Lebanon dismisses tender results over unfair competition concerns

The tender to find managing companies for Lebanon’s state-owned operators has been deemed unsuccessful by the country’s government.

Orange and Zain were the only 2 firms to participate in the tender. Since the Lebanese government was aiming to attract at least 3 companies, it has rejected the result on the grounds that it would create unfair competition in the market.

Lebanon has only 2 operators according to GSMA Intelligence: Touch, which is managed by Zain and leads the market with 52%; and Alfa, which is managed by Orascom and takes the remaining 48% of the market.

The strict terms for the tendering process set by regulator Boutros Harb were reportedly enough to deter Egyptian group Orascom from lodging a bid. The operator has denied claims by the Lebanese telecom ministry that it missed the July deadline for participating.

Now that the new results have been rejected, the ministry is likely to renew the existing agreements with Orascom and Zain rather than allow the state direct control over the operators. A second tender round is scheduled, and if conditions are relaxed then more international firms – including Orascom – may participate.

The country’s Daily Star newspaper quoted a source as saying “I think the election of a president of the republic and the formation of a new cabinet would encourage more international firms to bid for the next tender round. But I don’t think that will happen very soon.”

The conditions of the tender process were not in fact agreed upon by the cabinet - a fact which caused 5 ministers to object to them. However, it is unlikely that new terms will be discussed in the near future.

Political strife in Lebanon has prevented the telecoms ministry from tendering 3-5 year licences until earlier this year. At the start of the process, several international firms expressed an interest, including Deutsche Telekom, Maxis, Orange, Turkcell, Vodafone and Zain.

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