Lebanon to get third mobile network

Liban Telecom has confirmed that it will become Lebanon’s third mobile player once the national operator has been set up next year.

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By  Richard Agnew Published  October 11, 2004

Liban Telecom has confirmed that it will become Lebanon’s third mobile player once the national operator has been set up next year. The country’s Telecoms Ministry is expected to re-start its liberalisation plans soon, paving the way for the creation of Lebanon’s regulatory authority and the restructuring of fixed line operator, Ogero. Ogero says it will take up its existing mobile licence when it is re-formed into Liban Telecom in Q205, despite some concerns that there might not be room in the sector for three operators. “We are going to enter the GSM business very soon,” says Engineer Mohammed Hamdan, president and director general, Ogero. “Lebanon currently has 900,000 mobile users but studies say that the market can take over 2 million,” he adds. The move would give the Lebanese mobile market a unique structure with three state-owned operators, unless moves towards privatisation emerge earlier than expected. LibanCell and Cellis, the two existing operators, are managed by third parties but remain in the government’s hands after an effort to sell them came to an end in 2003. The creation of a third player would therefore increase calls for a clear re-commitment by the government to liberalisation and privatisation, analysts say. “There is a solid case for a third mobile operator, subject to the condition that the network is launched very soon, while penetration is low and there is still room for growth,” argues Kamal Shehadi, managing director of Beirut-based Connexus Consulting. “[Also,] as long as ownership is with the government, there will be no competition in the market. Unless there is a genuine commitment to liberalisation and privatisation, it does not make sense,” he adds. Cabinet approval is expected shortly for the Telecoms Regulatory Authority’s (TRA) board membership, structure and remuneration. Hamdan suggests that once it is set up, the TRA could grant the operators more freedom to set their own tariffs. These are currently controlled by the government. “We will have three government-owned operators but they will have different management. [Also,] when the regulator comes in, price [competition] might be opened between them,” he adds. No official announcement has been made about the likely timing of the two current networks’ privatisation, however. Their management contracts — handed to MTC and Detecon in June — were set to last for four years, although the government retains the right to end the agreements with six months’ notice. No short-term plans are in the pipeline to privatise Liban Telecom either, according to Hamdan. “Nothing will happen tomorrow. But within the next year or two, something will. When you add a mobile licence to a fixed operator, it will uplift its valuation,” he adds. Meanwhile, Ogero claims to be close to launching its public data network (PDN), setting the stage for the expansion of broadband services in Lebanon and increasing the country’s available supply of bandwidth. The operator says it is testing the network with various Ministries and aims to launch it commercially within two months. “We have tested it and some spots are using it, such as the Ministry of Interior,” says Hamdan. “Once we have set pricing and the government legalises it, we can launch it immediately,” he adds.

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