Lebanon's telecoms giants await ministry decision on tender

Lebanon's telecoms giants await ministry decision on tender
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Published December 8th, 2015 - 10:48 GMT via SyndiGate.info

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The telecom minsitry's decision is likely to be contested regardless of the outcome. (BusinessNews.lb)
The telecom minsitry's decision is likely to be contested regardless of the outcome. (BusinessNews.lb)

Tuesday’s deadline to disclose the results of the tender to operate the country’s two cellular networks is not expected to go smoothly and could prompt the Telecommunication Ministry to either renew the contracts with the existing firms or decide to allow the state to run the firms.

The decision of Cairo-based Orascom, which operates Alfa, to refrain from submitting an offer may be used as an excuse by some ministers at the Cabinet to reject the results of the tender on the grounds that the conditions of this licensing round did not comply with the earlier Cabinet book of conditions.

The Tender Office of the Prime Minister, according to the law, will submit the results of the tender to the Cabinet, which is supposed to discuss and approve it.

But sources said that five ministers will most likely reject the results of the tender because the conditions to enter the race were altered by the Telecommunications Ministry.

They added that the Telecommunication Ministry modified one of the conditions to enter the tender.

One of the altered terms involved raising the number of years of experience required of each telecom firm from five to 10. Some believe that the conditions were modified to suit telecom firms Orange and Zain.

But in case the Cabinet failed to convene before the end of December, the ministry may either opt to renew the contract with the existing firms for three to six months or run the networks by itself.

Observers believe the chances of another Cabinet session this month are very slim if not impossible due to the preoccupation of all political parties with the presidential election.

In October, the Tender Office declined to disclose the names of the telecom firms that were supposed to operate Lebanon’s cellular networks, after the Shura Council ordered the inclusion of Cairo-based Orascom in the bidding process.

The Shura Council said that the earlier decision of the Tender Office to disqualify Orascom from the tender on the grounds that it missed the deadline for the acceptance of the application was not legal.

Sources told The Daily Star at that time that only two telecom firms, Paris-based Orange and Kuwait-based Zain, had officially applied for the tender. They added that the law clearly stipulates that at least three companies should make offers in the tender.

The Tender Office did not issue any statement to explain why the new tenders’ announcement was called off.

Alfa charged a steady monthly fee of $300,000 to manage the network in Lebanon.

This fee covered the salaries and expenses of Orascom management while the government paid the salaries of the staff.

All the revenues collected by touch and Alfa go to the government.

Copyright © 2015, The Daily Star. All rights reserved.

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