Path to privatisation

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

Tags: Oliver Wyman Group
  • E-Mail
Path to privatisation Mahassen A. Ajam remains optimistic about Lebanon’s telco sector.
More pics ›
By  Roger Field Published  July 12, 2010

In 2009, ADSL services experienced a growth of about 63%, with subscriber numbers reaching 130,000 in October 2009, or around 13% of households, with most opting for the 256 kbps download package, according to the TRA.

In the wireless internet sector, the number of subscribers reached 30,000 by October 2009, although the TRA conceded that prices remained the same.

However, in some cases, upload or download speeds of some of the cheapest packages were doubled, and data traffic was slightly increased.

In its 2009 annual report, the TRA also admitted that residential broadband tariffs for low speed services (less than 1Mbps) in Lebanon remained expensive. It stated that Lebanon’s broadband services were ranked among the highest rated Arab Mediterranean countries and were 2.4 times more expensive than OECD countries.

In 2008, the regulator said it planned to hold an auction for technology neutral national broadband licenses and broadband access licenses at the end of the first quarter of 2009.

While Ajam concedes that this target has been missed, she says that the TRA is hopeful that it will succeed in implementing its plans for the broadband sector soon, even though further targets have been missed.

“We were expecting to launch an international auction for broadband licencing at the national level in 2010, allowing them [the winning bidders] international gateway plus fibre backbone,” she says.

But the TRA has so far failed to convince the Council of Ministers “of the validity of such an approach”, according to Ajam. However, the TRA is still working to define a regulatory framework for the benefit of potential investors.

Meanwhile, with only one international gateway controlled by the Ministry of Communications, the sector faces some major problems.

Room for optimism

But despite the setbacks, Ajam is optimistic that the TRA will be able to achieve its goals for the development of Lebanon’s broadband sector.

“We are always very optimistic, we believe that in the interests of the country they [the Council of Ministers] will end up agreeing on some major things to do for the benefit of the market. I think we are close to a decision at this level, at least for the broadband,” she says.

Furthermore, the government’s ambitions to deploy a fibre optic network also give some room for optimism.

Indeed, the government said recently that it was planning to invite international firms to bid for a contract to create a $100 million fibre optic network.

“We need to expand our domestic capacity and in this sense we have finalised the tender documents to deploy fibre inside Lebanon,” telecoms minister Charbel Nahhas told Reuters in April.

Add a Comment

Your display name This field is mandatory

Your e-mail address This field is mandatory (Your e-mail address won't be published)

Security code