YOU ARE AT:Archived ArticlesLebanon could allow cellular companies to fulfill contracts

Lebanon could allow cellular companies to fulfill contracts

LONDON—The Lebanese government announced it might allow mobile-phone companies Cellis and LibanCell to operate until their contracts expire in 2004, providing that other offers for new licenses are “not up to par.”

The government is currently waiting for KPMG to complete its valuation of the current mobile operators before deciding on its next move, a senior official revealed. The government will not invite companies for a tender until KPMG completes its work. KPMG was commissioned by the government to assess the true value of the cellular companies’ assets and equipment.

Under the current agreement, the government is obliged to compensate mobile operators if their contracts are revoked before the expiration date. The contracts of both companies were revoked in June when the operators were given a minimum of 180 days to hand over the equipment to the Telecommunications Ministry.

Revoking the contracts of the cellular firms was designed to speed up the issuance of licenses. However, last year, the government rejected a US$2.7 billion license offer from both firms, claiming the operators had exceeded the allotted number of subscribers. Both Cellis and LibanCell were asked to pay US$600 million for violating the contract, but the firms rejected the ruling and referred the case to international arbitrators.

KPMG is due to conclude its findings in April or May, however, officials say the government does not wish to just sell the licenses at any price.

ABOUT AUTHOR