Deja vu was strong in another telecommunications matter last month, that of the old disputes between the previous operators and the Lebanese government.
First, the LibanCell company, former operator of one of Lebanon’s mobile communications network under a Build-Operate-Transfer (BOT) contract, told the public that the international arbitration over the premature termination of these contracts had gone good for the operators and bad for the Lebanese state.
Instead of $1.45 billion demanded by the government for alleged contract violations in 16 cases, the arbiters had ruled in favor of the state in a single point, for a meager award of $1.5 million, or one per 1000, LibanCell claimed in its ad campaign. On top of that, for having been wronged through the early termination of the original contracts and other violations of the agreement through the state, the international arbitration had awarded it compensation amounting to a total of nearly $267 million, LibanCell trumped up.
The dispute originated in 2000/2001 when the ministry of telecommunications had began accusing both BOT operators, LibanCell and French-Lebanese Cellis, of numerous contract violations centering around an alleged act of exceeding subscriber ceilings of 125,000 customers per network. The companies had argued in return that no such ceilings had been agreed upon in their somewhat ambiguous contracts. Especially LibanCell was indignant and tried with large, number-driven ad and PR campaigns at the peak of the confrontation to convince public opinion of its viewpoint.
However, impeded by their high (and government mandated) per minute charges, the companies couldn’t shake off the allegations in the public mind and the confrontation between state and operators brought development of mobile telephony in Lebanon to a screeching halt that impedes communication until today. The BOT contracts were terminated in 2002 but attempts to auction off operator licenses under the label of privatization failed. Network management remained for an extended period with the old companies until the current operators MTC and Faldete were brought in last year.
As LibanCell now played the cards of having been vindicated in arbitration, Beirut rumor mills alleged that the company could have ambitions to come back as network operator when the sector gets fully privatized, while former telecommunications minister Jean-Louis Qordahi hastened to accuse the company of not having paid all its dues owed to the government, which LibanCell angrily refuted.
In the meanwhile, the honeymoon between MoT and the new operators seemed over, as the ministry announced fines against the firms for not doing their job perfectly. The caretaker companies responded in saying that they were fulfilling their obligations and were committed to the welfare of the sector.
What consumers and economy continue to wait for, is an end to tiresome telco affairs, reduction of insanely high mobile phone charges and fulfillment of some long-promised side benefits, such as network upgrades, implementation of new regulatory frameworks, and introduction of a third operator. The state is in charge.
