Essar bids for cellular networks in Lebanon

Essar Teleholdings, the telecom arm of the Essar Group, is eyeing the Lebanese GSM cellular market. It has bid for the country's two government-owned networks.

Confirming the development, Vikas Saraf, chief executive officer of Essar Teleholdings, said: "The two companies, Cellis and LibanCell, are being privatised, and the government of Lebanon has invited operators to take part in the process. We have bid as part of a consortium."

With 4 million subscribers, the Lebanese cellular market was lucrative, Saraf said. He, however, refused to divulge Essar's stake in the consortium.

Apart from the high average revenue per user in Lebanon, the privatisation of cellular companies is being followed by the global market because it will be the first in a series to reduce the government's burgeoning annual budget deficit.

The Lebanese government had nationalised Cellis and LibanCell in 2001. It now plans to auction 20-year licences for the two companies.

The two networks were operating on build-lease licences and had offered the government $1.35 billion each to convert their contracts into 20-year licences.

But the offers were rejected and the existing contracts cancelled three years before they were due for renegotiation.

The revenues from the two companies go to the government, and a fee is paid to them for managerial services.

Back home, Essar Teleholdings operates exclusively in the Haryana, Uttar Pradesh and Rajasthan circles. In a joint venture with Hutchison, it operates in Delhi, Mumbai, Kolkata, Karnataka and Gujarat.