon's Western-backed ruling coalition and the pro-Syria
Hezbollah-led opposition have been locked in a dispute over sharing power.
Report: Zain eyes bid for Lebanon telecom firm(October 28, 2007)
KUWAIT (Reuters) - Kuwait's Mobile
Telecommunications Co. (Zain) is planning to bid for a majority stake in a
Lebanese mobile phone operator, al-Rai newspaper reported, citing Zain's
chief executive officer.
Lebanon is considering
selling majority stakes in its two state mobile firms in February to raise
as much as $7 billion, the telecommunications minister said this month.
Zain would bid for one of the firms,
the company's chief executive, Saad al-Barrak said in a statement to
al-Rai.
"The price is bigger than the
value of both companies," he said, of the $7 billion figure.
Zain, the second largest Arab telecom
company by market value, is expanding abroad as competition intensifies in
Kuwait, where the government is setting up a third operator in a country
that already has more mobile phones than people.
The mobile penetration rate in Lebanon is
around 28 percent, Telecommunications Minister Marwan Hamadeh told Reuters
on Oct 11.
Lebanon also plans to offer
shares in the two state operators, Alfa and MTC Touch, to the p3ublic, he
said.
Lebanon's telecom strategy is
shortsighted (July
5, 2006)
Beirut - The Lebanese
government has been so blinded in its dependence on the telecom revenue
that it forgot the big picture...which is the importance of the IT sector
in driving the economy.
According to local newspaper reports,
expensive Internet connection costs and low levels of technical progress
resulting from the government's telecom monopoly are deterring foreign
investment in Lebanon.
InfoPro Research pays $1000 per month
for a leased line, said general manager, Imad Bashour, who said the
government must reduce rates to regionally comparable levels and increase
bandwidth capacity in order to attract the private sector to Lebanon.
"When investors come here and want
to set up a business they look at the IT infrastructure and they see it is
overpriced, and there are time limitations and volume limitations. To pay
$1000 per month for a leased line is ridiculous,
in Dubai
they pay, what, $50?" Bashour said.
According to Zuheir Berro, head of a
consumer advocacy group, the internet sector in Lebanon has grown by only 2 %
in six years , while in other Arab countries the
growth averaged 50 %. This is a ridiculously low growth rate for a country
that was the leader in internet penetration in the 90's.
The Telecom Ministry has been very slow
in introducing the digital DSL network. According to the most recent
reports the DSL will be operational in September. Minister Marwan Hamade
should make sure that this deadline is met.
Although internet tarifs have been
reduced.... but so far this has been too little too late.
Berro said that he met with Hamade in
June and asked him to speed up the progress of telecom privatization,
accelerate rate reductions, and "put these problems out of political
conflict." Hamade agreed that privatization is imperative, but said
the process is more difficult than it would seem since 38 percent of the
state's budget comes from telecom revenues.
According to reports only $40 million
(out of the 38 % ) comes from Internet revenues.
This is a ridiculously small amount of money for the government to depend
on and it clearly displays how shortsighted governments can be when they
mix business with politics.
In this day and age Internet is the
most important factor in driving modern economies. It is about time the
government realizes this important fact if it wants foreign investors to
come to Lebanon.
Time to look at the big picture, otherwise Lebanon
will forever miss the boat of progress.
Telecom firm first to list on new Dubai exchange (October
14, 2005)
DUBAI (AFP) - Lebanese-based international
telecommunications firm Investcom became the first company to list its
shares on the newly-launched Dubai International Financial Exchange (DIFX).
The company, which has operations in the Middle East,
Europe and Africa, raised 740.94 million
dollars in an initial public offering (IPO) of 59.99 million Global
Depository Shares, the DIFX said Friday.
These are listed and traded on both the DIFX and London
Stock Exchange.
"The listing of Investcom so soon after the opening
of the DIFX demonstrates the market's unique appeal," said DIFX chief
executive Steffen Schubert.
"As the only truly international exchange in its
region, the DIFX gives issuers access to regional and international capital
... By the end of 2006, we expect 10 to 15 IPOs listed by companies based
across the region and beyond."
The DIFX opened on September 26 with the listing of five
Deutsche Bank securities.
It will develop trading in a wide range of asset classes
including equities, bonds and sukuk, a sharia-compliant product, and
intends to add derivatives within its first year of operation.
The DIFX has said it will be the first stock exchange in
the Middle East to list financial
derivatives, index products and financial instruments compliant with
sharia, or Islamic law.
The bourse aims to become the leading international stock
exchange located between Europe and Asia, with the Gulf emirate of Dubai aiming to become
the oil-rich region's top business and tourism hub.
Cellular firms,
government could face legal action (From
The Daily Star, August
30, 2004)
- Preparations for suing the government
and the two cellular companies managing its network are ongoing, according
to organizers of the recent cellular boycotts in Lebanon.
"We have discussed the matter of a lawsuit," said Consumer's Lebanon
executive director Abdul-Rahman Berro at a news conference Thursday.
He said that legal action was in the works because the government had not
moved on boycotters' demands.
"We will be suing the government and both cellular companies operating
in Lebanon
- together or each separately - after we get a legal opinion from the
Lawyers' Syndicate," he added.
