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Clarification communique by Orascom Telecom Lebanon

22 January 2020

Communique by Orascom Telecom Lebanon (OTL)

In the light of the false information being circulated recently and currently either on purpose or not in relation to the extension of the management contract of MIC1 signed between the Republic of Lebanon represented by the Ministry of Telecommunications and Orascom, we would like to clarify the below:
1- Orascom entered the Lebanese telecom market in 2009 after winning a transparent international bid conducted by MoT for one renewable year. After its signature on 31/01/2009, the management contract was subject to a fundamental amendment on 31/1/2012 and to 34 extension decisions since the first signature. Decisions were taken either by the Council of Ministers of Lebanon which delegated the Minister of Telecom to represent it or through direct decisions issued by the guardianship Minister under successive caretaker governments.
The extension periods varied from one month to a year, without limitation:
- One-year extension of the management contract on 31/1/2011 during caretaker period, by previous Telecom Minister Charbel Nahas.
- 3-month extension, for 3 successive times, starting 1/07/2013 by previous Telecom Minister Nicolas Sehnaoui.
- 6-month extension on 30/09/2016 during caretaker period by previous Telecom Minister Boutros Harb.
- 3-month extension on 31/12/2018 during caretaker period by previous Minister Jamal Jarrah.
It is worth noting that in some cases, OTL was informed of the extension after contract expiry, same as what occurred in 2017 when the contract expired on October 30, and the government’s decision to extend the contract was only communicated to OTL on 17/11/2017, 17 days after expiry.
2- The management contract clearly defines the process and mechanisms that should be followed in case the Republic of Lebanon wishes to extend or renew the contract (60 days before contract expiry), or in case it wishes to terminate it. It is worth noting that OTL has always abided by the deadlines stipulated in the contract.
3- On 31/12/2019, OTL received an explicit decision from the Minister of Telecom requesting from us to continue to carry out our duties in line with the management agreement provisions to ensure the continuity of the public service until we are notified of the entity to whom handover shall be made. Our reply was clear in that we will not give up our duties and responsibilities and confirmed our full readiness to the handover process with all what it entails, including procedures and administrative support in the transition period. This while noting that Orascom has executed in advance all the contractual obligations of the handover. It is worth highlighting that OTL has not yet been informed of the starting date of the handover.
4- The letter received from H.E. the Telecom Minister, as well as all letters of previous Telecom Ministers, constitute the contractual framework which explains the continuation of our management of Alfa. This in addition to our moral obligations to ensure the continuity of the public service and avoid falling into void which may lead to additional burdens and financial treasury losses. In all cases, we express our full readiness for the handover process as well as the completion of all needed acquittances with the Ministry of Telecom immediately upon receiving a decision in this respect and in line once the handover entity to which management and employment contracts are to be transferred is designated.
5- We would like to reiterate our commitment to our responsibilities until the last minute, as from the first day, where we have adopted for the past ten years the latest international and state-of-the-art technological innovations and novelties which enabled the mobile sector to move from 2G to 5G, and definitely 3G and 4G in between. We are proud of the advanced ranking of Lebanon today, internationally and within the pan-Arab region being the 21st worldwide and 4th in the Arab region in terms of mobile internet speeds, outpacing many developed countries.
We reaffirm to the public that our management was and remains transparent abiding by all international standards in terms of financial and administrative audit through international audit firms (from the Big Four). We fully confirm as well that, contrary to all circulating rumors, no files or legal procedures related to us are pending before the judiciary system or any other party, and we have no outstanding liabilities to any party.
OTL and its board fully abide by the law, therefore we call upon everyone not to adopt the tendentious rumors, and some parties to refrain from making false and baseless accusations for the sake of preserving the dignity of everyone working in the sector.