Egypt's Orascom Telecom and Kuwait's Mobile Telecommunications Company (Zain) won contracts to operate Lebanon's two fledgling mobile firms, a cabinet statement said on Monday night.

'These two companies have experience in the Lebanese market that allows them to manage well and positions them as the best companies to run this sector in Lebanon,' Information Minister Tareq Mitri said.

Contracts to operate MTC Touch and Alfa mobile networks had expired last month.

According to newspaper reports, the new contracts are worth $145 million, and will come into effect from February 1 for one year.

Zain, by offering the most competitive price to run the network, through mtc touch in Lebanon, is committed to increase its customer base by an additional 400,000 as part of a rapid and committed government-funded expansion plan, said a top official.

Currently mtc touch has over 800,000 active customers, Dr Saad Al Barrak, Zain chief executive officer, added.

'We are delighted to have won and look forward to consolidating the commitment to Lebanon we started more than four and half years ago. We look forward to the privatization of the mobile sector and are hopeful that we can secure a long term license to operate in this promising country,” Al Barrak observed.

In June 2004, Zain commenced a 4-year agreement with the Lebanese government to manage one of the country’s two existing mobile networks (Mobile Interim Company 2 – MIC2).

In November 2004, the operation was branded as mtc touch and today it is the only one of Zain’s 22 operations not owned by the Zain Group, Al Barrak observed.

Lebanon has some 1.1 million mobile phone users out of a population of 4 million and mobile phone charges are among the highest in the Middle East.

Zain has on offer diversified portfolio of services such as credit transfer, roaming on aircrafts, data roaming, electronic auction on special numbers and Edge Technology covering all Lebanese territories and Blackberry facilities, Al Barrak added.

The new operators are expected to increase the network and bring prices down. The new contracts are a stop-gap measure until long-delayed privatisation of the mobile firms takes place.

The privatisation has been put on hold because of global market conditions.