The Egyptian firm Orascom Telecom has said it has signed a deal to operate Tunisia's second mobile phone network.

The company said on Sunday that it had paid the first instalment of the licence fee.

On Friday, Tunisia had issued Orascom with a "use it or lose it" ultimatum over the licence, setting it a Monday deadline to sign up to the deal.

The firm had been due to make its first payment in April, but had delayed the process, saying it needed more time to raise the necessary funds.

Payment made

"The first licence instalment of $227m was deposited in Citibank Tunisia to be transferred to the public treasury," Orascom said in a statement.

The company added that the deal was signed with Tunisian Communications Minister Ahmen Friaa.

Orascom must pay another instalment of $227m before the end of the year.

Tunisia was anxious for the Egyptian firm to come up with the money, because it risked losing its second-placed bidder, Spain's Telefonica Moviles.

Telefonica offered $450m for the licence, but after Monday it would have had the right to drop its bid.

Demand backlog

At present, Tunisia's only mobile phone licence is held by state-run Tunisia Telecoms.

It has a network of about 500,000 lines and has ambitions to double capacity.

However, demand for mobile phone lines is far in excess in supply.

While a second operator will introduce an element of competition into the market, officials have also said they hope it will help clear the backlog of applications for new lines.