June 2, 2010 / 5:41 PM / 9 years ago

OT says Lebanon telecoms sector must be privatised

* Says multiples from privatisation deal would be high

* Privatisation contentious issue; repeatedly put on hold

BEIRUT, June 2 (Reuters) - The chairman of Egypt’s Orascom Telecom ORTE.CA, whose company has a management contract with one of Lebanon’s mobile telecoms firms, said the Lebanese telecommunications sector had to be privatised.

The privatisation of the two state mobile firms has been discussed for years but wrangling among powerful leaders, political instability over the past few years and unfavourable market conditions has stopped the process in its tracks.

“There is no solution for this sector except privatisation. There isn’t a country in the world that hasn’t privatised this sector except for you and this is damaging,” Naguib Sawiris said at a lecture in Beirut.

“I expect the multiples will increase because of scarcity.”

Lebanese privatisation chief Ziad Hayek said earlier this month Lebanon needs a year to prepare for the privatisation of its telecoms sector even if a decision on the plan is reached soon.

Orascom Telecom has a management contract from Alfa, one of the fledgling state firms.

“Someone has to take this company and spend on it, improve the quality, introduce new technologies and increase sales,” Sawiris said.

“You are the only country where penetration is not 100 percent. It’s unbelievable that underdeveloped countries in Africa have reached 120 percent and you’re at 60-70 percent.”

Finance Minister Raya al-Hassan has said privatising the sector, which officials first said in 2007 could bring in as much as $7 billion, could begin later this year or early in 2011.

Besides improving the efficiency of the moribund sector, which has among the highest mobile phone charges in the region, liberalising the industry is key to bringing down Lebanon’s massive debt, projected to reach $55 billion or about 147 percent of GDP this year. (Reporting by Yara Bayoumy; Editing by Jon Loades-Carter)

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