A Diamond’s Eye View of the World

a multi-faceted look at the middle east, and the middle west

“I have better connections than you”: the Daily Star on the platinum numbers auction

Posted by adiamondinsunlight on October 12, 2008

Its house-cleaning day at A Diamond’s-Eye View of the World, and I’ve run across a few blogs I meant to finish and post earlier. Here’s a follow-up article on the “platinum” mobile phone numbers auction which I blogged about last week, published in last weekend’s Daily Star:

An auction of so called “platinum” MTC Touch phone numbers in Beirut over the weekend raised more than $2.5 million in two hours.

Friday night’s sale at the capital’s seaside Movenpick Hotel, held under the auspices of Telecommunications Minister Jebran Bassil, was the first of its kind in Lebanon. The highest price, of $450,000 for the number 70-707070, was pledged by an anonymous bidder.

[Well, “anonymous” to those who did not already read about the auction in Al Akhbar, I suppose.]

Alternatively described as “distinguished” or “vanity” numbers, some 33 catchy combinations were auctioned off to more than 100 bidders who had each paid $200 merely for the chance to bid. The starting prices ranged from $6,000 to $150,000. Numbers were designated as platinum, gold, silver or bronze according to whether or not they conform to certain easy-to-remember patterns.

After delays caused by cigar smoking,hors d’oeuvre-nibbling and photo-snapping, the overwhelmingly male crowd settled into the large air-conditioned hall, and the auction finally began an hour late. Bassil greeted the guests, the auctioneer read off the rules, and a long-haired brunette trotted out holding a large cardboard with the opening lot, the number 70888888.

It went for $170,000, to the sound of whistles and applause.

As cameramen scrambled to photograph the winning number and its accompanying brunette, the auctioneer seemed to momentarily forget what was at auction, announcing: “We have many more ladies as beautiful as this one.”

[This anecdote, not to mention the list of reasons why the auction started late, more than make up for the Daily Star‘s decision to omit the names of the buyers. The Akhbar article was nowhere near this funny.]

At every turn, the auctioneer reminded bidders of how beautiful the numbers were, and that they were “very cheap,” even as prices soared into the tens and hundreds of thousands of dollars. Midway through the bidding, in an attempt to further loosen purse strings,he cited last month’s record-setting Qatari sale in which $2.75 million was paid for a single number. The majority of the numbers sold on Friday went for between $25,000 and $45,000.

Bassil told reporters afterward that the revenue generated would be used to promote a cleaner environment by investing in solar energy, as well as to lower call rates for existing mobile phone users. He told The Daily Star that ordinarily these 33 numbers would have been worth $18,000 on the regular market, and that he hoped Lebanon’s other mobile phone operator, Alfa, would soon follow with an auction of its own.

[Interesting: according to Bassil, those numbers were worth an average of $545 on the “regular market”. I paid around $50 for my line when i bought it from MTC – why would these have cost so much more?]

Gilbert Najjar, head of the Owner Supervisory Board (OSB) at the Ministry of Telecommunications, who organized the auction, said the intention was to recapture the lucrative black market for these prestigious numbers and ensure the state received the revenue, rather than speculators.

“The minister wanted to try to grab part of that market and divert the funds, in his words, to a better ‘mobile environment,'” Najjar told The Daily Star, referring to plans to expand and improve the quality of the mobile network.

[“If you can’t beat ’em, join ’em.” :)]

Funds for a proposed expansion project that would erect more relay towers across the country have already been approved by the OSB’s capital expenditure committee, according to Riad Bahsoun, a telecommunications consultant with the Geneva-based International Telecommunications Union, an arm of the United Nations.

Bahsoun believes that the auction’s main purpose was not to raise funds, unlike in some of the Gulf states where similar events have raised millions for charity, but rather as a corrective measure against the corruption and nepotism that formerly clouded the telecommunications industry.

Up until a few months ago, he said, people close to powerful politicians were given packages of up to 20 numbers to sell off at large profits on the black market. With this auction, Bassil is apparently hoping to illustrate that these days are a thing of the past.

“He wants to finish with that and tell users that if they want ‘beautiful’ numbers, let’s auction them off, and whoever wants to pay … will have them.

The auction is a message of transparency, neutrality, and good governance, and nothing more than that,” Bahsoun said.

[I’m all for transparency, neutrality, and good governance – but this auction seems to have been about wealth and spectacle as well.]

Similar auctions have taken place over the last few years in Pakistan,Taiwan, China, and India, either live or online. Friday’s auction was the first in Lebanon, and will be followed by the region’s first-ever online auction, scheduled to open Wednesday on MTC Touch’s website.

Lebanon’s telecommunications sector generates around $1 billion annually, accounting for between 20 and 30 percent of the government’s total revenue.

Nadim Khater, chief commercial officer of MTC Touch, took a lighthearted view of Friday’s auction. Asked what he had learned, he told The Daily Star: “For every product, you have a customer,” and laughed.

Businessman Abdul Rahman Bandakji, 40, said he bought 11 numbers as an investment with his brother. He was confident that the numbers would resell for far more than what he paid for them. The rules of the auction require that the numbers be held in the winning bidders’ names for a year, after which point they can be resold.

“If anything, keeping it for a year will raise the price even higher,” he predicted, thumbing through his pile of flimsy, movie ticket-like receipts.

“Believe me, it’s easy to resell,” he continued, winking.

“They will search for me, I will not have to go after buyers.”

“People are as much hooked on mobile numbers as on license plates,” said Najjar. “If you look at the market, you’ll understand readily that there is a demand.”

In case you’re still wondering why, one attendee, Fabio Khoury, offered an explanation.

“When someone asks for your number, an easy number says to other people: ‘I have better connections than you,’ he explained. Or perhaps simply more money.

Food for thought … 🙂

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One Response to ““I have better connections than you”: the Daily Star on the platinum numbers auction”

  1. […] by adiamondinsunlight on November 7, 2008 Its been three weeks since I last posted about the Telecommunications Ministry’s auctioning of “platinum numbers” – three weeks in which the Ministry has evidently been hard at […]

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