The Lebanese Telecoms Ministry has called off its mobile contract tender, which only attracted two bidders for the country’s two state-owned telecom operators, Alfa and Touch.
The Lebanese telecoms ministry has called off the tender of the country’s two state-owned telecom operators, Alfa and Touch, since only two bidders participated.
“The process has stopped now, and a new one will have to take place. We need four or five bidders to make it competitive,” said a source familiar. Six companies had qualified to bid in August.
It is understood that telecoms minister Boutros Garb has met to discuss the matter with Prime Minister Tammam Saeb Salam, and that the two will make a decision on how to proceed in the New Year.
The Egyptian group had been excluded from the original process, which had been due to take place in September, having missed the deadline. It argued that the deadline had been unclear, and successfully petitioned the Shura Council to postpone the tender until November.
French incumbent Orange (EPA:ORA) and Kuwait’s Zain (KW:ZAIN) went ahead with their offers, but OTMT (LSE:OTMT) did not, citing overly difficult conditions.
A spokesperson for Zain said the company had intended to bid, and that its management had been present in Beirut.
“Our intentions are clear in that we intend to remain managing and further enhancing the mobile network, and we look forward to full or partial privatisation of the sector in the future.”
He added: Zain has been managing [Touch] since 2004, working closely with the Telecom Ministry. Touch today offers 4G services and has a 53% market share, serving over 2.2 million customers.”
A spokesperson for OTMT said: “We “intentionally” did not bid because we didn’t meet the pre-qualification criteria of having 10 million subscribers. The RFP would have been cancelled with or without us since it only attracted two bidders, whereas they need at least 3 bidders to ensure competition.”
Orange did not respond to a request for confirmation of its intention to bid.
When the tender process was first announced, an industry source noted that given the country’s political stalemate, there was a 50:50 chance that the cabinet would approve the result of the tender.
The telecoms ministry first brought up the possibility of opening up the tender process in 2013, having in the past renewed the contracts on a near annual basis.
Lebanon’s two-player telecoms sector has in the past been criticised as home to the world’s highest mobile tariffs, and for being corrupt and slow to implement upgrades such as 3G.
