The Lebanese government is thought to be planning to delay the privatisation of its two GSM networks - again. The sale of the two networks is expected to commence this month, but a report by the Middle East Business Intelligence says that the two companies managing the networks on behalf of the government have just had their concessions extended until the end of this year.
Lebanon has two operators which were originally set up under a 10-year Build-Operate-Transfer (BOT) agreement, but back in June 2001, the government controversially cancelled the BOT licenses held by LibanCell and Cellis which were not due to expire until 2004. The government then invited bidders to manage the networks on its behalf, and the concession was eventually awarded to Zain and Alfa.
A plan to sell the networks for around US$3 billion each has been on and off for over a year.
The business news publication reported that the political impasse in the country is responsible for the delay. "The regulator cannot do anything without parliamentary approval and a new president," said an industry source. "The government does not have the political backing to privatise the networks."
Opponents of the privatisation claim that the sale would deprive the government of US$1 billion per year in revenues from the networks - while supporters note the high tariffs charged to customers and lack of competition in the market is holding back the overall economy. The sale is expected to be for two-thirds of the networks, with one third retained by the government, which will then be floated on the Beirut Stock Exchange.
The two operators have roughly equal market shares as they are tightly regulated by the government. The Mobile World notes that the two operators have some 1.2 million customers between them, representing a population penetration level of 30%.
On the web: Mobile World - Middle East Business Intelligence
Posted to the site on 3rd May 2008
Posted to: www.cellular-news.com/story/30934.php