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Harb seeks better deal for Lebanese on cellphone bills

A man works on his mobile as he walks in front the alfa company in Beirut, Tuesday, March 19, 2013. (The Daily Star/Mohammad Azakir)

BEIRUT: Telecommunications Minister Boutros Harb hopes to make state-owned cellphone networks more efficient by revising the contracts that outsource their management to the private sector, a source at the ministry said Friday.

“Harb is interested in modifying the contracts with Alfa and touch to reduce the cost of running the networks on behalf the state. He also wants the companies to pledge to improve the quality of services and end the constant interruptions of phone call conversations,” the source told The Daily Star.

Touch, which was previously known as MTC, has been operating in Lebanon since 2004, while Alfa entered the market in 2009. Both networks are owned by the government, but their management is contracted out to Zain Group and Orascom Telecom, respectively.

According to the existing outsourcing agreement, the government pays both companies a $7.5 million monthly fee to operate the networks, as well as a bonus for every client they attract.

Former Telecommunications Minister Nicolas Sehnaoui renewed the contracts with Alfa and touch for three months in December last year, in order to guarantee that cellular services in Lebanon would not be interrupted. His caretaker government did not have the power to launch a new tender.

The source at the ministry said the general managers at Alfa and touch were aware of Harb’s plans, which would have to be enacted before the contracts expire at the end of March.

“We have been in direct [contact] with the firms since Harb took office. We know that we can’t launch a tender at short notice, but ... we will endeavor to obtain the best conditions for the state,” the source said.

“Each firm generates between $15-16 million a month from the income and bonuses,” one telecoms expert told The Daily Star.

But the expert doubts that the companies will make any drastic changes to the contracts at such short notice.

“What can Harb do if the companies do not make major modifications to the contracts? He can’t replace them in one week,” he said.

Marwan Hayek, the general manager of Alfa, said the networks were negotiating with Harb and his team but declined to say if the contracts will be renewed.

“We are studying the terms [put in place] by the minister and we are fully cooperating with the ministry,” Hayek said.

Claude Bassil, touch’s general manager, was not available to comment on the contracts.

The source close to Harb said the minister would not rush the decision.

“Harb has only two months in office and he realizes that he can’t perform miracles in a short period. But he will do his best to improve the quality of services and reduce the cost of cellular calls. He is a lawyer and he intends to follow the law to the letter,” the source said.

The minister intends to hold a news conference next Wednesday to unveil his plans for the sector.

“Harb will try to persuade the president of the republic, prime minister and the ministers to reduce the cost of land line and cellular bills to relieve the citizens,” the source said, adding: “The cellular bills are 10 times higher than in France and this is unacceptable.”

However, observers are skeptical that the Cabinet will agree to reduce the phone bills dramatically, as they generate more than $1 billion for the Treasury each year.

Sources said that Harb plans to increase the speed of the Internet in Lebanon, which is among the slowest in the world.

 
A version of this article appeared in the print edition of The Daily Star on March 22, 2014, on page 4.

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Summary

Telecommunications Minister Boutros Harb hopes to make state-owned cellphone networks more efficient by revising the contracts that outsource their management to the private sector, a source at the ministry said Friday.

Former Telecommunications Minister Nicolas Sehnaoui renewed the contracts with Alfa and touch for three months in December last year, in order to guarantee that cellular services in Lebanon would not be interrupted.

The source at the ministry said the general managers at Alfa and touch were aware of Harb's plans, which would have to be enacted before the contracts expire at the end of March.

Marwan Hayek, the general manager of Alfa, said the networks were negotiating with Harb and his team but declined to say if the contracts will be renewed.

The source close to Harb said the minister would not rush the decision.


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