POST ADVOCATES FOR MOTOROLA IN ADVANCE OF SPECTRUM

UNCLAS JERUSALEM 001921

SIPDIS

SENSITIVE
SIPDIS

NEA FOR FRONT OFFICE; NEA/IPA FOR
GOLDBERGER/SHAMPAINE/BELGRADE; NSC FOR ABRAMS/WATERS;
TREASURY FOR SZUBIN/LOEFFLER/NUGENT/HIRSON; BRUSSELS FOR
LERNER

E.O. 12958: N/A
TAGS: ECPS BEXP EINV KWGB IS
SUBJECT: POST ADVOCATES FOR MOTOROLA IN ADVANCE OF SPECTRUM
ALLOCATION FOR SECOND MOBILE PHONE NETWORK

REF: JERUSALEM 1453


1. (SBU) Summary: Econoff and FCS specialist called on Allan
Richardson, CEO of Wataniya Palestine, on September 5 in
Ramallah to advocate on behalf of Motorola's tender for
Wataniya's mobile network construction. Richardson said that
Wataniya has chosen Ericsson to construct its West Bank
network, but that Motorola remains competitive for the USD
100 million Gaza construction tender. Richardson said that
he expects the GOI to allocate the necessary spectrum in the
coming weeks, allowing Wataniya to begin its West Bank mobile
network operations. The Palestinian Authority (PA) Ministry
of Telecom also expects the frequency to be released by the
GOI in September, which would trigger payment of Wataniya's
USD 355 million license fee to the PA. Within the West Bank,
the creation of a second mobile network is expected to create
2500 jobs and USD 150 million of construction contracts.
End summary.

Wataniya Chooses Ericsson over Motorola
--------------


2. (SBU) Econoff and FCS specialist met with Wataniya
Palestine CEO Allan Richardson on September 5 in Ramallah to
advocate for Motorola, who bid on Wataniya's tender for its
mobile network construction. Richardson said that Wataniya
had recently chosen Swedish company Ericsson as the winner of
the mobile network construction tender in the West Bank. He
added that Motorola remains competitive to secure the Gaza
mobile network construction tender, which is roughly USD 100
million, yet remains outstanding due to the continued closure
of Gaza.

PA Requests Release Of Frequencies
Will Trigger Payment of USD 355 Million
--------------


3. (SBU) Wataniya, despite winning the bid for the second
mobile operator license in September 2006, has not been able
to close on contracts to begin its mobile network operations,
as the GOI has not allocated the necessary spectrum to the
PA. Richardson said that he expects the GOI to allocate the
frequency in the "coming weeks," which will trigger payment
of its license fee of USD 355 million to the PA Treasury.


4. (SBU) Deputy Minister of the Ministry of Telecom and
Information Technology (MoTIT) Sulaiman Zuhairi told econoff
September 6 that he expects the GOI will allocate the
frequency in September 2007. Zuhairi sent a letter to the
GOI on September 5, repeating MoTIT's numerous requests to
the GOI since 2003 for the release of frequencies to the PA.
(Post has emailed a copy of Zuhairi's letter to NEA/IPA and
Embassy Tel Aviv).

Second Mobile Operator's Economic Impact
--------------


5. (SBU) Richardson underscored the Wataniya deal's
potential benefit to the Palestinian economy, stating that
his company expects to hire directly some 500 Palestinians
and indirectly another 2000 via telecom network construction
contracts. He said Wataniya Palestine plans to invest USD
150 million in West Bank network infrastructure projects,
including the construction of towers, antennas, and switches.
WALLES