France Telecom executive to meet with Lebanon's Hariri over GSM dispute

Published June 20th, 2001 - 02:00 GMT

A senior executive of France Telecom arrived in Beirut Tuesday, June 19, for talks with the Lebanese officials after Lebanon tore up GSM contracts last week with a local subsidiary of the French company and with another firm. 


Jean-Francois Pontal, managing director of France Telecom unit Orange, said the visit was a fact-finding mission, during which he planned to talk with the Lebanese about the cancelled contract of the company's local unit, Cellis. 


The statement said Pontal will meet with Lebanese Prime Minister Rafiq Hariri on Wednesday. 


The government's privatization committee said last Tuesday it had "decided to task the telecommunications minister with ending the contracts of these two companies from tomorrow (Wednesday)." 


Cellis and LibanCell, which has Finland's Sonera as a 14-percent stakeholder, are to be compensated, it said. The contracts will be completely void in mid-September. 


No reason was given for the decision, but a minister, speaking on condition of anonymity, said the government wanted to end a nagging dispute between the companies and the state over exploitation fees. 


The two companies were given the contracts to operate the GSM network in 1994. The agreements were to run for 12 years. 


Under the contracts' terms, the companies had to pay a license fee to the state and, from 1999 to 2004, also hand over around a quarter of their revenues. With a combined 700,000 subscribers, the two operators paid a total $300 million in license fees last year. 


But three years ago, Cellis and LibanCell started opposing government limits on the number of subscribers they could have and on how much money they had to pay the state for subsidiary GSM services not covered in the contracts. 


The companies offered to buy the licenses directly for $1.35 billion each, but the government refused. 


The minister said that the auction of the licenses, that would give the winning bidder a 20-year ownership, would be open to Cellis and LibanCell. ― (AFP, Beirut) 


© Agence France Presse 2001

© 2001 Mena Report (

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