Telecom privatisation goes to bid at last

12 September 2003
The tender for the privatisation of the state's cellular networks was issued in early September after the cabinet approved the final regulations. Prequalifiers have been given 45 days to submit their proposals to the Higher Council for Privatisation for the auction and tender of the two existing GSM operators, Libancelland Cellis. In the event that the sale does not receive a satisfactory response, the cabinet has approved the creation of two new companies to run the networks.

Prequalifiers have been offered one of three bid options: bid for the outright licences, for a three-year management-only licence or for the compromise, a 20-year licence and a clause guaranteeing that 40 per cent of the revenues are paid directly to the government.

Seven local and international companies are prequalified to bid. They are Libancell, Luxembourg's Investcom Holding, France's Orange, Greece's OTE, and WataniyaTelecomand Mobile Telecommunications Company, both of Kuwait. A seventh prequalifier, Germany's Detecon, is prequalified to bid for only the operating licence. The committee is looking to disclose the offers of the six companies before the end of the year.

Given the depressed state of the global telecommunications industry, privatising the management is becoming a strong possibility. The government will use the proceeds from the privatisation or securitisation of the cellular networks to reduce the state's $32,000 million foreign debt.

The government may be compelled to securitise the revenues of the cellular firms if privatisation fails. Securitisation of cellular revenues could generate more than $5,000 million. If the securitisation route is taken, the government is expected to securitise 40 per cent of its telecom receipts for the next 20 years.

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