On behalf of my colleagues, I am writing you today to thank you for your business and to share with you our thoughts concerning the difficulties Jawwal is facing.

For over a year, the Israeli authorities have detained our network radio stations (towers and cellular equipment).  These are the towers needed to expand our network and increase the capacity to allow our subscribers to make more calls.  Those towers are Jawwal's private property and they fully conform to all international (and Israeli) communication standards.

The Palestinian market is the only market in the world where there are mobile operators marketing, selling, and promoting for business without having paid for a license.  Indeed, Israeli mobile operators never pay value added taxes for services rendered in Palestine, never invest in the Palestinian market, never employ Palestinians and never invest in the Palestinian infrastructure.  Israeli operators cover Palestine from towers that are placed in the settlements and army barracks.  Obviously, the term "reinvesting in the Palestinian economy" is not on the Israeli operators' agenda.

But Jawwal never gave up.  We faced the illegal Israeli competition with fair prices, superior coverage and improved customer care.  Coupled with full transparency and integrity, Jawwal's vision is based on fair market practices and legal business transactions.

In 2001, Jawwal managed to regain 60% of the Palestinian subscribers that were on the Israeli networks.  That's precisely why on the 29th of October, 2001, the Israeli authorities blocked 7.5 tons of imported cellular stations.

To Israeli operators, Palestinian subscribers are extremely profitable since the Israeli market is now fully saturated and each new Israeli subscriber entails a high acquisition cost.  Israeli operators view Palestinian subscribers as a "cheaper alternative" and the only natural expansion for their business.  So, after the Israeli army destroyed fourteen of our towers, after the army destroyed two of our showrooms, after raiding our headquarters and suffocating our business, the Israeli Authorities decided to block our imports.  Taking Jawwal's equipment "commercial hostages" paves the way for the Israeli mobile operators to gain back the market share that Jawwal worked so hard to achieve.

This has been extremely destructive to our expansion plans.  We had to curb sales in many Palestinian cities.  The lost revenue totals millions of dollars.  Every call you try to make and doesn't go through is a direct loss for Jawwal.  Furthermore, adding customers over the capacity-limit of any network is useless, since these customers do not generate revenue. Therefore, we've curbed our sales activities dramatically.

But we will prevail.  My colleagues are working diligently to keep our network up and running.  We are moving towers from one location to another.  We are focusing on customer service and we proudly emphasize that our call center continued to answer calls during the height of incursions and bombings.  The center remained open twenty four hours a day, seven days a week.

Like all Palestinian institutions, we face the same curfews, closures, immobility, bombings and economic stagnation.  Yet, we've managed to continue to serve over 250,000 users and subscribers.  And, indeed, Jawwal will continue to invest in Palestine.

We remain determined and optimistic.  We also remain at your service. Thank you again for your business and we appreciate the time you took to read this letter.

Hakam Kanafani, CEO
Palestine Cellular Communications LTD., Jawwal
Jawwal@myjawwal.com