Berro, who spoke at the General Labor Confederation (GLC) headquarters,
explained that the whole case "is in the hands of Lawyers' Syndicate
president, who is currently looking into the companies' laws and contracts,
next to other legislation in the case."
Meanwhile, organizers of the cellular boycott - which includes various
labor and social committees and syndicates - are set to hold a series of
news conferences at each of their respective headquarters.
"We will be gathering signatures during those meetings to stress that
we are all connected in the matter of achieving our demands," Berro
said, adding that this kind of action "ensures that our cause remains
alive."
The call for legal action came as a result of Thursday's meeting between
organizers, where it was agreed that a mutual action strategy was needed.
One central participant, the GLC, after the meeting called for immediately
lowering cellular call rates, eliminating the monthly cellular fee of
$27.50 and returning the $500 cellular line membership fee to those who
have paid it.
"There has to be a united action against cellular
irregularities," said a declaration from boycott organizers.
"The telecommunications law issued back in July 2002," must be
respected, it added.
Organizers also stressed the importance of building up a stronger internet
communication system during the meeting.
"Once the internet system is enhanced, telecommunication prices will
be surely drop," said Berro, explaining that
the current internet system is too slow, and thus ends up increasing costs.
"If sending a file takes two minutes and opening it by the recipient
takes two minutes, then we both have wasted 240 seconds," he said.
He went on to note that DSL, a low-cost technology currently unavailable in
Lebanon,
could take "as little as 6 seconds instead of 240 seconds to send and
receive the same kinds of files."
Organizers also affirmed on Thursday that a third cellular boycott is
scheduled to take place as planned in the middle of next month.
Lebanese cell
phone users protest prices (July 15, 2004)
BEIRUT (UPI) - Thousands of Lebanese switched
off their cellular phones Thursday to protest against the high cost of communications,
among the most expensive worldwide.
The protest under which phones were to be switched off
for 24 hours was organized by economic associations and labor unions, and
was expected to deprive cell phone operators of $2.3 million if strictly observed
by the majority of mobile phone holders, estimated to number more than
800,000.
Labor union sources said strike observers were making
random calls to mobile phone numbers to verify the extent to which the
boycott was being observed. They said most of those contacted had their
phones turned off, indicating widespread participation in the boycott.
The organizers complain that the cost of mobile phone
communications in Lebanon
is the highest in the Middle East and
among the most expensive in the world.
The unions are demanding the cancellation of monthly
subscriptions and reduction of the cost of communications.
Lebanon's lucrative mobile phone sector
provides the government with more than $800 million in annual revenues.
Majority of
Cellis, LibanCell staff resign (From The Daily Star, May 18, 2004)
BEIRUT
- The resignation of 70 percent of employees at mobile operators Cellis and
LibanCell has raised serious questions just 15 days before both cellular
networks are to be transferred to new firms.
Industry sources said that 70 percent of staffers at LibanCell, as well as
65 percent of staffers at Cellis, have submitted their resignations over
the past two months.
The German firm Detecon and the Kuwaiti Mobile Telecom Company are
scheduled to run the two networks on behalf of the state as of June 1.
"The companies that will take over the management of the mobile
operators on June 1 will not be able to increase salaries since the same
amount of money will be allocated to them by the Telecommunications
Ministry. Thus since such an attractive end-of-service package was offered,
employees have preferred to try their luck somewhere else," said
telecommunications expert Riad Bahsoun
Detecon and MTC offered prices 40 lower than the current operators to manage
the 840,000 cellular lines, a move which strengthened the argument of
Telecommunication Minister Jean-Louis Qordahi that Cellis and LibanCell are
overcharging the government.
"Cellis and LibanCell staff received 30 months' salary. This package
was part of an option that was offered to the staff who wanted to leave the
companies," one telecom expert said, adding that the total amount of
compensation to be paid out will be more than $20 million.
"There is no breach in any contract, since these compensations are in
accordance with the Labor Ministry's law," he added.
The operators now insist that the 30-month salary package had the approval
of the Telecommunication Ministry, denying allegations that staffers were
encouraged to leave their posts.
Detecon and MTC officials said that they will comment on the resignation of
the staff in the coming days.
However, telecom experts said that the mass resignations will have a
limited impact on the overall operations of the new operators.
"I don't think MTC will have a problem finding replacements,"
according to one telecom expert.
He added the resignation of the staff at this moment was aimed at
embarrassing Qordahi.
Sources claimed the ministry will soon be sending warnings to LibanCell
through its lawyers for breaching the management contract by offering jobs
to their employees outside the country.
LibanCell selects Openwave to power
Lebanon's
first mobile multimedia services (April 28, 2004)
REDWOOD CITY, Calif. (PRNewswire) - Openwave Systems Inc., the leading
provider of open software products and services for the communications
industry, today announced that Lebanon's
mobile operator, LibanCell, has selected the Openwave® Mobile Access
Gateway (MAG) Version 6 and Openwave® Multimedia Messaging Services Center
(MMSC) as the foundation for the launch of Lebanon's first multimedia
messaging services.
LibanCell chose to upgrade its network to enable MMS and
other innovative services in Lebanon, and will benefit from
the outset from Openwave's commitment to deliver the best possible
experience of mobile data services on new and legacy handsets to all end
users through its messaging infrastructure products.
