Local start-up Laqtel, the would be mobile provider, intends to sell equity interest to Paltel, a Palestinian based telecommunications company.

The Business Guardian understands an agreement between both companies has been reached after months of courting. Paltel is an affiliate of Palestine Development & Investment Ltd (Padico), a large Palestinian conglomerate whose 2005 profit was $151 million.

Paltel will sign a management technical agreement with Laqtel and is expected to inject a significant amount of money into the cash-strapped company.

Laqtel has already applied to the Telecommunications Authority for permission to sell equity interest in the company.

Since then it has managed to retrench about eight contract workers as it looks to create a leaner, efficient operation said Dr Joseph Laquis, Laqtel founder and consultant.

Laqtel was granted a concession along with Digicel to operate mobile services on December 31 after it bid US$9,300,007 ($58.5 million) for a three-block licence in June.

However, while Digicel has been able to launch after interim interconnection negotiations were reached by an arbitration panel, Laqtel did not.

Laqtel has managed to trump Digicel by signing an interconnect agreement with TSTT last week Friday.

A reciprocal interconnect rate of 45 cents per minute was agreed by both parties.

Even so, the company does not expect to launch until August.

TSTT and Digicel are still before the panel, which has until June 12 to make it final determination in interconnection rates or it could seek an extension.

It meet some setbacks following a “parting of ways” with its partner Saskatchewan Telecommunications International (Sasktel) and financial difficulties.

Sasktel had an option to buy 35 per cent of Laqtel but did not exercise that option which left the company strapped to raise equity.

Laqtel had tried raising some US$80 million to finance the purchase of equipment and the operation of the enterprise and had placed a private equity placement of $97 million in July by Caribbean Money Market Brokers (CMMB).

In September 2005, the company shelled out over US$19 million to acquire Barbadian mobile and Internet company, Sunbeach Communications.

Laquis said that the company had reached 55 per cent completion and with the foreign liquidity injection, hoped to meet its launch date.

He noted that the company has already spent US$32.4 million to enter the local market.

Sasktel’s exit has resulted in interested companies knocking on Laqtel’s door with the Palestine-based company making the most attractive offer.

When the deal is finalised, the company would look to an August deployment of CDMA 2000 and EV-DO.

Laquis declined to go into the details of the agreement but did not deny that negotiations were afoot.

He said he was extremely confident that despite being late in launching, there was still room for an alternative provider and Laqtel would be embraced.