Palestinians need cell phone competition-World Bank

JERUSALEM, Feb 13 (Reuters) - The World Bank said on Tuesday Israel and the Palestinian Authority should open the Palestinian mobile phone sector to competition in order to improve efficiency and lower tariffs.

The PalTel group, whose subsidiary Jawwal is the only authorised mobile operator in the Israeli-occupied West Bank and in the Gaza Strip, effectively operates as a monopoly, costing the Palestinian Authority millions of dollars a year, the World Bank said.

"By developing the capacity to regulate the largest monopoly in the West Bank and Gaza and spur competition in the telecommunications market, the Palestinian Authority will help develop its ability to provide a better regulatory environment for the entire economy," the World Bank said in a statement.

The World Bank report said promoting cooperation between Israeli and Palestinian technical teams will improve service. The Palestinian Authority relies on Israel to provide cellular phones frequencies and to allow them to import equipment.

Jawwal is currently challenged only by Israeli providers who account for 20 percent of the market, the World Bank said.

A second Palestinian mobile phone network, Kuwait's National Mobile Telecommunications Co (NMTC.KW: Quote, Profile, Research, Stock Buzz) (Wataniya), won Israeli frequencies to operate in the Palestinian territories last year, but the World Bank said Israel has yet to allow them to begin.

The World Bank estimated that the delay will cost the Palestinian Authority $13 million the first year and $28 million the second year in lost tax revenues. Wataniya is controlled by Qatar Telecommunications Co QTEL.QA.

Wataniya is aiming to sign up 400,000 customers in the first year and 600,000 in the second year and has committed to invest about $600 million.

The World Bank also recommended the Palestinian Authority create an independent telecommunications regulatory authority and to implement a more transparent system for generating and collecting tax revenues. (Writing by Ari Rabinovitch, Editing by Chizu Nomiyama,)