Lebanon to Decide on Sale of Mobile Phone Companies by Year-End 2010
January 29, 2010, 07:03 AM EST
By Massoud A. Derhally
Jan. 29 (Bloomberg) — Lebanon will decide by the end of the year how to sell two mobile phone operators, which previous governments had hoped would raise as much as $7 billion.
“It’s complicated,” Minister of Telecommunications Charbel Nahas said in an interview at his office in Beirut. “We will decide the pattern or forms of private investment in the telecommunications industry by the end of the year.”
Plans to sell the mobile phone companies were put on hold because of an 18-month political crisis that eased in May 2008 and later by the global credit crisis and parliamentary elections in June of last year. Lebanon’s public debt reached $50.5 billion at the end of November, or 153 percent of gross domestic product.
“The process of bringing in investors has different techniques and it can be an IPO or a mix that includes a strategic partner,” Nahas said.
Former Minister of Telecommunications Marwan Hamadeh said in a January 2008 interview that the government would retain a third of the shares in the two companies, MTC Touch and Alfa.
Saudi Telecom Co., Emirates Telecom Corp., Qatar Telecom QSC, Kuwait’s Zain, Bahrain Telecom Co. and Orascom Telecom Holding SAE have all expressed an interest, Hamadeh said at the time.
Cost of Business
“Liberalizing the telecom sector, introducing competition and attracting private investors are essential not only to improve public finances, but more importantly to increase the competitiveness of the economy and reduce the cost of doing business,” said Nassib Ghobril, head of research at Byblos Bank SAL.
The government receives between $1 billion and $1.2 billion a year in revenue from the two operators, which is about 4 percent of GDP, Nahas said.
Lebanon has about 2.5 million mobile phone subscribers and is investing about $160 million this year in the industry’s infrastructure, Nahas said.
“Lebanon should sell the two networks along with the licenses for up to 25 years with predefined conditions on revenue sharing and taxation as this is what investors require,” said Jawad Abassi, founder and general manager of Arab Advisors Group.
–Editors: Philip Sanders, Ben Holland
To contact the reporter on this story: Massoud A. Derhally in Beirut, Lebanon at +9617-116-8620 or email@example.com
Source Bloomberg: Bloomberg Business Week