BEIRUT: New mobile companies expressed interest in bidding for the operation of the Lebanese cellular network, Telecommunications Minister Boutros Harb said Monday. “I have seen, within the framework of my visits to Dubai, South Korea and China, a great interest by some mobile operators such as Saudi Telecom, Orange, Zain and Etisalat to participate in the next bidding, which will take place in a few months for operating the cellular network in Lebanon,” Harb told The Daily Star in an exclusive interview.
Harb stressed that some Lebanese political quarters did not believe that international mobile firms would have any interest in operating in a small market like Lebanon.
“They [companies] surely have a great interest in operating the Lebanese telecom sector for two years because this will allow them to get acquainted with this sector and hence increase their chances of participating in its privatization later on,” he said.
In October Harb extended the contracts of the two current mobile operators, Kuwait-based Zain’s touch and Cairo-based Orascom’s Alfa, for six months to give the Telecommunications Ministry ample time to hammer out new terms and conditions for the next bidding process.
Harb said he had already completed the new terms and conditions, adding that they were slightly different from those adopted by former Telecommunications Minister Gebran Bassil.
“I had already completed the new terms and conditions by keeping those adopted by Bassil and doing only a minimal and necessary change with regard to incentives given to mobile operators, but he rejected them, saying that he changed his mind about them,” Harb said. “I believe that the reason is political.”
Harb said that one of Bassil’s arguments is that the new terms and conditions would exclude small companies from the bidding process.
“But what we really need are big companies that add value and solve our technical problems without being affiliated with any political group,” Harb said. “Small companies won’t be able to work independently because they want to ensure their survival in the market.”
Harb said that he would hold a meeting this coming Friday headed by Prime Minister Tammam Salam in the attendance of State Minister Mohammad Fneish and Foreign Minister Bassil to try and agree on a formula for the terms and conditions.
Harb believes that the best solution would consist of completing the next bidding process and having two new mobile operators manage the sector for two years until Law 431 is properly implemented.
Law 431 of 2002 stipulates the establishment of Liban Telecom, through merging the operations of Ogero (a government-owned contractor) and two directorates of the Telecommunications Ministry. According to Law 431, Liban Telecom would be an integrated telecoms operator providing services which include fixed and mobile telephony, local and international communication, voice and data access, pay phones, emergency call services, and dial-up and printed directory information services.
Harb explained that with the establishment of Liban Telecom, the government would bring a strategic partner with advanced technical capabilities, such as Vodafone or Orange S.A., with an ownership right of 40 percent, which would motivate the other companies to compete with the national company in providing better quality and prices.
“This is a very important step to improve the performance of this sector,” Harb said, while arguing that previous ministers refrained from taking this step because it limits their power and gives more authority to the Telecommunications Regulatory Authority over the telecoms sector.
Harb said he prefers that board members for Liban Telecom be selected based on professional criteria, which is not possible for the time being. “I prefer to either appoint people based on their professional capacity and skills or not to implement the whole project,” he said.
Regarding the slow Internet connection in Lebanon, the minister argued that he is trying to launch the fiber optics project, which would increase the speed connections in a remarkable manner.
The fiber optic network would enable the country to finally catch up with the rest of the world and offer globally competitive Internet speeds and packages. The installation of the new fiber optics would dramatically increase the traffic load, distribution and reliability of the network.
“The project was delayed because it was implemented in a very bad way in some areas so I demanded that all the flaws be fixed before proceeding again,” he said.
Harb acknowledged that the project is very expensive and costs between $500 million and $1 billion. “But there is no other way to improve the Internet connection,” he said.
Harb added that he had already installed more active cabinets in various Lebanese areas, devices which aim at improving the Internet connection. “But they definitely cannot replace the fiber optics,” he said.
Harb also emphasized the importance of organizing the work of Internet service providers and data service providers. He explained that ISPs are asking for more E1 lines than what they actually need.
“We found out that some ISPs have been buying the E1 from the government at $300 and selling it at $900 to mtc and Alfa, which are owned by the government,” he said. “This means that they are are selling it at $300 and buying it again for our companies for $900, which is not normal at all.”
