VZCZCXRO8651
OO RUEHROV
DE RUEHJM #1372 2111428
ZNY CCCCC ZZH
O 291428Z JUL 08
FM AMCONSUL JERUSALEM
TO RUEHC/SECSTATE WASHDC IMMEDIATE 2308
INFO RUEHXK/ARAB ISRAELI COLLECTIVE PRIORITY
RHEHNSC/NSC WASHDC PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY C O N F I D E N T I A L JERUSALEM 001372 
 
SIPDIS 
 
NEA FOR FRONT OFFICE; NEA/IPA FOR 
GOLDBERGER/ROSENSTOCK/SACHAR; PRM FOR PRM/ANE; NSC FOR 
PASCUAL; TREASURY FOR ROSE; EEB/CIP FOR GROSS/GIBBS; PLEASE 
PASS TO USAID FOR KUNDER/MCCLOUD/BORODIN 
 
E.O. 12958: DECL: 07/29/2013 
TAGS:            
SUBJECT: WATANIYA'S WAIT IS OVER: MOBILE TELECOM PROVIDER 
HAS SPECTRUM, LOOKS TO BEGIN OPERATIONS 
 
REF: JERUSALEM 586 
 
Classified By: Consul General Jake Walles, Reasons 1.4 (b) and (d) 
 
 1. (C) Summary:  On July 28, after negotiations lasting more 
than eighteen months, the Palestinian Authority reached 
agreement with the GOI on the spectrum necessary to allow the 
West Bank's second mobile telephone operator to do business. 
Wataniya Palestine now needs to import and install network 
equipment in order to meet its January 2009 launch date.  The 
GOI's allocation of frequencies also triggers Wataniya's 
first license payment to the PA, expected to be approximately 
USD 80 million, at a time when the PA desperately needs 
funds.  Further payments to the PA, including a regular share 
of revenue, will come once Wataniya launches its service.  PA 
and Wataniya contacts are pleased to have the spectrum 
allocation issue behind them, but expect difficult 
negotiations with the GOI on import of their equipment.  End 
summary. 
 
Frequency allocation allows 
Wataniya to get started 
--------------------------- 
 
 2. (C) PA Deputy Minister of Telecom Suleiman Zuhairi 
confirmed to Econoff that the GOI and PA signed a frequency 
allocation agreement on July 28, granting the PA frequency 
spectrum sufficient to allow second Palestinian mobile phone 
provider Wataniya Palestine to begin operations.  (Note: 
Wataniya won the bid for the mobile license in September 
2006, but negotiations on the frequency spectrum delayed its 
deployment of service.  End note.)  According to Zuhairi, the 
agreement makes 2.4 mhz at the 900 bandwidth available to 
Wataniya now, and, after some step-up allocations in January, 
Wataniya will have 4.5 mhz at 1800 bandwidth by March 2009. 
 
Financial boost for the PA 
-------------------------- 
 
 3. (C) Under the terms of Wataniya's license agreement with 
the PA, the company will pay the PA an initial installment of 
USD 80 million in the coming weeks.  Prime Minister Fayyad 
confirmed to the Consul General that he expects this 
transfer, but does not have a firm date for its delivery. 
Once Wataniya begins operations, it will make additional 
license payments to the PA, and provide a regular stream of 
funds through a revenue sharing agreement.  Wataniya 
Palestine CEO Allan Richardson estimates that Wataniya could 
provide the PA up to USD 50 million a year and create upwards 
of 2,500 jobs in the West Bank. 
 
Wataniya begins import effort 
----------------------------- 
 
 4.  (C) Richardson told Econoff on July 28 that he was 
satisfied the amount of spectrum allocated will allow his 
company to launch in January 2009, provided that they are 
able to import and install the necessary network equipment. 
(The first Palestinian mobile telephone operator, Jawwal, was 
unable to secure GOI agreement to import its servers to the 
West Bank, and instead located them in the UK.)  Richardson 
thanked Quartet Representative Blair for his help in securing 
GOI agreement on the frequency allocation, and expressed hope 
that Blair and the USG would support his efforts to import 
equipment.  Palestine Investment Fund (PIF) Chairman Mohammad 
Mustafa also expressed his thanks to the Consul General for 
USG efforts on this issue.  Wataniya's first meetings with 
the GOI on equipment issues are scheduled for early August. 
 
Gaza on hold 
------------ 
 
 5. (C) There will be no Wataniya service in Gaza for the 
foreseeable future.  According to Zuhairi and Richardson, the 
GOI insisted that the spectrum allocation be for the West 
Bank only.  In addition, Wataniya has not concluded its 
tender for network infrastructure in Gaza.  In the West Bank, 
the infrastructure contract was awarded to Ericcson in 
October 2007. 
WALLES