Towards a Unified Arab Charter Internet: Regulations and Communications Dr. Kamal Shehadi Chairman/ CEO Telecommunications Regulatory Authority February 24-26, 2009 InterContinental Phoenicia Hotel, Beirut, Lebanon

2 Efforts to build a solid information society should encompass the following E-services: e-government, e-learning, e- procurement applications, e-commerce Broader Legal ReformsE-Legislation Law Enabling Telecommunications Market / Infrastructure

3 Although reform has started with the establishment of the TRA, most telecommunications markets in lebanon are stagnant and suffer from lack of competition Current Indicators 35%Mobile Market Fixed Market Internet Market ADSL Market 2 PenetrationNumber of SP Private / State- owned Level of Competition State-OwnedMonopoly 63% (*) 1State-OwnedMonopoly 32.5% (*) ~ 16PrivateCompetition ~ 7.7% (*) ~ 8MoT / Ogero Private (bitstream, line sharing) Limited Competition (*) per household

4 Pent up demand for Mobile services High Mobile revenues High charges Lag behind in terms of new technologies Low market penetration Limited choice in mobile bundled tariffs packages Shortage of adequate investments Relatively competitive Lucrative segment New wireless technologies deployed Pent-up demand for data and internet services Shortage in international bandwidth Access controlled by the MOT High intl bandwidth prices, and non optimal allocation of bandwidth among providers Incomplete Regulatory framework Fixed Voice Relatively good copper infrastructure Regionally competitive price per minute De jure MoT monopoly Low incentive to upgrade the infrastructure and introduce new technologies Low penetration rate Stagnant growth The TRA has assessed the strengths and opportunities of the telecommunications market in its reform and liberalization process StrengthsWeaknesses Mobile Data High pent-up demand and important growth potential in all telecom markets Appropriate Regulatory framework to attract investors. Consumer behavior: Early adopter of telecom services. Opportunities

Further to the consultation process, the TRA is minded to propose in its Liberalization Roadmap the introduction of competition across all telecommunications markets while allowing LibanTelecom exclusivity over some services for a limited period of time MobileNetwork Operator Virtual Network MNVOs PSTN/ Basic Telephony Network Operator Reseller and VoIP Broadband Access National (core, metro and access) International Gateway Voice and Data Facilities Based Provider Data Only Facilities Based Provider Voice and Data Resellers 3 *** * The privatization of the mobile sector will depend on the regional and international financial markets conditions ** Two mobile operators and Liban Telecom *** Two mobile operators and Liban Telecom **** Two National Broadband Licenses, subject to CoMs decision License Award Open licensingMarket Review Notes **** *** ? ? 5

6 Table Broadband Roadmap National Broadband Licenses (NBLs) with: Rights to build/offer (fixed and spectrum based) Access, National Backbone and International network/services Obligations to meet access and national backbone rollout conditions with minimum build for fiber Exclusivity period to interconnect new sites of other BAL providers via its national backbone Broadband Access Licenses (BALs) : National or regional With or without spectrum, Existing Data Service Providers continue to use their national Microwave backbone to backhaul existing sites BALs originally rely on the NBLs for new site connectivity The TRA plans to issue two types of Broadband Licenses Broadband Deployment Timeline Broadband Policy Statement Spectrum Re-farming & RTU fees ROW & Duct s Decree Draft RFA for Consultation (including BB License) NBL Auction Jan 09 July 09December 09

7 TRA plans to issue licensing through an international Public auction in order to establish across Lebanon, best in class core, Metropolitan, and access networks Currently the Only provider of National Internet and Data Transmission Needs major upgrade of National and International capacity Allow CS/CPS whenever the market permits Fixed MoT Infrastructure Provide a best in class alternative National Networks (core, metropolitan and access), enabling the National Transmission of Data and provision of High Speed communications National Broadband Licenses Unleash competition on the access level and provide more choices to consumers ( including by incumbent data service providers) Broadband Access Licenses competition

8 Licensing of the NBLs will provide Lebanon with leading edge technologies and applications ApplicationsApplications Personal Services High Speed Internet Access (1 MB and above) Multimedia Govts. Public services E-governance E-education Tele-medicine Commercial services E-commerce Corporate Internet Videoconferencing IPTV VoIP Video and Entertainment services Broadcast TV Video on Demand Interactive gaming Music on Demand Online Radio TechnologiesTechnologies Existing Infrastructure DSL over copper loop Cable Modem over Cable TV network New Infrastructure Fiber to the x ( FTTx) Hybrid Fiber Coaxial ( HFC) Wireless Infrastructure Fixed wireless Access ( FWA) Wireless Lan ( Wi-Fi) IMT 2000 ( 3 G- Mobile) High Speed WLL.

The regulatory framework and the public consultation process adopted by TRA aim at ensuring the success of liberalization Spectrum Management and Licensing Regulation Drafting StageDraft Ready StageConsultation Stage Final Review (TRA Board) Issued Type Approval Regulation Accounting Separation Regulation Spectrum Pricing Opinion Consumer Affairs Regulation Significant Market Power Regulation Unbundling Regulation Broadband Policy Statement Lebanese National Frequency Table Liberalization Roadmap Licensing Regulation Licensing Regulation Interconnection Regulation Decisions: VSAT, Trial IPTV Spectrum trial Allocation for MoT / OGERO Decisions: VSAT, Trial IPTV Spectrum trial Allocation for MoT / OGERO VOIP Policy Statement Pricing Regulation National Roaming * Interconnection Interim Pricing Decision Spectrum Refarming and Packaging Plan Quality of Service Regulation Decision for establishment of call centers Universal Service CS / CPS Improving FM Broadcasting * Decision approved by the board, but will be issued concurrently with the Mobile Auction Award. Numbering Regulation Numbering Regulation Access to Information Regulation Digital Migration Strategy for TV Broadcasting National Numbering Plan 9

10 Broader legal reforms must be taken into consideration in order to create an environment condusive to the growth of ICT The Code of Civil Procedure ( المدنية قانون أصول المحاكمات ) issued by virtue of the Legislative decree No. 90 dated 16/9/1983 (and its amendments) should be amended in a way containing a stipulation about electronic proof in addition to the written and other proof means mentioned in the chapter related to proof issues (articles 143 and the following…) Code of Obligations and Contracts ( قانون الموجبات والعقود ) issued in 1932 and particularly the part related to contracts (articles 165 and the following) should be reviewed as follows: - Article 179 related to the acceptance of an offer should be amended in way including a statement authorizing the acceptance of the offer via electronic means. Article 184 and 185 related to negotiations (draw-up contracts) should be amended in a way including a statement authorizing negotiations (draw-up contracts) via electronic means. Code of Commerce: -Convocation Procedures (article 193) : Convocation should be made easy so as to encourage meetings to be held: We should aim, even if under strict conditions, at allowing convocation by (1) facsimile telecommunication, (2) and electronic mail. -Right of shareholders to have access to documents (articles ) by electronic ways. We should aim at allowing Visio conferencing in order to facilitate the participation of the largest possible number of shareholders at the meetings.

11 Lebanon's commitment Bring the country back to the international telecommunications scene through market liberalization Reconnect the Lebanese population with the world by building a thriving, innovative, and competitive telecommunications market place, driven by a technologically advanced infrastructure-based sector and offering services at internationally competitive prices and quality Promote the interests of telecom Lebanese consumers in the market to make sure they are getting good quality of service at affordable and competitive prices and that their right to safe, secures and confidential access to telecommunications is safeguarded