License Agreements for Mobile and Fixed-Line Telecom Companies in Palestine

The State Audit and Administrative Control Bureau (SAACB) conducted an audit of the license agreements for the governmental and fixed-line telecommunications companies, and observations were recorded in its 2021 annual report, which I will present below, and which will astonish the reader!... when he sees how the ministries concerned neglected in this important matter, namely the licensing of cellular and fixed-line telecommunications companies, to discharge their responsibilities and exercise their powers.. they appeared boastful..and drained of strength, in the face of the market monopoly by some of these companies, and the negligence of the ministries concerned, in collecting the rights of the State Treasury...etc. of what you will see (according to the report), of the silence of the concerned ministries, and their lack of enthusiasm to deal with these companies, in accordance with the applicable laws and regulations, and the turning of a blind eye to the violations of these companies, which did not even pay any attention to the SAACB’s important report and observations.. they did not respond to the report at all.. and the State Audit and Administrative Control Bureau (SAACB) did not take any action regarding the negative reaction of these companies... since the report was not referred by the SAACB to any other entity such as the Council of Ministers... meaning that the matter entered a state of hibernation... and the apparent predominance in the substance of the report does not seem to be in the public interest... !

·      Observations of the State Audit and Administrative Control Bureau (SAACB)....

·      Monopoly by Ooredoo of some services

-      The ministry granted the Wataniya company the exclusive license for the third generation and the frequencies allocated to it for the duration of the agreement, and the agreement obligated the ministry to compensate the company in the event that part of the frequencies allocated to the company were vacated, which indicates (the company's monopoly) of some services, and weakens competition among the companies operating in the telecommunications sector.

·      Licensing of third-generation services to Jawwal, although they are exclusive to Ooredoo under the agreement signed with it..!

-       The Ministry of Telecommunications and Information Technology granted Jawwal a license for third-generation service, although it is exclusive to Ooredoo under the agreement signed with it.

·      Clauses of the license agreement signed between the Palestine Telecommunications Company and the ministry

-      The clauses of the license agreement signed between the ministry and the Palestine Telecommunications Company lack the existence of frequencies for which annual fees are payable as annual charges, while obliging the company to obtain a separate license for each frequency annually.

·      Necessary reconciliations to prove the amounts due between Jawwal and the Ministry of Finance.

-      The necessary reconciliations were not carried out to prove the amounts due between Jawwal and the Ministry of Finance concerning the 7% proceeds.

·      Payment of the second installment of Ooredoo's license fees

-      Ooredoo did not commit to paying the second installment of its license fees, which is linked to the company reaching 700,000 subscribers, and the ministry did not take legal measures against the company to ensure payment of the amounts due.

-       Exemption of Ooredoo from paying annual interest, according to the company's projected financial statements

·      The ministry's role in following up with telecommunications companies

-      The ministry's role in monitoring telecommunications companies to calculate and collect the annual proceeds was shown to be absent.

·      Financial statements of the telecommunications companies and Jawwal

-      Jawwal and the telecommunications companies did not provide the ministry with the financial statements of their business results, which led to the inability to verify the companies' annual obligations and the failure to issue final financial claims regarding the 7% fees against these companies!

·      Coordination between the Ministry of Telecommunications and the Ministry of Finance

-      There is weak coordination between the Ministry of Telecommunications and the Ministry of Finance regarding the fees or payments that had been remitted by the companies (Ooredoo, Jawwal, the telecommunications company) to the Ministry of Finance, which weakens the ministry's role in following up on those fees, determining the amounts due on the companies, and recording deductions or exemptions granted to them.

·      Control and inspection of the operations of telecommunications companies

-      The ministry did not carry out control and inspection of the companies' operations (Ooredoo, Jawwal, the telecommunications company), contrary to Article (20) of the license agreements, which weakens the ministry's ability to regulate the companies' operations and the extent of their compliance with the applicable laws and regulations.

·      Exempting telecommunications companies from paying any fees to a governmental entity, outside the license fees stipulated in the agreement

-      It was shown that the ministry exempted the companies from paying any fees or charges to any governmental entity, local authority, or municipality, outside the license fees stipulated in the agreement, which may lead to depriving those entities of due revenues imposed by other laws regulating their work!

·      Financial records for amounts due from the companies

-      There did not appear to be financial records at the ministry showing the value of amounts owed by the companies (Ooredoo, Jawwal, the telecommunications company), the amounts that were paid, the final balance, and the specific dates for each transaction recorded in those registers, which would enable obtaining official detailed reports for each company upon request.

·      Rent fees

-      It was shown that the ministry subjected the companies to payment of rent fees from the date of the new licenses, without addressing the previous licensing period and the rent fees due by the companies for that period!

·      Response of the entity to the report: There was no response to the report.!! And there is no action on the report by the SAACB!!