1. Status and Real Potential
Lebanon ICT Market
Status and Real Potential
Lelia EL KHAZEN
Market Analysis Manager
Market and Competition Unit
Telecommunications Regulatory Authority – Lebanon
ITU workshop
Sharm el Sheikh
June 8, 2012

2. Status of the Telecommunications sector
Outline
Status of the Telecommunications sector
Potential to Go: Broadband as a booster for the National Economy
Regulatory and policy tools
18 September 2018

3. Status of the Telecommunications Sector
18 September 2018

4. Operators (Incumbents and New Entrants)
The enactment of Law 431 in 2002 and the establishment of the TRA in 2007 paved the way for telecom sector reform
Before Law 431
After Law 431
MoT
Ministry of Telecommunications: policymaker, regulator and service provider
CoM: Arbitrary regulatory role (e.g. issuing all licenses)
No formal regulatory regime
MoT: Policymaker
Sets general guidelines of the telecom policy
Decides on international representations
Approves:
TRA recommendations on individual licenses
Frequency pricing
TRA annual budget
TRA: regulator
Drafts and implements regulations
Awards licenses
Ensures competition
Prevents anti-competitive behavior
Manages radio frequency on behalf of GoL
policymaker
regulator
operator
Operators (Incumbents and New Entrants)
Provides telecom services to the public
Installs, owns & manages telecom networks & facilities
Abides by TRA rules, regulations and license terms
1st June 2012

5. Although reform has started, Mobile & Fixed telecom operators in Lebanon are state-owned and the market requires “competition”
AS OF MARCH 2012
Penetration
Number of Service Providers
Private/State-Owned
Level of Competition
Mobile Market
83% 2
State-Owned
Duopoly
Fixed Market
64%
(Residential Household Penetration) 1
Monopoly
Internet Market (incl. illegal operators)
30% 16
Private
Competition
Fixed Broadband Market
27%
(Household Penetration)
~7 for ADSL services ~16 for wireless services
Private through MoT Local Loop / Ogero
Limited competition
Mobile Broadband Market
13%
18 September 2018

6. The mobile sector is comprised of 2 state-owned networks operated under private management agreements; A structure with no true competition stifles innovation
Mobile Penetration Evolution
Major milestones:
Consecutive decreases in prices since March 2009 for postpaid, prepaid and VAS
New prepaid offers introduced in June 2011
3G services launched in October 2011
Achievements:
Penetration rate increased by 50 percentage points since 2008
Mobile broadband penetration reached 13% in 5 months only
ARPU decreased by 45% since 2008 to reach an average of USD 39 in 2011
Bottlenecks:
Despite the decrease in ARPU it is still considered high compared to the regional average of USD 15
Quality of Service is not up to international standards
Introduction of advanced and competitive services and offers is slow due to the structure of the sector
Mobile Subscribers Evolution (in thousands)
Blended ARPU Evolution
1st June 2012

7. With the expansion of DSL services, there has been an increase in demand for new “fixed lines”, Consumers await the introduction of bundled & IN-based services
Some Indicators:
Total number of PSTN subscribers as of March 2012: 855,000
Fixed line residential household penetration is ~64%, increasing by 2 percentage points since 2010.
The penetration rate of fixed services in Lebanon is higher than other countries with comparable GDP per Capita (for example Jordan’s Penetration rate per population is 8% while for Lebanon the fixed penetration per population is 21%)
Major Milestones:
Decrease in fixed line installation rates in 2009
Continuous Growth in DSL subscribers: major growth since the introduction of high speed packages in Oct 2011)
Geographical expansion of DSL in 170 Central Offices
Bottlenecks:
Current service offering lacks bundled services, self -selection schemes, NGN services and Intelligent Network (IN) Services
Illegal VoIP services are widespread despite large international call tariffs cuts by MOT
High Cost related to management and maintenance of current outdated PSTN network
18 September 2018

8. Good efforts are underway to correct the situation
Required speeds for triple or quadruple play services are still much higher & prices much lower than the ones currently available
Good efforts are underway to correct the situation
Lebanon DSL services were previously priced well above the regional prices; however with the decrease in DSL prices in October 2011, Lebanon is now very well positioned when compared to Arab countries
With decree 6297 (Sept 2011), an entry package of 1Mbps speed is now offered at a price 70% lower than the previous 1Mbps offer and a usage that can go up to twice the previous one.
Service Packages available in Lebanon
(Since Oct 2011)
Typical Triple Play Service Packages
Residential
For around $46/month individual subscription to:
$16 for the basic entry plan of 1Mbps downlink with a cap of 4 GB (most used DSL plan)
$15 for very poor quality cable TV subscriptions
$15 for very low usage of Fixed Voice services
Residential
For around $40/month :
On average 8 Mbps downlink and 4 Mbps uplink with virtually no cap on usage
High speed Internet Access video Channels (including 1 HD) + unlimited VoIP calls
Business
For around US$ 4000/month:
Business
For around US$ 500/month:
Up to 10Mbps for business located in remote areas
High speed Internet Access viable for video conference, e-commerce, etc…+ 100 video Channels (including HD) + unlimited VoIP calls
2 Mbps download and 1 Mbps upstream Internet access
With Service Level Agreement
1st June 2012

