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Lebanon Telecom News
Market turmoil delays Lebanon telecom sale (November 1, 2008)
Beirut: The sale of two state-owned Lebanese mobile
phone firms might be held up because of the global financial crisis and
economic downturn, the head of Lebanon's privatization council
said.
Ziad Hayek said a delay in the long-planned sale
would allow time for parliament to issue a new law demanded by some
politicians to allow the privatization to go ahead.
"The financial markets and stock markets are
not in a fit state to complete this operation at present," he said in
an interview, a copy of which was released by his office on Friday.
"They will not allow us to obtain the amount
we had hoped for from the privatization," he said in the interview
with Al Masira magazine.
Hayek has previously declined to say how much the
sale is expected to yield for the government. The proceeds will be used to
pay off some of a public debt mountain of $44.5 billion (Dh163.5 billion) -
equal to around 170 per cent of gross domestic product.
Under existing plans, the sale of majority stakes
in both firms will be followed by an IPO offering a remaining third of each
company. International donors have linked plans to speed up the dispersal
of funds pledged to Lebanon
to the execution of reforms including privatization.
The sale had initially been planned for February
but was delayed because of a political conflict that paralyzed government
and pushed the country to the brink of civil war.
The conflict was resolved in May by a Qatari-mediated
deal which led to the formation of a national unity government.
New legislation
Hayek said Telecommunications Minister Gebran Bassil, who took
office in the new cabinet in July, supported Parliament Speaker Nabih Berri's idea of the
need for new legislation before the privatization could go ahead.
A Justice Ministry commission had previously
ruled that no new legislation was required, Hayek said. The new law would
most likely be passed next year, he added.
Bassil for Lebanese telecom
privatization - at right price (From The Daily Star, July 15,
2008)
BEIRUT - Newly appointed Telecommunications Minister Jebran Bassil said on Monday
that he supported the privatization of the cellular networks at the right
price. "I don't think any of the politicians in Lebanon are
against the privatization of the telecom. But any privatization should be
done in a transparent manner and ensure a good income for the
treasury," Bassil said following a handover
ceremony at the ministry.
Bassil, from the Free Patriotic Movement, stressed that
the party he represents strongly favors free economy and liberalization of
all economic sectors.
Outgoing Telecommunication Minister Marwan Hamadeh was supposed
to have privatized Lebanon's
two cellular networks in 2007.
But the long-running political dispute between
March 14 forces and the opposition and the security incidents delayed the
auction of the cellular lines.
Privatization of the telecom sector is a key
element of the
Paris III donor conference paper and some rating agencies
expressed fear that the opposition in the Cabinet may bloc the sale of the
sector this year.
"The most important things about any
privatization are that it guarantee handsome
revenue for the state and above all excellent service to the citizen,"
Bassil said.
Hamadeh had earlier said that Lebanon can fetch up to $6
billion from the privatization of the telecom, adding that all the proceeds
would be used to reduce the $43.2 billion public debt.
etisalat considers bid for Lebanese
telecom firm (From
The Gulf News, December 24, 2007)
Dubai - Emirates Telecommunications Corp (etisalat) said on Monday it was considering a bid to
take over one of two Lebanese mobile phone firms that the government has
said it wants to sell for as much as $7 billion.
etisalat would decide on whether to compete for Alfa or
MTC Touch by the end of next month, Jamal Al Jarwan,
chief executive of etisalat International
Investments, said.
"We will decide by the end of January
whether to bid, after completing our study of the market and valuations of
the companies," Jarwan said. "Right
now, we are studying the market, looking at what the business drivers are
and what the growth prospects are," he said.
Lebanon expects to sell majority stakes in two state
mobile phone firms in February and offer the rest to the public to raise as
much as $7 billion, the country's telecommunications minister said in
October.
The country planned to use the funds to service
huge public debts of about $41 billion, or 180 per cent of gross domestic
product, Marwan Hamadeh
said at the time.
Lebanon's population of about four million pay among the
most expensive mobile phone charges in the Middle East,
with average revenue per user of above $50 a month, Jarwan
said.
Mobile phone penetration in the country was about
28 per cent, Hamadeh said in October.
