The Palestinian Authority (PA) Tuesday said it had asked the International Telecommunication Union (ITU) to press Israel to release more frequencies for a long-awaited second mobile phone operator.

It wants Geneva-based ITU, which defines and adopts telecoms standards, to urge Israel to release frequencies up to 4.8 MHz, warning it will sustain heavy financial losses unless it obtains them.

The ITU said in a brief statement it had received the Palestinian request.

ITU has asked both parties to cooperate, the body said.

The phone frequency dispute between Israel and the Palestinians has been dragging on for more than two years. As occupying power, Israel controls the airwaves of the West Bank where 2.5 million Palestinians live.

Under an agreement between Israel and the PA signed in July 2008, Israel has to release 4.8 MHz, but so far it has released only 3.8 MHz.

Unless Israel honors its commitments and assigns 4.8 MHz by 15 October 2009, the financial damage to the PA will have serious long-term repercussions, the Palestinian submission said, a copy of which was obtained by Reuters.

Following last year's agreement brokered by U.S. and Middle East envoy Tony Blair, the PA awarded Wataniya Palestine a contract, making it the second mobile phone provider after Jawwal network.

Wantanyia Palestine is owned by Kuwait's National Mobile Telecommunications Co, a unit of Qatar Telecommunications Co, and a holding company for Palestinian public assets.

Wantaniya had hoped to launch its service by October 15 but has threatened to pull out if it cannot have the full 4.8 MHz. In June, the company demanded its investment back unless the frequencies were opened.

COSTS OF WITHDRAWAL

The PA submission to the ITU said that if Wataniya withdrew from one of the largest investments in PA history, the government would lose revenue of more than $354 million in license fees and taxes.

The submission also said that a withdrawal would kill off an investment of more than $700 million over 10 years that would create hundreds of skilled jobs and generate thousands more indirectly.

Wataniya said it would seek the return of $140 million it paid toward its license fee as well as damages for the amount invested in the network.

Israel said it was in both Israel and the Palestinians' best interest for Wantanyia to launch mobile phone services since it would create jobs and lead to an improved economy.

The remaining 1 MHz to 4.8 MHz will take place once the Palestinians fulfill their part of the agreement, said Nati Schubert, the deputy general and head of spectrum management and frequencies at Israel's Communications Ministry.

He declined to say what those commitments were but contrary to recent Israeli reports, they are not related to security.

We have explained to them many times what we expected them to do according to the agreement, Schubert said. We are waiting for them (the Palestinians).

(Additional reporting by Steven Scheer in Jerusalem and Nicola Leske in Geneva; editing by Karen Foster)

Israel