Etisalat in talks over Benin spat

Emirates Telecommunications Corp. (Etisalat) said on Monday its African unit would open talks with Benin's government this week to try to resolve a dispute that forced it to suspend its mobile phone services.

Benin's telecoms regulator suspended the networks of two of the country's four mobile phone operators on Thursday, including that of Atlantique Telecom, a 70-%-owned subsidiary of Etisalat, the third-largest Gulf Arab telecom firm by market value.

The West African country shut down the networks of Atlantique and South Africa's MTN because they did not sign new contracts including a $50 million, 500 % rise in the operator fee by Thursday evening.

Etisalat has 340,000 mobile phone customers in Benin, a country of eight million people.

"We are confident that we will be able to address the questions posed to us by the Benin authorities and therefore shorten the inconvenience for our customers," Etisalat Chairman Mohammad Omran said in a statement to Reuters.

The regulator said the new contracts are needed because both networks had changed their names and operators without its permission.

Benin said the increase would be retroactive, meaning that each company would pay an additional 25 billion CFA francs ($52.58 million) to the state.

Omran said Etisalat rebranded its Benin subsidiary in December 2006 but did not violate any laws.

"We have always operated with due respect to the law in each of these countries," Omran said.

Etisalat, which manages Atlantique under a 15-year contract, expected the loss-making operator to turn its first profits in 2008, its general manager for international business Jamal al-Jarwan told Reuters in February.

The Gulf telecom firm, which also operates a subsidiary in Egypt and has minority stakes in operators in Pakistan and Saudi Arabia, boosted its stake in Atlantique by 20 % earlier this year.

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