"It is always appealing to buy existing
assets which have a subscriber base," Jarwan
said.
etisalat, which has operations in 16 countries including Egypt, Saudi
Arabia and Pakistan, has been expanding
outside of its home market, where mobile phone penetration exceeds 150 per
cent.
It lost a telecom monopoly in the UAE this year
after du started a mobile network in February.
The state-controlled telecom operator said
earlier this month it would buy 16 per cent of PT Excelcomindo
Pratama Tbk for $438
million to enter Indonesia,
the world's fourth most populous country.
In the last month, it has lost bids to enter
mobile phone markets in Kuwait
and Qatar.
etisalat led a group in
2006 that paid 16.7 billion Egyptian pounds ($3.1 billion) for the third
mobile phone license in the country.
"We will not be value destructive. We will
only bid what we believe the asset is worth," Jarwan
said.
Approval
Any telecom bids would have to get final approval
from the country's new president, the telecommunications minister has said.
The Western-backed government and pro-Syrian
opposition have agreed on army chief General Michel Sulaiman
as president, but the opposition wants guarantees it will have veto power
in a future coalition.
Lebanon's Western-backed ruling coalition and the
pro-Syria Hezbollah-led opposition have been locked in a dispute over
sharing power.
Report: Zain eyes bid
for Lebanon
telecom firm(October 28, 2007)
KUWAIT (Reuters) - Kuwait's Mobile
Telecommunications Co. (Zain) is planning to bid
for a majority stake in a Lebanese mobile phone operator, al-Rai newspaper reported, citing Zain's
chief executive officer.
Lebanon is considering
selling majority stakes in its two state mobile firms in February to raise
as much as $7 billion, the telecommunications minister said this month.
Zain would bid for
one of the firms, the company's chief executive, Saad
al-Barrak said in a statement to al-Rai.
"The price is bigger than the value
of both companies," he said, of the $7 billion figure.
Zain, the second
largest Arab telecom company by market value, is expanding abroad as
competition intensifies in Kuwait, where the government is setting up a
third operator in a country that already has more mobile phones than
people.
The mobile penetration rate in Lebanon
is around 28 percent, Telecommunications Minister Marwan
Hamadeh told Reuters on Oct 11.
Lebanon also plans to
offer shares in the two state operators, Alfa and MTC Touch, to the
p3ublic, he said.
Lebanon's telecom strategy is
shortsighted (July
5, 2006)
Beirut - The Lebanese
government has been so blinded in its dependence on the telecom revenue
that it forgot the big picture...which is the importance of the IT sector
in driving the economy.
According to local newspaper reports,
expensive Internet connection costs and low levels of technical progress
resulting from the government's telecom monopoly are deterring foreign
investment in Lebanon.
InfoPro Research pays
$1000 per month for a leased line, said general manager, Imad Bashour, who said the
government must reduce rates to regionally comparable levels and increase
bandwidth capacity in order to attract the private sector to Lebanon.
"When investors come here and want
to set up a business they look at the IT infrastructure and they see it is
overpriced, and there are time limitations and volume limitations. To pay
$1000 per month for a leased line is ridiculous,
in Dubai
they pay, what, $50?" Bashour said.
According to Zuheir
Berro, head of a consumer advocacy group, the
internet sector in Lebanon
has grown by only 2 % in six years , while in
other Arab countries the growth averaged 50 %. This is a ridiculously low
growth rate for a country that was the leader in internet penetration in
the 90's.
The Telecom Ministry has been very slow
in introducing the digital DSL network. According to the most recent
reports the DSL will be operational in September. Minister Marwan Hamade should make
sure that this deadline is met.
Although internet tarifs
have been reduced.... but so far this has been too little too late.
Berro said that he
met with Hamade in June and asked him to speed up
the progress of telecom privatization, accelerate rate reductions, and
"put these problems out of political conflict." Hamade agreed that privatization is imperative, but
said the process is more difficult than it would seem since 38 percent of
the state's budget comes from telecom revenues.
According to reports only $40 million
(out of the 38 % ) comes from Internet revenues.
This is a ridiculously small amount of money for the government to depend
on and it clearly displays how shortsighted governments can be when they
mix business with politics.
In this day and age Internet is the
most important factor in driving modern economies. It is about time the
government realizes this important fact if it wants foreign investors to
come to Lebanon.
Time to look at the big picture, otherwise Lebanon
will forever miss the boat of progress.
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