Both contracts include plans for significant growth in customer numbers and could be extended for a further year.

Zain operates its network under the MTC Touch brand, while Orascom operates the Alfa network.

The Alfa network had previously been run by a joint venture of Deutsche Telekom and Saudi Arabia's Fal Holdings. However, in November 2008 the government forced the group to abandon its contract after criticising the quality of its services (MEED 28:11:08).

Orascom is required to increase the number of subscribers to Alfa from around 600,000 at the moment to 1 million by the end of 2009. Zain says it plans to boost customer numbers for its network by 400,000 as part of a government-funded expansion plan, adding to the existing 800,000 active users.

Both companies say they could pursue longer-term contracts.

Saad Al Barrak, chief executive officer of Zain, says the company remains hopeful of securing a long-term licence to operate in Lebanon.

Naguib Sawiris, Orascom Telecom chairman and CEO, says "We believe that our entry to the Lebanese market through this management contract could pave the way for further investments in telecommunications by [Orascom] in Lebanon at a later stage."

Beirut ultimately wants to privatise the two networks, but plans to sell them have been repeatedly delayed by political instability in the country.