Telecommunications Regulatory Authority president Kamal Shehadi and Ziad Hayek, president of the Higher Council for Privatization, told a Beirut news conference that applications for the tender must be submitted on February 1.

A public auction will then be staged in the presence of the media on February 21, when the highest bidders will be chosen to take over the two existing mobile phone licenses, they said.

Each winning bidder will be required to create a joint stock Lebanese company, they said.

The winning bidders will then have to transfer to the government one third of the equity of the joint stock company as part of the payment of the tender.

The government will then sell shares through an initial public offering on the Beirut Stock Exchange within 12 months, with share ownership restricted to Lebanese citizens, they said.

The country's GSM network of 1.1 million mobile phone lines is currently state-owned and operated by Kuwait's MTC Touch and Lebanon's Alfa, whose contracts expire in mid-2008.

Shehadi told Agence France Presse on Thursday that under the privatization plan, a third operator will own and run a third GSM license by the first half of 2008.

Mobile telephones provide the government with its main source of revenue, generating about 900 million dollars annually.

The decision to sell the mobile network is part of government plans to introduce reforms as a precondition to obtain much-needed financial assistance pledged by donors at a Paris conference in January.

Lebanon secured pledges of 7.6 billion dollars in grants and loans to help alleviate the country's economic woes, made worse by last year's devastating war between Israel and the Shiite Hizbullah movement.

Privatization will also help to reduce the cost of mobile phone calls in Lebanon.

"Our local and international tariffs are among the highest in the world, if not the highest," Shehadi told AFP on Thursday.(AFP)

by Naharnet