Lebanon's telecom sector is undergoing some very welcome changes. The uncertainties shrouding its prospects have receded, and it finally seems that the government and telecom operators are working together.
To learn more, Gulf News recently spoke to Mohammad Fouad Hamdan, chairman and chief executive officer of Ogero, the Lebanese operator.
Ogero Organisme de Gestion et d'Exploitation de l'ex Radio Orient was established in 1972 to manage and operate the telegraph and submarine tele-communications of Radio Orient.
It is 100 per cent owned by the Lebanese Government, and acts under the supervision of the Ministry of Telecommunication.
Ogero's role today includes the operations, maintenance, sales, marketing, billing and management of the Ministry of Telecommunication's fixed network in Lebanon.
Gulf News: There has been so much confusion over the issue of new licenses in Lebanon. Has this situation been cleared?
Mohammad Fouad Hamdan: The current situation concerning the issue of new licences in Lebanon is that the Council of Ministers has issued a decree establishing the regulatory authority. However, the five-member commission is yet to be appointed.
A clearer picture will emerge after this board is constituted. This will send the right signal to the markets, about where the telecom sector in Lebanon is headed.
As the regulatory body, what will be your primary targets in 2005?
Lebanon is strongly committed to modernising and upgrading telecom services across the country, in keeping with international developments.
The regulatory authority has a mandate to implement the Telecommunications Law 431 (2002), which calls for the opening of the sector to competition with the goal of providing Lebanon with world-class infrastructure and telecom services at competitive prices.
This will lead to reductions in rates for some telecom services, including mobile phones, international voice and international leased lines.
Further, the regulatory authority will advise the Government of Lebanon on the issue of privatising the three networks that it owns (2 GSM and 1 fixed).
It will also examine the possibility of merging one of the GSM networks with Liban Telecom, driven by the fact that there can be no competition between service providers unless the ownership and management of each company are separate from the other.
However, the Telecom Regulatory Authority assumes only an advisory role, since the decision to privatise lies with the government of Lebanon.
The government's decision in this regard will affect the structure of the market and the competition therein.
The regulatory authority will also be issuing licenses for the operating telecom companies, including the regularisation of existing licenses in order to become compliant with the new regulatory framework.
The other functions of the regulatory authority will include issuing of licenses to broadband service providers, preparing a new radio frequency allocation table in order to open new frequencies for the new services, regulating quality of service for licensed providers of basic telecom services and monitoring them in competitive markets.
Will liberalisation in Lebanon's telecom sector extend to the fixed line business as well? Have you set a date?
I believe liberalisation of Lebanon's telecom sector would extend to the fixed-line business. No date, however, has been set, although the law stipulates a time period of no more than 5 years for full implementation.
However, the regulatory authority will have to study the market, the performance of service providers and assess the government's commitment to privatisation, before deciding on the appropriate course of action.
How do you see the viability of the operators in the mobile phone services area?
The mobile service providers are clearly very profitable and have been so, for the last 10 years.
With market penetration at around 22 per cent of the population and further potential for growth, I think there is a definite place for a third licensed mobile service provider. This will make the mobile phone market more competitive and rationalise the pricing factor.
We would like your comments on the pricing mechanism that will be followed by the various operators. Will these be overseen by the regulatory body?
The regulatory authority has the mandate to regulate the rates charged by service providers in markets where competition is limited. Once the regulatory authority is established, it will decide on the appropriate price regulation regime.
Nevertheless, it is certain that the regulatory authority will have to follow internationally recognised principles and processes for regulating the sector.
Lebanon is aware that investors in telecommunications will look for regulations that are in harmony with the regulations adopted all over the world, as well as in the region.
Will you be overseeing the ISP side of operations as well?
ISPs are telecom service providers, and will fall under the scope of the regulatory authority. However, ISPs will not be heavily regulated, as the ISP market in Lebanon is very competitive.
I would qualify all these answers by saying that the regulatory authority will have to decide on all this, once it is established.
Gulf News
