LibanCell, one of the two authorized cellular phone network operators in Lebanon, in which Finnish telecoms company Sonera has an 11 percent stake, withdrew a $1.35 billion offer it had made to the government earlier this year to replace its BOT contract with a 20-year license.
The company's chairman attributed the move to the falling values of mobile phone stocks, which in turn no longer justifies the amount offered by LibanCell. Last week, rival cellular network operator Cellis, part of France Telecom, withdrew a similar offer of $1.35 billion.
The previous administration of Salim Hoss had rejected the offers as insufficient and the Auditing Department reported that the two operators owe the state around $1.06 billion in back-payment charges and fines for contract violations, $687 million owed by Cellis and $71.2 million owed by LibanCell.
Proceeds from cellular license sales are generally viewed as essential in helping the government redress the imbalance in its finances. Credit rating agency S&P cited failure to secure revenue from cellular license sales as one of the reasons behind its downgrade of Lebanon's rating to B+ from BB-.
One possible avenue open to the government should it wish to try to obtain $1.35 billion from each operator might be an extension of the license period from the previously proposed 20 years. — ( Banque du Liban et d'Outre-Mer Sal )
© 2000 Mena Report (www.menareport.com)