Lebanese mobile saga continues
Bids for Lebanon's mobile networks are due in by the middle of November, but the government may still decide not to sell them.
Lebanon's government is expecting bids for its two mobile networks by the middle of November, according to Jean-Louis Qordahi, Minister of Communications. Qordahi says that depending on how much the bidders offer, the government will then decide what to do with the networks.
"If we have the proper price in the auction, we will sell," said Qordahi, without revealing what proper might mean. "If we don't have the proper price or if the price is below our expectation, we will get an operator to manage the businesses."
Should the government retain ownership of the networks, it may borrow against their future income, a process known as securitisation. "We have two mobile businesses, giving a net income to the government of Lebanon of about $600 million a year," says Qordahi. "The government of Lebanon will definitely look at securitisation to cover its financial needs if it doesn't sell."
Lebanon's government took control of the mobile sector when it unilaterally cancelled the licenses of the two operators, Cellis and LibanCell, around two years ago. Since then, the operators have been paid to run the networks on the government's behalf.
A deadline of July was originally set for completion of the tender and two of the companies qualified to bid have expressed surprise at the new delays in the process.
"We are highly interested in Lebanon, we are extremely disappointed by the slow pace that things have been moving and we are also concerned by internal political rifts that have taken their toll on this whole endeavour," says Saad Al Barrak, director general, MTC. "However, it's a very important market for us and we'd like to be there."
David Murray, managing director of Wataniya Telecom, sees a mismatch between expectation and reality. "I think there's a question between the political/economic expectation and the real world economic value," says Murray. "Today's valuations are not what they were three years ago.
The bidding companies have to submit offers for all three of the published options: a full license, revenue sharing or a management contract. MTC's Al Barrak says that "We are definitely not interested in the management contract."