BEIRUT: The Cabinet Wednesday extended the contracts with mobile operators Alfa and touch until the end of June and authorized the telecommunications minister to prepare for a new tender.

Telecoms Minister Nicolas Sehnaoui will prepare all terms of the tender in a maximum of two months.

The terms of the new tender will be presented to the Cabinet for approval before the ministry issues it.

The bidding process will be open to international telecommunications firms in addition to the two existing mobile operators.

Sehnaoui is proposing to set the new contracts for five years and to eventually create a government-backed company to manage the telecoms sector.

The minister says any such company would float 3 percent of its shares on the Beirut bourse.

The operators are currently managing the cellular networks in return for a monthly fee and commissions.

The telecoms sector generates more than $1.6 billion in revenues each year, $1.4 billion of which goes to the treasury to reduce the budget deficit.

At present, there are more than 3 million cellular users in Lebanon.

But despite the growth in the number of cellular users, the quality of reception and calls are relatively poor.

The minister has awarded a contract to a Chinese company to install 300 additional antennas all over the country to improve reception and coverage.