Vodafone drops out of bidding for Lebanese mobile contract

By Matt Smith

DUBAI, Aug 20 (Reuters) - Vodafone Group (NasdaqGS: VOD - news) has scrapped its interest in obtaining a management contract to run one of Lebanon's two state-owned mobile operators, the UK-based company said on Thursday.

Vodafone's withdrawal, which the company revealed in an emailed response to questions from Reuters, is a blow to Lebanon's telecoms ministry, which has been seeking long-term agreements to manage the two operators for more than two years.

Kuwait's Zain, in charge since 2004 of the biggest operator, Touch, and Orascom Telecom Media and Technology (OTMT), which has managed Alfa since 2009, have been running the firms on short-term rolling contracts since a longer-term deal expired in 2013.

The ministry said it would launch a tender for new three- to five-year agreements in April 2013, but this was delayed due to Lebanon's struggles to form a cohesive government.

It (Other OTC: ITGL - news) eventually invited bids earlier this year. Six international companies made offers, Beirut-based Daily Star reported this month.

These were Zain, Vodafone, France's Orange (Taiwan OTC: 4554.TWO - news) , Malaysia's Maxis (Other OTC: MAXSF - news) , Turkey's Turkcell and a subsidiary of Deutsche Telekom (Xetra: 555750 - news) , the paper said.

But Vodafone has now quit the race.

"Vodafone has decided not to pursue the opportunity in the Lebanon, but we have no further comment to make beyond this," the company said via email.

Meanwhile OTMT failed to submit an application on time, the Star said.

Lebanon's presidency has been vacant for more than a year, and the parliament elected in 2009 has extended its own term and postponed elections until 2017 on the grounds of instability. (Reporting by Matt Smith; Editing by Greg Mahlich)