Openwave MAG 6 is the most established, interoperable and
standards compliant gateway on the market, providing a complete and
integrated solution for WAP 1 and WAP 2 capabilities. Increasing the
addressable market for operators by delivering the optimum page quality for
each visiting browser, MAG 6 allows the operator to manage subscriber
identity and enforce business policy on a network level by dividing
subscribers into different groups and applying access control, billing and
routing.
Openwave MMSC leverages the strengths of MAG 6 and allows
users to send, receive and remotely store messages that contain text,
music, graphics and video in an intimate, tailored and intuitive way. In
addition, it includes best-in-industry email interoperability, the widest
range of MMS and legacy handset support, and a rich set of pre-built
applications -- including an image gallery and photo albums
Openwave MAG 6 and MMSC will enable LibanCell to offer
its end-users new product offerings and business models including a
customized delivery solution for machine to person (M2P) WAP Push and
Multimedia messages. This capability allows carriers to push personalized
WAP and MMS content to its end-users around major events while also
creating awareness of data services and stimulating usage.
"Lebanon
has grasped mobile telephony with both hands, and adding attractive
multimedia services to our offering will enable us to grow our market share
even further," said Mouin Abdallah, LibanCell's Technical Development
Unit Manager. "Openwave's commitment to working with operators to
develop their offerings and its unrivalled heritage in underpinning new
mobile data applications and services made its MAG and MMSC obvious choices
as the foundation for our services."
Alan Black, managing director of EMEA at Openwave
commented: "With new handsets supporting MMS applications and
downloads becoming increasingly available across the world, operators that
can quickly configure their networks to take these advanced data services
to previously untapped markets will increase customer loyalty and open up
new revenue opportunities. By investing in Openwave MAG 6 and MMSC,
LibanCell can offer leading data and messaging services that deliver a high
quality end user experience and reap the rewards that offering such a
service can bring."
Openwave is a leader in the mobile messaging
infrastructure segment with over 70 MAG deployments to date. More than 20
operators have selected Openwave multimedia messaging software globally,
over an addressable subscriber base of 114 million end-users.
Lebanon: MTC and
Detecon gear up (From The Daily Star, April 22, 2004)
- The mobile companies
that won the Telecommunications Ministry's tender process in mid-April to
manage Lebanon's
two mobile networks have both committed to signing the formal and final
contracts with the ministry on Wednesday.
They are promising to bring along many positive changes for a mobile sector
which has been inert for over two years. Mobile Telecommunications Company
(MTC) has signed already, with Detecon still in the process of finalizing
their contract.
The Daily Star contacted the vice president of Detecon, Dirk Munning, but
he refused to comment at this time on the strategies, pricing and services
the German firm plans to introduce. "We will have more to say by next
week," said Munning.
The contract, which states that the mobile companies have to start managing
the networks no later than June 1, 2004, were signed by German firm Detecon
for the Cellis network and Kuwaiti firm MTC for the LibanCell network. The
government will thus effectively pay Detecon $201,316,292 to manage Cellis
and MTC $209,301,151 to manage LibanCell - both for a period of 48 months.
According to the Chief Executive Officer of MTC Saad Barrak, his company
plans to dramatically modernize the network which is under his supervision
by adding 250,000 lines to the existing 400,000 lines, ameliorating the
quality and choice of services and introducing cost-effective pricing.
"However, we will have to present the business plan to the
Telecommunications Ministry first since it will have to bear the capital
expenditures of any necessary investments," Barrak told The Daily Star
in a closed session on Tuesday. "But if the ministry approves our
ideas, then we will develop the sector to world-class standards through the
latest technologies available, that will bring about maximum financial
benefits for the government and the public," he added.
Barrak expects the ministry to endorse his company's ambitious plan after
MTC is inaugurated as the manager of LibanCell in June.
Asked about the possibility that the ministry could refuse to endorse MTC's
plans in full, thus rebuffing any price decreases or investments to
modernize the sector, the CEO said the Telecommunications Minister
Jean-Louis Qordahi was keen on providing the best services and best prices
in the region.
"Two years ago, Lebanon's
mobile sector used to be on a par with the best providers in the region in
terms of services offered and quality of services. Today, the mobile sector
has lost that lead since any advancement has been frozen since 2002,"
said Barrak.
Barrak said that MTC and Detecon will try to compete in the most serious
manner, but since both companies only have management contracts and work
for the same client (Telecommunications Ministry), there will be no free
hand on pricing and capital expenditures, thus the level of competitiveness
will be limited.
"The incentives for competition are not there since we are both (MTC
and Detecon) owned by the ministry. Having said that, MTC will definitely
try to make the most out of it and attempt to introduce a competitive
atmosphere," said Barrak.
MTC is ready to
expand, upgrade LibanCell network (From The Daily Star, April 10, 2004)
- The Mobile
Telecommunications Company (MTC), which recently won the tender process to
manage the LibanCell network, plans to add 250,000 lines to its network
within 48 months, improve quality and choice of services, and introduce
cost-effective pricing.
