Cash-strapped Lebanon auctions two cellular networks
The Lebanese government decided to put the country’s two cellular networks up for sale, through an international public tender. The contracts of the current operators—Cellis and LibanCell—were revoked in mid-2001, although their 10-year Build-Operate-Transfer (BOT) contracts were to expire only in 2004.
Rafiq Hariri’s cash-strapped government, intent on privatizing the telecommunication sector, has not yet concluded what it will do should the auction fail to attract suitable bidders by August 31, it is however expected that the sector would be handed over to state management.
The auction, issued by Lebanon’s privatization council, will offer 20-year operator licenses of the global system for mobile (GSM) networks and management contracts for a maximum period of 10 years. Potential investors may express interest in the offers by August 9.
Cellis, 65 percent owned by France Telecom's, and LibanCell, 14 percent owned by Finland’s Sonera, were accused by the government of having passed the limit of 250,000 clients set by their contracts.
The cellular companies offered the government $1.35 billion each to convert their existing contracts into formal 20-year licenses, but were turned down. Both companies may still submit biddings for the new GSM licenses.
The government claimed the original contracts had a limit of 250,000 subscribers per operator, and accused the firms of operating a total of 800,000 lines. The companies were thus presented with the demand to pay $300 million each to increase their subscriber limit. — (menareport.com)
© 2002 Mena Report (www.menareport.com)
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