FORMER TELECOM MINISTER TO HEAD TUNISIE TELECOM

C O N F I D E N T I A L TUNIS 000696

SENSITIVE
SIPDIS

STATE FOR EEB/CIP/BA (ALAN GIBBS) AND NEA/MAG
STATE PASS USTR (BURKHEAD)
USDOC FOR ITA/MAC/ONE (NATHAN MASON),ADVOCACY CTR
(REITZE),AND CLDP (TEJTEL AND MCMANUS)
CASABLANCA FOR FCS (ORTIZ)
CAIRO FOR FINANCIAL ATTACHE (SEVERENS)
LONDON AND PARIS FOR NEA WATCHER

E.O. 12958: DECL: 06/26/2018
TAGS: ECPS EINT ECON TS
SUBJECT: FORMER TELECOM MINISTER TO HEAD TUNISIE TELECOM

REF: 07 TUNIS 119

Classified By: Ambassador Robert F. Godec for Reasons 1.4 (b) and (d).


1. (SBU) On June 24, the board of directors of majority
state-owned Tunisie Telecom (TT) named former Minister of
Communications Technologies Montasser Ouaili CEO. Ouaili
leaves his current posting as Ambassador to Italy after only
nine months. Ouaili will replace current CEO Ahmed Mahjoub,
who has held the position from 1997 - 2001 and then again
from 2002 to present. According to newspaper reports, Ahmed
Mahjoub will remain at TT as the number two.


2. (SBU) Tunisie Telecom is Tunisia's sole fixed line
provider and one of two mobile service providers (the other
being private Tunisiana). Due its monopoly on fixed line
service, all broadband internet connections are also reliant
on TT for bandwidth. TT remains majority state-owned, but in
2006 a 35 percent share of the company was purchased by
Emirati Dubai Investment Group for a price of US $2.5
billion. Tunisie Telecom has long been panned by both
Tunisian and foreign investors for its sub par service.
Although hopes were high that the privatization would bring
needed improvements in service, there has been little
tangible progress in this regard. There have long been
rumors that an additional 16 percent of TT will be privatized
imminently, but this has not yet been announced.


3. (C) Ouaili's appointment follows the May departure of
Deputy Director General Francois Lucas, who was brought in by
Dubai Investment Group and remained in the position for a
year and a half. Lucas' departure is one in a series, with
the company experiencing a virtual revolving door of
high-level managers. Ahmed Mahjoub is rumored to be a
difficult personality and also resistant to change.


4. (C) Comment: Ouaili's appointment to beleaguered Tunisie
Telecom is a positive sign that change may be on the way.
Although nearly 50, Ouaili is among the new generation of GOT
leaders and is very forward leaning. Ouaili is also
US-friendly, having received a PhD in Computer Science from
the University of California at Los Angeles. During a
January 2007 meeting with the Ambassador (reftel),then
Minister Ouaili voiced his strong support for introducing
greater competition in the telecom sector, as well as full
privatization. With Ouaili at the helm, we hope that
Tunisia's telecommunications services and infrastructure will
finally be brought into the 21st century.


5. (C) Comment (cont'd): Ouaili's move from his current
position as Ambassador to Italy may also presage a rumored
Cabinet reshuffle. New ministerial appointments, accompanied
by changes in Ambassadorships and governorships, have often
occurred in late July or during the month of August. There
has been speculation that changes may be announced in July in
time for the RCD Party Congress. End Comment.

Please visit Embassy Tunis' Classified Website at:
http://www.state.sgov.gov/p/nea/tunis/index.c fm
GODEC