Lebanese Government Plans to Boost Mobile Network Capacities by 80%

Lebanon's Telecommunication Ministry plans to nearly double the capacity of the country's two mobile phone networks to improve their commercial viability. It is hoped that the improvements in service and capacity will make the networks more valuable when they are eventually sold by the government.

The two networks are owned by the government, but operated by MTC Touch and Alfa on its behalf. They are tightly regulated and unable to expand their services without government permission and as a result the two networks are straining under their traffic load with a huge number of potential customers waiting for a connection. The Mobile World notes that the two operators have some 1.28 million customers between them, representing a population penetration level of 32%.

"We have already started ... and this work will continue until we reach the desired target," Roger Najar, the head of the supervisory board in charge of the two companies operating the country's cellular networks, told The Daily Star.

The government has long planned to sell off the networks to private owners, but political turmoil in the country keeps delaying the process.

Lebanon's two operators were originally set up under a 10-year Build-Operate-Transfer (BOT) agreement, back in June 2001, the government controversially cancelled the BOT licenses held by LibanCell and Cellis which were not due to expire until 2004. The government then invited bidders to manage the networks on its behalf, and the concession was eventually awarded to Zain and Alfa.

A plan to sell the networks for around US$3 billion each has been on and off for well over a year.

Lebanon's Telecommunication Minister, Jebran Bassil recently announced that mobile tariffs - reported to be some of the highest in the world - would be reduced. He said that the high call costs are an effective tax on consumers and the government shouldn't be relying so heavily on them in the future. The government earns on average US$1.3 billion a year from the phone networks - equivalent to some 27% of its total tax income.

On the web: The Daily Star - Mobile World

Posted to the site on 31st October 2008