SyriaTel

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In January 2001, the Syrian subsidiary of Egypt-based Orascom Telecom (OT) won one of the two licenses to operate a GSM 900 network on a build-operate-transfer basis for 15 years. The joint venture was originally 25% owned by OT and 75 percent held by various Syrian investors. Along with the other winning bidder, SpaceTel, the company paid the government an upfront fee of US$20 million for the license, with an additional US$15 million fee payable to use GSM 1800 Mhz frequency bands without further bidding. According to the original BOT license contract, OT was to give the Syrian government 30% of its revenue in the first three years, 40% during the second three years, and 50% in the remaining period. The two companies were to set up the initial mobile network, which was set up in the capital, Damascus, the northern city of Aleppo and the western city of Latakia for a trial period of one year. OT said it was to have an "aggressive rollout for the Syrian network" with a network investment of more than US$60 million in the first year. OT completed the agreed transaction to dispose of its 25% stake in Syriatel after settling a legal dispute with its local shareholder, Drex Technologies. The agreement, reached on July 16, 2003, settled a dispute over an Orascom allegation, submitted in October of 2002, that Drex had been making use of its political affiliations to take over the company. The settlement had resolved all legal disputes and litigation in international and Syrian jurisdictions. OT was to no longer hold any shares in Syriatel and was to receive cash consideration to compensate for OT's initial investment, loans made to Syriatel and expenses incurred. OT was to continue to provide management expertise to Syriatel on a contract basis for a management fee. SyriaTel was then largely controlled by Makhlouf family interests. By the end of 2004, SyriaTel was Syria's mobile market leader with about 1 million subscribers. 2011 investment amount based on known first three quarters (Q1-3 2011) extrapolated to the whole of 2011. 2012 ibid. Based on Wireless Intelligence According to the press report dated June 2005 - SyriaTel's network covers 99 percent of populated areas in the country and has invested about $300 million since it began operations four years ago. The 300 million investment, excluding investment figures and license fees for year 2001, was divided equally into 4 years starting 2002.