Path to privatisation

Lebanon’s telecoms sector remains hamstrung by state ownership, but holds huge potential

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Path to privatisation Mahassen A. Ajam remains optimistic about Lebanon’s telco sector.
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By  Roger Field Published  July 12, 2010

While Kremers says that it is difficult to assess whether the Lebanese government will be able to agree on a path towards liberalisation any time soon, he believes that it is the only rational approach.

“I don’t think anybody with a long term and best interest for the country in mind can honestly say that the current set up should remain in place to drive the development of the country,” he says.

“I think now there is a willingness to change but there is a heavy debate about what that change is and what the different milestones are,” Kremers adds.

Regulatory challenges

Given that Lebanon’s Telecom Regulatory Authority was only formed in 2007, the organisation has made some serious inroads in improving the country’s telecoms sector, and it is probably no co-incidence that the mobile penetration rate of the country has more than doubled since the regulator started to encourage a path towards liberalisation.

But while Lebanon’s mobile sector has improved significantly, a clear timeline for privatisation has continued to elude the country, and rumours have also persisted of disagreements between the regulator and the Ministry of Telecommunications.

These disagreements appeared to come to a head in April, when the TRA’s chairman, Dr. Kamal Shehadi, resigned.

Local press reports suggested that Shehadi believed the role of the regulator was being undermined by Charbel Nahhas, Lebanon’s telecommunications minister.

While Shehadi’s resignation was no doubt a setback for the TRA, the organisation is continuing to lay the foundations for privatisation so that the process can be started as soon as the government gives the go ahead.

Mahassen Ajam, commissioner, board member, head of information and consumer affairs unit, Lebanon TRA, said that the regulator itself is ready for liberalisation, but is waiting for political agreement on the subject from the government.

“For the moment, privatisation of mobile is subject to a political agreement by parties in the country,” she says.

“This is at the Council of Ministers level, and not at the TRA level, we are technically and logistically ready to launch the privatisation within three months, once the political decision is taken by the Council of Ministers.”

Boosting broadband

Given the ongoing disagreements over the decision to privatise the mobile networks at government level, the TRA has decided to concentrate on improving the country’s broadband sector.

“We have been focusing our efforts during the last two years on broadband, and we have developed a clear plan and vision of what is needed,” Ajam says.

At face value, Lebanon’s ISP sector appears to be relatively competitive. It has 16 internet service providers, most of which offer DSL services using the fixed copper network of the fixed line monopoly Ogero, while about four companies offer nomadic services via pre-WiMAX technology.

But despite this apparent abundance of competition, the companies face similar restrictions to the mobile operators in terms of being able to set their own prices and launch special offers.

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