"We have lots of ideas and a good track record for introducing the
most aggressive and cost-effective prices," said MTC Chief Executive
Officer Saad Barrak. "However, we will have to present our business
plan to the Telecommunications Ministry first since it will have to bear
the capital expenditures of any necessary investments. But if the ministry
approves our ideas, then we will develop the sector to world-class
standards through the latest technologies available that will bring about
maximum financial benefits for the government and the public," he
added.
According to the CEO, Lebanon's
mobile phone penetration rate, which currently stands at approximately 20
percent, could easily reach 40 percent if services and prices were
attractive and tailored to meet the requirements of the country.
Asked by The Daily Star about his thoughts concerning the tender process,
Barrak responded that it was very impressive and extremely transparent.
Nevertheless, he admitted that his company objected to the fact that
Detecon - the German company that won the rights to manage the only other
network, Cellis - had the leeway to choose its favorite network. This
ability to opt for a network was stipulated in the tender process and was
only available if a company offered the lowest price for both networks.
Detecon asked for $192.3 million for LibanCell and $201.3 million for
Cellis - both the lowest offers for the 48-month contract.
"We never imagined that a company would offer the lowest bid on both
networks and that raised a lot of concerns," said Barrak. "Having
said that, this will allow the government to save $11 to $12 million a
month and that goes along with the logic of the tender."
MTC is currently cooperating with Detecon in several other countries, but
in Lebanon
"we prefer to remain competitors to develop this market and extend
significant benefits to the public. This will definitely be under the
guardianship of the ministry," Barrak said, who also added that
Telecommunications Minister Jean-Louis Qordahi has been actively working to
introduce an independent and transparent regulator for the sector.
MTC will begin managing LibanCell within 50 days, as specified in the
letter of notification it received on Thursday from the ministry. Thus, by
the beginning of June, the Kuwaiti company should have concluded the
transition process.
According to the CEO, MTC has always been very impressed by the quality of
LibanCell's employees and resources. "We want to make many changes in
the management side of LibanCell, but in the overall organization,
resources and structures, we don't intend to introduce anything
significant. We would like to support these current resources and develop
them to a better level," Barrak said.
Asked if the name of the current operator would change, Barrak responded
that it would be the government's choice since it owns the brand name.
"If the government decides to buy the name, then that is fine with us,
but if it decides to change the brand, then we will be most
cooperative."
Barrak, who has a keen interest in seeing MTC buy one of Lebanon's networks when the
privatization process begins, believes that by managing the LibanCell
network in a professional manner, the firm will prove to the government it
would be a serious investor and partner in any future plans.
"I am proud to have been entrusted by Lebanon
to manage a major operation in the sector, especially when we had tough
competitors such as Orange,
Detecon and Telenor. We have been undergoing a very aggressive expansion
program throughout the past 18 months and this victory in Lebanon is a significant
milestone for us. We will definitely positively contribute to the overall
economy and specifically to the development of the Lebanese telecom sector
and its users," Barrak said.
Kuwait's MTC wins
Libancell management contract (From menareport.com, April 7, 2004)
- Kuwait's
MTC wins Libancell management contract Lebanon's
Telecommunications Ministry has selected Kuwait's Mobile
Telecommunications Company (MTC) to manage the LibanCell wireless network.
Results will be made official by the Cabinet Wednesday.
MTC was awarded the contract after the ministry selected Detecon
International to manage one of the country's two cellular companies for a
four-year period. The Deutsch Telekom Group affiliate chose to operate
Cellis.
Seven international companies submitted bids to manage Lebanon's two mobile networks
at the end of March. Lebanon’s
Higher Privatization Council selected Luxembourg’s
Investcom, France's
Orange, Greece's
OTE, Germany's Detecon
and Kuwait's
MTC and Wataniya as eligible bidders in 2003.
Detecon offered the lowest bids for both providers; Libancell for $192
million and Cellis for $201 million, reported Daily Star. MTC was
the second lowest bidder, asking for $209 million for LibanCell and $254
million for Cellis.
In July 2002, the Lebanese government decided to put the country’s two
cellular networks up for sale through an international public tender.
Liberalization of the telecom sector was one of the prerequisites set by
international donors pledging four billion dollars to help reduce the
state's public debt.
Telecom giant Orange reportedly in
talks with German firm on mobile deal (From The Daily Star, April 5, 2004)
- The French giant
telecom company Orange is reported to be in
negotiations with the German firm Detecon to run one of Lebanon's mobile networks.
According to industry sources, the French are trying to persuade the
Germans to run LibanCell and keep Cellis for Orange. Detecon, which is affiliated with
the giant Deutsche Telecom, has offered to run LibanCell for four years for
$192.3 million, or $4 million a month, and Cellis
for $201 million, or $4.1 million a month.
The second runner-up was the Kuwaiti Mobile Telecom Company (MTC), which
offered to run LibanCell for four years for $209 million, and Orange, which offered
to run Cellis for $229 million.
The Cabinet, which met on Saturday, approved the results of the management
contract that were conducted by Telecommunication Minister Jean-Louis
Qordahi.
Seven companies participated in the public tender in the presence of
ambassadors from the United
States and European countries. The
sources claimed that Orange,
which wants to stay in the Lebanese market, was willing to offer Detecon
$10 million so it will give up Cellis and run LibanCell instead.
