November 1, 2009 / 4:41 PM / 10 years ago

UPDATE 3-Wataniya Palestine launches West Bank network

* Companies receives pledge from Blair over frequency

* Middle East envoy Blair welcomes launch of Wataniya

* Network launches with 40,000 users (Adds Blair statement in paragraphs 4, 6)

By Ali Sawafta

RAMALLAH, West Bank, Nov 1 (Reuters) - Wataniya Palestine launched its mobile phone service in the West Bank on Sunday even though Israel has yet to release the full range of frequencies agreed upon for the network, Palestinian officials said.

Mohammad Mustafa, head of the Wataniya Palestine board, said the company had begun functioning with a frequency range of 3.8 MHz, less than the 4.8 MHz Israel had agreed to open under an agreement with the Palestinian Authority signed last year.

“They will give us the additional 1 MHz as soon as possible,” Mustafa told Reuters, adding that Tony Blair, envoy for the international Quartet of Middle East peace mediators, had promised the company it would acquire the remaining frequency.

A statement from Blair’s office said he welcomed the launch of Wataniya and had received assurances from Israel that the remaining frequencies would be released.

“Mr. Blair urged the Government of Israel to release the remaining 1MHz of frequency as soon as possible,” the statement said.

The establishment of Wataniya, the second mobile operator in the West Bank, has been backed by the World Bank and the U.S. government as part of efforts to boost support for Palestinian President Mahmoud Abbas and his Western-backed government.

Blair said the launch would “provide a welcome boost to the Palestinian Authority and the government’s work to attract Arab and international investment.”

The dispute between Israel and the Palestinians over frequency for the network has been dragging on for more than two years. As occupying power, Israel controls the airwaves of the West Bank, where 2.5 million Palestinians live.

An Israeli official said last month the remaining frequencies would be released once the Palestinians had met their part of the agreement, but did not detail what the unfulfilled commitments were.

Wataniya Palestine is owned by Kuwait’s National Mobile Telecommunications Co NMTC.KW, a unit of Qatar Telecommunications Co QTEL.QA and a holding company for Palestinian public assets.

It enters the market alongside a network operated by the Palestine Telecommunications Co (PalTel), until now the sole provider. PalTel, which has about 1.5 million subscribers in the West Bank and Gaza Strip, is majority owned by Kuwait’s Mobile Telecommunications Co (Zain) (ZAIN.KW).

Wataniya Palestine had hoped to launch its service by Oct. 15, and had threatened to pull out if it could not have the full 4.8 MHz agreed to by Israel. In June, the company demanded its investment back unless the frequencies were opened.

The company has invested some $270 million on infrastructure in addition to a license fee of $140 million paid to the Palestinian Authority.

Mustafa said Wataniya Palestine would begin operations with 40,000 users who had registered during a promotional campaign launched a month ago. Mashoor Abu Dakka, Palestinian telecommunications minister, said there would be a “long-term battle” for the release of the remaining frequency.

“The Israeli side didn’t commit to what it had promised. But we wanted the company to become a reality,” he said. (Writing and additional reporting by Tom Perry in Jerusalem, editing by Maureen Bavdek)

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