JERUSALEM (AFP) — The World Bank on Wednesday urged an opening up of the Palestinian telecommunications sector, saying this would yield far-reaching benefits to the overall economy.
It also lamented that Israel had failed to free up frequencies for the second Palestininian mobile operator, Wataniya, preventing it from beginning to compete with the Jawwal unit of PalTel, which currently has a monopoly.
"Improved efficiency brought about through competition will reduce the cost of doing business in all sectors, lower the cost of telecommunications services to consumers and help increase government revenues," said a statement issued in Jerusalem.
Also, by developing the capacity to regulate the largest monopoly in the West Bank and Gaza and spur competition, the bank said the Palestinian Authority will develop its ability to provide a better regulatory environment in the entire economy.
Agreements between Israel and the Palestinians prohibit Israeli operators from providing service in the West Bank and Gaza, but the World Bank said these companies nonetheless account for 20 percent of the market.
The bank said the delay in giving frequencies to Wataniya means the cash-strapped Palestinian Authority has not received the 355 million dollars due to it for the sale of the licence and that the company has "made little of the badly needed 600 million dollars in investment it has promised."
It added that the delay will cost the Authority 13 million in revenues in the first year and 28 million in the second.
Wataniya was awarded the licence in 2006, but objections from the Israeli army have led to the frequencies not being made available.
At a meeting with Palestinian president Mahmud Abbas in January, Israeli Prime Minister Ehud Olmert promised to break the impasse, but this has not yet happened.
The World Bank said it also recommended that the Palestinian telecommunications ministry issue new licences in the data sector and issue frequencies for eventual wireless data licences.
And it called on the Palestinian Authority to "regulate and monitor anticompetitive behaviour, including the concentration of monopoly power in PalTel."
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