"Orange
has a wide range of interests with Deutsche Telecom in many parts of the
world," a telecom expert told The Daily Star on Sunday. He also added
that Detecon has not responded yet to the French offer. The Daily Star
called the vice president of Detecon, Dirk Munning, in Germany but he was not
available for comment.
If Detecon selected Cellis, MTC will definitely run LibanCell, but if the
Germans selected LibanCell then Orange
will operate Cellis. Detecon is expected to make its selection in the
coming few days.
The winning companies now have less than 60 days to move to the premises of
Cellis and LibanCell.
The Telecommunication Ministry stressed that the new offers will allow the
government to save $80 million a year since Cellis and LibanCell charged
$7.5 million a month to run the networks on behalf of the government. The
ministry further contends that the new companies will maintain the same
quality of services to customers and that the tariffs will not change from
present levels because the government still needs the high revenues to keep
the budget deficit at bay.
However, sources close to the ministry said that the new companies will
raise the number of subscribers in the coming few years. The revenues from
the two cellular networks reached around $49 million a month since the
government took full control of the companies more than a year ago. This
revenue represents more than 20 percent of the total income of the state.
Supporters of President Emile Lahoud, who backed Qordahi's tender process,
argue that the revenues from the networks may reach $1 billion if the new
companies managed to increase the number of subscribers to more than one
million from the current 840,000.
The government has abandoned privatization of the telecom sector on the
ground that the prices of the telecom sector in international markets are
too low. But most observers say that political discord among politicians is
the main reason behind the delay in privatization.
Qordahi earlier said that the government may securitize part of the
revenues of the telecom sector in the future to reduce the $33 billion
public debt. The minister believes that the government can generate up to
$7 billion from the securitization of the telecom revenues. But
privatization advocates say that the failure to sell the telecom sector to
private interests deals a big blow to Lebanon's reputation.
Meanwhile, the chairman of the American Telecom Company (ATC), Issam
Beydoun, claimed that the ministry intentionally prevented his company from
offering prices in the tender. He added that ATC will file a complaint to
Lahoud and other Lebanese officials. However, sources at the ministry
claimed that ATC presented filing documents that did not meet the tender's
criteria.
Lebanon awards Detecon cellular contract (April 3, 2004)
BEIRUT (Reuters) - Lebanon
asked Detecon International on Saturday to choose which of its two mobile
phone networks it wanted to run, after it offered the lowest bid in a
tender for contracts.
Detecon
International, part of Deutsche Telekom AG, was one of nine international
firms who bid in a tender to manage the networks on the state's behalf
after an attempt to privatize them failed two months ago.
The cabinet asked Detecon "to
choose a network that it would manage and to announce its choice before
Wednesday, April 7 for presentation to the cabinet".
The German firm bid $201.32 million for
one network and $192.31 million for the other. But the tender's conditions
do not allow one company to manage both networks.
Depending on Detecon's choice, the
remaining network is expected to go to either Orange,
which entered the second lowest bid for the first network at $229.30
million, or Kuwait's
Mobile Telecommunications Company (TELE.KW) which came in second on the
other at $209.30 million.
Telecommunications minister Jean Louis
Qardahi said on Monday that a total of 15 international firms had been
short-listed to take part in the bidding, but nine had bid and two of those
were disqualified.
The tender was arranged after an
auction for 20-year licenses failed on January 31 because most short-listed
firms dropped out before bidding began.
Telecoms privatization was for years key to Lebanon's plans to cut a public
debt of more than $31 billion, which stifles growth and consumes most
government revenues in debt servicing.
Bids received were on average 27 and 30
percent lower respectively than the $7.5 million a month the government now
pays each of the incumbents, France Telecom subsidiary Cellis, and
LibanCell, to run the networks on its behalf.
Mobile bids
dramatically lower than current cost (From The Daily Star, March 30, 2004)
- Seven companies
submitted their offers for four-year management contracts of Lebanon's
two cellular networks on Monday, with the German firm Detecon offering a
price 30 percent lower than the current fees charged by Cellis and
LibanCell.
The offers, which need the approval of the Cabinet on April 9, prompted
President Emile Lahoud to commend the tender process, which he said will
save the government up to $80 million per year - an amount equivalent to
annual government expenditures on hospitalization, he said.
Lahoud also took an indirect shot at his rival, Prime Minister Rafik
Hariri, saying "The efforts that were made to rescue the cellular
sector from the two companies (Cellis and LibanCell) ... were not merely
political maneuvers; they were aimed at safeguarding the interests of the
state as well as citizens."
Detecon, which is part of Deutch Telecom, offered to run the LibanCell
network for $192.3 million for four years, or $4.02 million a month. They
also offered to run the Cellis network for 201.3 million, or about $4.1
million a month.
The remaining bidding companies offered prices ranging between $209 million
to a maximum of $324 million for each four-year management contract - with
some of the offers nearly 30 percent less than the amount charged by the
current mobile operators, Cellis and LibanCell.
Both companies run the networks on behalf of the government for $7.5
million a month.
Sources told The Daily Star said that many ministers and political parties
will start asking why the current operators were charging what seems like
high fees to run the networks. They added that the low offers will also
embarrass some of the politicians who were behind Cellis and LibanCell.
The two companies are owned entirely and partly by businessmen directly
related to some Cabinet members, including Hariri.
