Tunisiana, the country’s largest mobile phone operator, may soon have a change of owner as the legal dispute between its two shareholders approaches a showdown in the International Court of Arbitration, in Paris.

Egypt’s Orascom Telecom and Kuwait’s Wataniya are battling for control of the company they founded in 2002.

The case began on 4 April 2006, when Orascom filed a request for arbitration. A decision is due within weeks, but whichever firm wins, it will find the market far more competitive in the coming years.

The two firms established Tunisiana with equal stakes at a time when both lacked the capital resources they have today. The venture has been successful and is catching up with its only rival, state-owned operator Tunisie Telecom, as the country’s largest mobile operator.

At the end of June, it had 3.2 million active mobile customers, compared with a 4.1 million at Tunisie Telecom.

The state-owned operator does not publish its financial results and its profitability is unknown, but Tunisiana generated revenues of KD 74.6 million ($269 million) and net profits of KD 11.4 million ($41 million) in the first

half of 2007.

In October, Tunisiana appointed Yves Gauthier as its first chief executive officer (CEO) with sole responsibility for the company. Gauthier was previously CEO of Orange in

the Netherlands.

Before his appointment, Tunisiana had been run by joint CEOs, one appointed by Orascom and one by Wataniya.

Gauthier’s appointment comes at a time of increased competition from Tunisie Telecom.

In July 2006, the UAE’s Tecom bought a 35 per cent stake in Tunisie Telecom for $2,250 million, with the government retaining the remaining 65 per cent.

Since then, Tunisie Telecom has become much more aggressive in its marketing.

In September, a successful promotional campaign led to Tunisie Telecom’s network being overloaded. Slaheddine Maaref, director of corporate strategy at Tunisie Telecom, confirms that customers were unable to make calls but says the network was not at fault.

Both operators will have to improve the resilience of their networks if the Tunisian telecoms regulator goes ahead with plans to licence a third mobile operator.

Ali Ghodbani, president of the regulator, Instance Nationale de Telecommunication (INT), says he wants to hold an auction for

a third operator, but it will be several years before any new rival to Tunisie Telecom and Tunisiana emerges.

‘I do not think the third operator will come before 2009 or 2010,’ he says. ‘By then, it will be difficult for a third operator, but there is some room.’