Egypt's Orascom Tel extends Lebanon firm contract

Reuters, Tuesday 1 Mar 2011

Leading Egyptian telecoms company looks to develop the sector in Lebanon

Egyptian telecoms firm Orascom Telecom said on Tuesday it had extended its management contract with Lebanese mobile firm Alfa, in a bid to tap a growing market.

Orascom, which has a presence in countries from Pakistan to Canada, said in a statement the contract was extended for one year, starting February 2011.

It said the extension would allow it to continue its development plans for Lebanon's mobile phone services, which include installing third generation services and expanding Alfa's network coverage.

Alfa, one of two state-owned Lebanese mobile firms, said on 15 June it expected to double the number of its subscribers after a long-delayed privatisation.

Orascom's chairman also said in June that the Lebanese telecommunications sector had to be privatised.

In its current state the network lags far behind others in the region, with high-priced services, limited Internet capacity and slow connections, all of which have discouraged investors from establishing businesses in Lebanon.

The terms of the contract remain unchanged, whereby Orascom Telecom receives $2.5m per month, plus 8.5 per cent of revenues.

Orascom will cover network operational expenses, and the Lebanese government will be responsible for capital expenditure during the contract period.

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