After a marathon meeting with the bidding companies that lasted more than
nine hours, Telecommunication Minister Jean-Louis Qordahi
told reporters about the outcome of the tender.
"The tender was conducted in a transparent manner under the
supervision of ambassadors of many countries. The results will be reviewed
by the ministry in the next three days to ensure that all the documents are
in order," the minister said.
The seven companies which submitted offers were Detecon of Germany, Orange
of France, Orascom of Egypt, Mobile Telecom Company (MTC) of Kuwait, Telenor of Norway, Telcom Italia
Mobile (TIM) of Italy
and Digicel of Ireland. The American Telecom Company (ATC) and Sunday of
Hong Kong were both disqualified from the bidding because the papers they
presented to the ministry were not complete.
Qordahi said that the ministry gave all companies equal chances to submit
offers, adding that all questions posed to his team were answered in full.
Dirk Munning, the vice president of Detecon, expressed his satisfaction
with the tender process, adding that his company is willing to improve the
cellular networks if his firm wins the contracts.
The government has temporarily shelved plans to privatize the cellular
networks due to the poor conditions in the telecom market, but Qordahi
stressed that the government is entitled to scrap the future management
contracts with the new companies provided they get six-months notification.
The minister also said he will travel to Geneva on Tuesday to attend the first
arbitration session against Cellis. Qordahi believes that the government
has a very good chance to win the arbitration that is set to begin against
both mobile operators.
Supporting the ministry's side, Former Prime Minister Salim Hoss claims
that both companies have violated their contracts by exceeding the number
of subscribers and illegally using the ministry's microwaves.
Final offers
for cellular network due March 29 (From The Daily Star, March 25, 2004)
- Arab and foreign
companies are expected to submit their final offers to manage the cellular
networks on March 29, under the watchful eyes of ambassadors and the World
Bank.
Telecommunication Minister Jean-Louis Qordahi and his team met with the
representatives of 11 companies on Wednesday for the last time to answer
all queries on the tender day.
Fifteen companies obtained the tender documents so far but only 11 of them
attended Wednesday's meeting.
The minister said that those companies that did not attend the meeting may
still be interested in submitting offers.
He added that the companies expressed their satisfaction at the steps taken
by the Telecommunication Ministry to overcome any last minute problems.
"We received over 700 questions on the tender process and most of them
were answered by our team," Qordahi said.
He added that 300 of these questions dealt with legal issues and the rest
on financial and technical matters.
Qordahi will announce the lowest offers to the companies but without
disclosing the name of the firms that extended these offers.
The minister will then ask the companies if they are ready to offer lower
bids for the contract management.
Once the final offers are submitted in writing, the minister will file a
report on March 30 to the Cabinet, which will meet on April 8 to review and
select the best offers.
The government, which temporarily shelved the privatization of the telecom
sector until market conditions improved, has invited companies to submit
their offers to manage the two cellular networks for four years.
The current operators, Cellis and LibanCell receive $15 million a month to
run the networks on behalf of the government.
Qordahi hopes to get lower offers from the new companies, but not at the
expense of quality and other services. "We want good prices for
running the networks without compromising the quality and services of the
telecom sector," the minister told reporters.
He added that the ambassadors of America,
Britain, France, Ireland,
Russia, Sweden, Italy,
Egypt, Germany and Kuwait
will be invited to the tender along with the EU ambassador to Lebanon
and the World Bank representative.
The ambassadors were invited to the event to ensure that the tender process
is conducted in an orderly and transparent manner. This is the first time
the government has invited ambassadors to attend a public tender.
"We have reached the last mile in our journey and the ministry's data
room will close for good on Friday," Qordahi said.
Asked if he is optimistic, the minister said "I am pleased with the
mechanism of the tender process. The meeting with the companies was very
positive and they all got the answers that they were looking for."
New handsets are
way forward for the cellular market (From The Daily Star, March 23, 2004)
- Cell phone vendors
in Lebanon
needn't bother trying to convince more people that they need a cellular
phone. Rather, they need to convince them that they need a new one.
It was easier in the early days, when war-destroyed land lines made their
diminutive wireless counterparts essential. But ever since the number of
cellular accounts was limited to 800,000 in 2000, distributors have had to
shift their strategy to hawk their wares to customers who already own
telephones.
Perhaps when Stephen Shipside wrote in Wired magazine back in 1998 that
"there's no point in having a cell-phone (in Lebanon) unless you use it
ostentatiously" he was being a bit unfair. There have certainly been
isolated incidents of unostentatious cell-phone use in the country. But the
fact remains that at any dinner out, the phones are usually tossed on the
table even before their owners are seated, and no one wants last year's
Nokia sitting next to his plate of foie gras.
The industry itself has been doing its part to keep the customer shopping.
Whether it is progress or planned obsolescence, the technology they are
coming out with now is sure to delight and amaze.
Some of these new features are useful - cameras, e-mail, etc. - while some
have little practical value like polyphonic ring tones that invariably
amuse the owner more than innocent bystanders.
For those who are not contented with the latest run-of-the-mill brand,
luxury cell phone company Vertu inflicted its wares upon the country last
year. A bottom-end Vertu will set you back 4,500 euros, whereas if you have
a spare 24,000 euros you can spring for the top-of-the-line platinum
device.
