launch of Wataniya Telecom mobile service depends upon further timely fulfillment of commitments by government

In a meeting of its Board of Directors, Wataniya Mobile (WM) confirmed that launch of its mobile service depends upon further timely fulfillment of commitments by government to supply necessary radio spectrum. WM has substantially completed construction and commercial preparations for its West Bank mobile network designed to provide the people of Palestine with much needed competition. WM's shareholders have invested over US$270m in Palestine to provide state of the art service.

In order to meet its October 15, 2009 planned launch date, WM has informed the Palestinian Ministry of Telecommunications and Information Technology (MTIT) that the necessary frequencies must be allocated by September 15, 2009. The MTIT has been further informed that WM must actively pursue financial remedies if the agreed minimum spectrum commitments are not kept within the planned launch schedule.

WM was promised necessary radio spectrum by the Palestinian Authority (PA) under the terms of WM's 2007 license, and commitments for a minimum frequency allocation of 4.8X2 MHz were confirmed in a 2008 agreement between the PA and the Government of Israel (GOI). The GOI recently announced support for an initial allocation of 3.8X2 MHz, less than the minimum required for commercial viability and less than the amounts previously agreed.

The Company already employs over 200 people directly, and WM expects the project to lead to 3,000 indirect jobs.
WM's Board has expressed its disappointment with the lack of timely spectrum allocation, especially after their repeated efforts to accommodate delays and the interests of respective governments.

Representatives of The Quartet and US Government, multilateral and European Union agencies have championed efforts in support of the minimum spectrum committed in the 2008 agreement. WM's Board is grateful for the past and continuing support. WM's launch of mobile competition has been widely anticipated as part of efforts to stimulate economic development in Palestine, and as a sign of the potential for foreign investment.

In the event that minimum radio spectrum is not allocated to meet the launch schedule, WM must pursue remedies which may include demands for refund of its license fee payment and other damages.

Speaking on behalf of the Board, Chairman Dr. Mohammad Mustafa, said "WM has demonstrated a deep commitment to developing the economy of Palestine and improving the lives of the region's people. This project is not only important for Palestine but for the international community. A final, timely effort of the region's leaders can make the project a reality."

Aug 23,2009