BEIRUT: The Telecommunications Ministry Tuesday renewed the contracts of Lebanon’s two mobile operators, touch and Alfa, for three months to give the Cabinet time to launch a new tender. Egypt’s Orascom Telecom Media and Technology Holding and Kuwait’s Zein have had their management contract for Alfa and touch respectively extended until the end of September, according to telecoms sources familiar with matter.
The terms of the extension remain the same as for the current contract signed between the companies and the Telecommunications Ministry.
“Caretaker Telecom Minister Nicolas Sehnaoui has the right to extend the contracts of the two companies even if the Cabinet has resigned. Since this sector is vital for the Lebanese, the minister can extend the contracts for a brief time in order not to disrupt the mobile phone services,” Riad Bahsoun, a telecoms expert, told The Daily Star.
But Bahsoun questioned the reason for Sehnaoui refraining to launch a new tender while the Cabinet had still active: “Why does the minister request renewal of the contracts just days before their expiry?”
“The minister should ask for a tender two or three months before the end of the contracts,” he added.
Orascom said in a statement that despite the contract’s short duration, it remained committed to playing a role in the development of the mobile sector in Lebanon.
It added that it would continue to cooperate with the Telecommunications Ministry and would pursue Alfa’s growth policy, which is a strategic sector for economic progress in Lebanon.
Bahsoun expected the contracts with touch and Alfa to be extended automatically if a new Cabinet was not formed soon.
“I am sure a new Cabinet will call for a new tender because we can’t keep extending the contracts with the mobile operators forever,” he argued.
The current companies operate the networks on behalf of the government in return for a monthly fee.
This is the third time the contract has been extended, following a similar move in January and February.
There are close to 4 million cellular subscribers at present and this number grew after more than half a million Syrians fled to Lebanon to escape fighting in their country.
The telecoms sources said most of the Syrian refugees were using prepaid cellular cards and that this had boosted the revenues of the Treasury.
“In 2012, the investment made in the mobile sector in Lebanon reached $680 million. The two companies have added more stations for the 3-G systems,” Bahsoun said.
The telecoms sector is the second-largest money generator for the Treasury after the value added tax.
Revenues generated from the telecoms industry total more than $1.4 billion each year, excluding the money netted by both companies.