France Telecom protests Lebanon's decision to cancel contract

Published June 27th, 2001 - 02:00 GMT

A senior executive of France Telecom Tuesday, June 26, protested a decision by the Lebanese government to cancel its mobile telephone contract with France Telecom unit Cellis, a government official said. 


In a letter to Lebanese Prime Minister Rafiq Hariri, Jean-Francois Pontal, the number two at the French telecommunications giant, said France Telecom "disagreed" with the June 14 decision. 


Pontal, who is also managing director of France Telecom unit Orange, expressed surprise that the government had not consulted with the company before canceling the contract with Cellis.  


Cellis and LibanCell, in which Finland's Sonera is a 15-percent shareholder, were awarded the 10-year build-own-transfer contracts in 1994. After both contracts were cancelled, the government promised to compensate the companies and to allow them to bid for new deals. 


According to the Pontal letter cited by the official Tuesday, a contract clause permitting the government to cancel the contract had already expired when the decision was taken, and that the company is considering legal action. Meanwhile, Pontal said Cellis is negotiating with the World Bank's International Finance Corp. the terms for an accelerated repayment of the 43 million dollars outstanding on a $100 million syndicated loan to it in 1994. 


Pontal said the company must reimburse the loan within 180 days after the management contract ends. In a letter to the IFC, a copy of which was obtained by AFP, Lebanese Finance Minister Fouad Siniora said that Cellis and LibanCell would continue to manage their respective networks until the new contracts are awarded. — (AFP) 


© Agence France Presse 

© 2001 Mena Report (

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