Telecom operator protests at Lebanon move to set new license auction

Published June 17th, 2001 - 02:00 GMT

France Telecom's subsidiary in Lebanon protested Thursday, June 14, at the Lebanese government's decision to tear up the contracts of the two GSM operators in the country halfway through in order to auction off its lucrative cell phone licensees. 


In a statement France Telecom Mobile Liban, which is 67 percent owned by the French government and operates the mobile phone company Cellis, said there had been no agreement or negotiation with the Lebanese government on the matter. 


It also said the legislation under which the government had acted had been annulled under an accord signed with both companies in 1997. 


The government's privatization committee said in a statement Tuesday it "has 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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