Of course, the ability to pay for the phone itself is contingent upon
whether one can afford to use it. Lebanon is near the top of the
list in terms of both cell-phone use per capita and cost of service. The
privilege of chatting for one minute costs an average of $.56
within the country, whereas the worldwide average is $.31 at peak times and
$.25 for off-peak.
Which raises another issue. Those of us who are
accustomed to being wooed with free night and weekend minutes, lower rates
at certain times of the day and minutes that roll over to the next month
won't find any of these alluring offers here.
The population is basically a captive audience for cellular providers.
Spending hundreds (or thousands) of dollars on the handset itself, on the
other hand, is optional. But with 799,999 other users to compete with, no
one wants to be technologically left behind.
Deadline for
cellular contracts may be extended (From The Daily Star, March 12, 2004)
- Telecommunications
Minister Jean-Louis Qordahi said on Wednesday that his ministry may extend
the deadline for obtaining the terms of cellular management contracts to
allow companies more time to submit offers.
Speaking to reporters,
the minister said that a decision on this matter would be made this
afternoon.
Companies had until
March 22 to obtain the tender documents and until March 29 to submit their
final offers. "We have received many requests to extend the
deadline," the minister said.
He added that 13
companies have so far obtained the tender documents, indicating that the
ministry is providing all necessary information to the bidding firms.
The Kuwaiti Mobile
Telecom Company was the last firm to obtain the tender document from the
ministry on Wednesday.
The minister said that
the current operators Cellis and LibanCell sent letters to his ministry
offering to extend the contracts until June of this year to give the
government more time to transfer those assets to the winning firms.
The contract with the
two companies is supposed to end in March, but many experts say that it
would be impossible to complete the transfer of assets of these firms to
other institutions.
The government scraped
the first auction and tender in January of this year after four companies
pulled out of the race on the grounds that the terms of the contracts were
incomprehensible.
Only LibanCell and
Investcom made serious offers to manage the networks, but the government
rejected these proposals, claiming that the two firms are locked in a legal
dispute with the Telecommunications Ministry.
The two companies
receive $15 million a month to manage the networks on behalf of the
government, but many ministers say that these fees are too high.
The government has
abandoned plans to privatize the telecommunications sector for the time
being, but Qordahi insists that selling the cellular licenses have been
temporarily shelved until a regulatory body is formed.
The minister, a strong
supporter of President Emile Lahoud, said that he and his team have been
holding extensive talks with representatives of the companies that may
participate in the tender.
"We are going
through every small detail with the companies so the outcry (public
offering) takes place in the right time," Qordahi said.
He added that some of
the companies interested in the bidding expressed readiness to manage the
networks once the deal with the government is signed while others preferred
at least a month to move into the offices of Cellis and LibanCell.
Qordahi said that he
will convey all the offers to the Cabinet before the end of this month to
make an appropriate decision.
He added that if the
prices offered by the companies were too low he would end the session
abruptly. The minister said that a Lebanese company also obtained the
tender document. "The Lebanese firm promised to bring a giant foreign
firm, but the name of this company will not be declared right now."
Meanwhile, a statement from the ministry said that the revenues from fixed
telephones fell slightly in 2003 due to the rise in demand for cellular
lines. "Lebanon
is not the only country in the world where fixed telephone revenues fell.
The mobile phones have taken over the race," one official said.
But the ministry added
that the fall in revenues from the fixed telephone is no cause of concern.
Hariri wary of
cellular network revenue calculation (From The Daily Star, February 24, 2004)
- Telecommunication
Minister Jean Louis Qordahi admitted on Monday that Prime Minister Rafik
Hariri has some reservations about the manner in which the
Telecommunication Ministry calculated the revenues of the cellular
networks.
"Hariri thinks
that the ministry has made mistakes in calculating the revenues of the
cellular networks. But our people have different views on this
matter," Qordahi told reporters.
According to the minister, Hariri believes that the ministry did not take
into account the $186 million payments to Cellis and LibanCell in return
for the investments the companies had made, after the government revoked
the contracts two years before their expiry.
But Qordahi defended the figures released by the ministry, adding that his
staff had proved to Hariri's personal envoy that all their reports were
accurate.
"We have spent about $40 million in 15 months to upgrade the cellular
networks," the minister said.
Hariri, according to sources, told Qordahi last week that the ministry
should double check some of their figures.
These sources claim that if Qordahi took into the account the $186 million,
the net value of the networks would be zero in 2006. They also estimate
that upgrading the networks will cost $40 million each year.
Qordahi said that since the government took over the networks from Cellis
and Libancell, the revenues had jumped from $22 million to $49 million.
He added that the $186 million that was paid by the ministry at 7.5 percent
interest is part of the government's debt servicing and thus should not be
viewed as a debt on the ministry.
But Hariri's supporters downplayed the importance of these figures, adding
that the ministry would have achieved the same revenues if the contracts
with the current operators remained till the middle of this year.
However, the minister said that even if the government collected 50 percent
share from the cellular companies, in addition to the taxes, the proceeds
from these networks will not exceed $35 million each month.
The minister also commented on the special parliamentary session next week
to grill the government over its alleged failure to run the mobile
networks.
