New services offered, but costs remain among world's highest

Thursday, November 18, 2004

BEIRUT: Newly appointed Lebanese cellular phone operator Fal Dete Telecommunications (FDT), unveiled a new brand name Wednesday - promising to offer added services but no change in national mobile rates, which remain among the highest in the world.

The network formerly known as Cellis will now be replaced by Alfa, an "elegant, friendly" brand name that will represent "social involvement," with its "warm" red hue conveying the message "that Alfa is there for you," according to FDT head Ineke Botter.

But far removed from the festive mood of FDT's press conference and luncheon, held at the seaside Movenpick Hotel and Resort, was a debate over exorbitant fees, which have fueled a series of day-long cellular boycotts over recent months.

"Tarrifs are not changing for the moment," Botter told reporters. "What I can promise - with our very good management team and staff - is that we will do whatever possible to provide seamless services."

Botter said FDT would boost signal coverage by installing transportable relay stations across the country, in addition to bolstering customer service. But competition between FDT and Kuwait-based MTC, which took over the network formerly known as LibanCell, will largely be compromised by the non-commercial operating environment spawned by the government's inability to privatize telecom earlier this year.

Instead of a liberalizing the sector to allow for price competition, officials opted for four-year operations contracts that would feed sector revenues directly into state coffers with management of each network outsourced for approximately $4 million per month.

On Wednesday, the government said it generated over $1.2 billion in mobile revenues from September 2002 to August 2004, excluding "operating, development and expansion" costs. The government auctioned operation of the networks to the new operators this June after a controversial break up with previous firms that had both enjoyed close ties to top officials.

Despite the comprised environment with all revenues going to the state, Botter said competition would still be feasible in terms of product offerings and services. She said FDT would soon release SMS Roaming, MMS or multimedia messaging services, business to business services and e-charge services allowing purchases via ATM machines. Cellis customers can keep existing SIM cards, she explained, although new cards displaying the Alfa logo would be distributed free of charge.

FDT, a privately held Saudi-German consortium, is mostly owned by Detecon, which is a subsidiary of Deutsche Telekom. FDT will not release profits and Botter declined to say if the firm's monthly management fee paid by the Telecommunications Ministry was subject to increase based on the number of subscribers.

One million new lines are expected to be released on the Lebanese market next year, a move that could curb black market activity and signal a potential drop in prices. But Botter said the black market, which usually stems from a summertime line shortage, "seems to have disappeared," but added that it would be "too early" to speculate on a reduction in tariffs.

Clic, the prepaid Cellis card, will be replaced by Alfa Active, which accounts for 70 percent of the FDT's customer base. Telecom minister Jean-Louis Qordahi said the government paid $580,000 for advertising the two new networks, but this figure has been sharply disputed by Zahle MP George Kassardji. He said the ad campaign would cost the government some $10 million, and criticized the move as unnecessary.

However, Botter said the campaign would bolster brand value, becoming "an asset for the Republic of Lebanon for years to come."

By Habib Battah Daily Star staff

© The Daily Star 2004