Lebanon renews mobile firms’ contracts

File - Mtc touch headquarters is seen in Beirut, Tuesday, June 28, 2011. (The Daily Star/Mahmoud Kheir)

BEIRUT: Lebanon has renewed the contracts with mobile operators touch and Alfa for another three months amid indications that these firms will continue to run the networks as long as the caretaker Cabinet remains in office.

“We have renewed the contracts with the Telecommunications Ministry. We will operate under the terms of the old contract,” General Manager of touch Claude Bassil told The Daily Star Thursday.

General Manager of Alfa Marwan Hayek also confirmed the renewal of the contract, saying the firm would continue to expand its services and networks based on the previous contract signed with the Telecommunications Ministry.

Under the terms of these contracts, touch and Alfa operate the mobile networks on behalf of the state.

All of the revenue collected by the companies then goes to the treasury, while they retain fixed monthly payments.

Both Bassil and Hayek said the number of mobile subscribers in Lebanon was close to 4 million.

Touch has 2.1 million subscribers while Alfa has 1.8 million.

“Our penetration in Lebanon is quite high, and we were able to achieve this goal in only a few years. We will respect the terms of the contracts with the ministry,” Bassil said.

The number of Lebanese mobile subscribers has reached 92 percent of the population, one of the highest penetration rates in the region.

Bassil stressed the ministry was the only body authorized to approve new investment budgets for the two mobile operators.

Bassil and Hayek declined to say how much money they had allocated to the Telecommunications Ministry in 2013.

But they both added that the increase in the number of subscribers and services had boosted the revenues to the state to some extent.

“The expansions and rollout will continue this year. We introduced the 4G last year and intend to expand the coverage of this service to some areas in Lebanon,” Hayek said.

The Finance Ministry said allocations from the telecoms sector had fallen by 15 percent in recent months.

Caretaker Telecommunications Minister Nicolas Sehnaoui said earlier that his ministry had allocated more funds for investments, and for this reason the money sent to the Finance Ministry dropped in 2013.

Telecoms revenue is the third-largest source of income for the cash-strapped treasury after customs and VAT. Net telecoms revenue usually ranges between $1.2 and $1.4 billion a year.

There is no indication in the foreseeable future that any new Cabinet will embark on the privatization of the mobile sector.

Experts believe politicians have dropped the idea of selling the rights to the telecoms industry to the private sector because they want the revenues to go to the treasury.

A version of this article appeared in the print edition of The Daily Star on January 03, 2014, on page 5.




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