Qordahi prepared a comprehensive statement which will demonstrate that the
telecom sector is in a better shape after the government took over the
networks.
The statement will include detailed information about the cellular networks
from 1993 until the present date.
Hariri is also expected to make a closing statement and many observers fear
that the prime minister may try to contradict Qordahi.
The minister expressed fear that any clear split in the government during
the parliamentary debate may have negative impact on the results of the
cellular tender.
"The debate on the telecom issue may have some impact on the tender
but the ministry will proceed with this process anyway," Qordahi said.
He added that the ministry will keep the media posted about developments.
"We will have a meeting with press every Monday until the tender is over
in March 22 of this year," the minister said.
He added that five
companies had so far acquired copies of the tender after paying $5,000 for
each document.
Two other firms are also expected to take up copies of the documents in the
next two days and several US
and European companies have expressed interest in participating in the
bidding.
The ministry posted ads in all major Lebanese, Arab and international
papers in an attempt to lure companies to participate in the bidding.
Interested parties can log on to the ministry web site at www.mpt.gov.lb to
obtain more information about the tender.
He added that the tender does not mean that the government has abandoned
plans to privatize the telecom sector.
Lebanon postpones planned
telecom privatization again (February 1, 2004)
(MENAFN) - The
Lebanese cabinet voted to postpone again the planned privatization of the
country's mobile telephone network, AFP reported.
On May 15, 2003,
seven companies - including Orange, France Telecom, and Greece's OTE - pre-qualified
for bidding. When the tender deadline closed, only bids from LibanCell and
Investcom remained standing.
In June 2001, the government cancelled the licenses under which LibanCell
and Cellis had operated since 1994 in order to hold a public tender on
re-awarding the licenses. Since then, the two companies have continued to
operate on temporary licenses.
Qordahi: LibanCell, Cellis
shouldn't bid (From
The DailyStar, January
22, 2004)
- On Friday, the Cabinet committee
headed by Deputy Prime Minister Issam Fares will review reports on the
auction and tender of cellular networks, amid growing indication that Lebanon
has dropped the idea of selling the telecommunications licenses to the
private sector.
Privatizing the telecommunications sector was part of a plan to raise
billions of dollars in 2003, to help reduce the $32 billion public debt.
But the Cabinet's decision last month to cancel the outcome of the auction
and tender is likely to discourage investors from taking part in any future
bidding.
Only LibanCell and Investcom made serious offers to manage the mobile phone
companies for three years; the remaining four firms pulled out from the
race for different reasons.
The most likely scenario is that new companies will bid only for the
management of the cellular networks, since the offers to buy 20-year GSM
licenses have been scrapped for good. Telecommunications experts believe
that the government is convinced that the cellular network is "Lebanon's
oil wealth" and it would be absurd to sell them at any price.
Telecommunications Minister Jean-Louis
Qordahi told the committee that it is more rewarding to keep the networks
until the time is ripe to sell them to the private sector. In his report,
Qordahi recommended speeding up the creation of the telecommunications
regulatory body which will name the board of directors for the two
companies. The regulatory body was mentioned in the telecommunications law
that was ratified by the Parliament in 2002. This body, according to the
telecommunications law, was supposed to organize the tender and auction of
the cellular companies instead of the Higher Privatization Council which is
under the direct influence of Prime Minister Rafik Hariri.
Qordhahi, who came under sharp criticism
for failing to handle the auction and tender process, stressed that the
Higher Privatization Council must take responsibility for the collapse of
the tender. He added that the whole idea of organizing an auction and
tender was wrong, claiming that Lebanon was the only country in
the world to come up with this concept.
The minister also asserted that the council did not respond to the queries
of the bidding companies, prompting many of them to withdraw with a bitter
taste in their mouths. He added that the council raised the bank guarantee
from $25 million for each company to $100 million. The council, according
to the minister, also made last minute changes to the terms of the
contracts that were drafted by international investment bank HSBC.
The council stipulated that any company interested in bidding must have a
minimum experience of five years in GSM networks and must also have a
minimum of 350,000 subscribers. One telecommunications expert says that
most of the Arab and international companies felt that the council was
trying to award the contracts to the existing operators by making
conditions impossible for anyone else to meet.
There were also objections to the participation of LibanCell and
Francetelecom, which are locked in a legal dispute with the government. The
former government of Salim Hoss ordered Cellis and LibanCell to pay $600
million for allegedly exceeding the number of cellular subscribers. But the
two companies rejected these allegations and referred the dispute to
international arbitrators in New York and Paris. Qordahi urged
the Cabinet not to allow the two current companies to take part in the
bidding because it will affect Lebanon's chances of winning
the international arbitration.
Former Telecommunications Minister Issam Naaman also favors the exclusion
of Cellis and LibanCell from the bidding process. He supported Qordahi's
suggestion to create a regulatory body which will name the board of
directors for the two companies that will run the networks on behalf of the
government.
Against this backdrop, the Cabinet may be forced to comply with the demands
of Qordahi to create the regulatory body as soon as possible in order to
restart the bidding process all over again. This means that the Higher
Privatization Council will be stripped of all its powers.
Cellis, LibanCell may score
extended contracts after disappointing telecom auction results (From dailtstar.com.lb, January 12, 2004)
- After the disa | 
