Lebanon’s Mobile Network Operators (MNOs), Touch and Alfa, recently engaged in an auction to contract A2P (Application-to-Person) messaging providers. A2P messaging involves automated messages sent from applications to individuals, a prevalent tool for notifications, alerts, and promotional content. Opting for an auction brings competitive pricing to the forefront.
As part of the APPLE C initiative (Apply Public Procurement Law to End Corruption), LIMS conducted a study evaluating the outcomes of A2P contracts by Alfa and Touch. Alfa’s adherence to Public Procurement Law through a lawful tender process resulted in competitive bids. This approach attracted cutting-edge technology, superior services, and an impressive $10 million in additional revenues. The law-compliant approach allowed Alfa to secure favorable terms and contribute positively to government revenues. Contrastingly, Touch attempted to bypass regulations, leading to unfavorable terms in their A2P contracts. The study revealed that Touch’s approach resulted in outdated technology and reduced government revenues, despite having more subscribers than Alfa. Attempting to sidestep regulations seemingly backfired for Touch, highlighting the importance of following due process in public procurement.
The APPLE C initiative has underscored the significance of adherence to public procurement laws to ensure the presence of genuine competition. Competition between bidders secures the best outcomes. Alfa’s success serves as a testament to the effectiveness of competitive bidding in driving innovation, technology advancement, and financial gains. Touch’s experience serves as a cautionary tale, emphasizing the potential pitfalls of bypassing established regulations in public procurement processes.
In a second report, LIMS has brought attention to a legal loophole, introducing a concerning ambiguity in the regulatory framework. Rather than subjecting all entities accessing public funds to the scrutiny of the public procurement authority, an imprecise definition has been applied to certain entities, enabling them to navigate around the requirements of the Public Procurement Law. These entities include the Mobile Network Operators, the casino, Middle East Airlines, etc. The consequence of this lax definition is a descent into the depths of corruption and favoritism when it comes to contracts and deals. In light of these revelations, the report advocates for a comprehensive modification of existing legislation to eradicate any ambiguity present in the text.
As Lebanon’s economic landscape evolves, the APPLE C initiative paves the way for fair competition, innovation, and integrity in the industry.