9. Since the launch of DSL in June 2007, this market faced a lot of bottlenecks hindering the wide adoption of true broadband services
Anticompetitive behavior from the incumbent
Incomplete Reference Access Offers
Unfair access to Central Offices
No switchover procedures
DSPs not connected to all ISPs
Unavailability of a true high speed and a high capacity National NGN Backbone Network
Limited fiber optic coverage
Current expansion and modernization of PSTN national transmission network to lay- down a fully meshed fiber optic network of 4,400 km of backbone is underway
Saturated transmission network despite the latest upgrades
DSPs and ISPs are still connected by a maximum of 100 Mbps network ; there are no wholesale backhaul bundled offers
Lack of International Capacity
Despite the latest increases in international capacity and the major decrease in prices, the distribution of international capacity to the private service providers requires more transparency and fairness
Only 20% Line Sharing
18 September 2018

10. Potential to Go Broadband as a booster for the National Economy
18 September 2018

11. Higher Speed / More Bandwidth
Next Generation applications and advanced e-services
enrich consumer lifestyle, improve business performance and deliver value for stakeholders
Virtual Reality
Tele-presence
Interactive signboards
Virtual sports
Interactivity Level
Tele-medicine
Social Networking
Rich media
Quality Video Streaming
Tele-learning
VoIP
Interactive IP-TV
Next Generation TV
Browsing
Video Conference
Kbps
512 Kbps - 2 Mbps
20 Mbps – 1 Gbps
Higher Speed / More Bandwidth
Narrowband
Actual Generation of Broadband
Next Generation of Broadband
PSTN, GSM, GPRS/EDGE
DSL, WCDMA, HSPA+, WiMax e, etc.
FTTx, LTE Advanced, Wimax m, GPON, etc..
1st June 2012

12. Broadband an Economic Booster
Broadband is uniquely positioned to stimulate economic growth, business development and social welfare
GDP GROWTH:
1.38% increase per year for every 10% point increase of Broadband Penetration
Job Growth:
0.25% increase in jobs for every 1 point increase in Broadband penetration
Social Inclusion:
Boost human capital
Improve healthcare
Create new income opportunities in the poor and remote areas
Broadband an Economic Booster
Business Productivity: Lebanese SMEs waste thousands of hours a year due to poor connection – to illustrate: 5000 hours a year represent a loss of US$ 250,000-US$ 500,000
Fiscal Returns: 90 million USD per year for every 10% point increase of Broadband Penetration
Brain Drain: less youth migrate overseas with Lebanon as a hub for communication
Government Revenues: new sources of revenues to the GoL will be generated (auction proceeds, RTU fees, RoW fees, revenue sharing …)
Sources: Economic & Fiscal Impact of Introducing Broadband Networks and Services in Lebanon – World Bank 2009
18 September 2018

13. The digital divide between Lebanon and the MENA region is particularly deep in terms of environment, infrastructure and government usage
MENA
Lebanon
Adv. Economies
18 September 2018
Sources: World Economic Forum 2012

14. Lebanon still suffers from important weaknesses in terms of ICT development that hinder its capacity to take full advantage of the benefits accruing from the deployment and use of advanced technologies
Pillars
Lebanon’s Value
Scale
Lebanon’s Ranking
Number of countries
Accessibility of digital content
4.5
1-7 94
142
Internet and telephony sectors competition
0.67
0-2
131
138
Households with personal computers
31.7%
N/A 72
140
Internet access in schools
3.8 85
ICT use and government efficiency
2.5
Impact of ICT on access to basic services
3.1
136
E-participation index
0.27
0-1 44
Sources: World Economic Forum 2012
18 September 2018

15. Regulatory and Policy Tools
18 September 2018

16. and an ICT development strategy
Aspirations towards a knowledge-based economy should focus on two main ICT policy areas: liberalization of the telecom market
and an ICT development strategy
National ICT Strategy and Policy
Liberalization
Telecom Policies
Sector Governance & Regulation
National coordination
Cross Sectorial vision
Corporatization of LT and Mobile networks
SMP, Cyber security, Net Neutrality, etc.
Promote digital Literacy, develop on-line content, e-commerce
E-education, E-health, Smart grid, E-gov, transportation
LARGE TALENT POTENTIAL
Availability of a large, young population
Develop strong local talent pools
Increased enrollment into high education and focus on training
Economic Diversification and Growth
Innovation and Productivity
Access to Education and Healthcare
Government Modernization
Social Equity
Environment Safeguard
National Competitiveness
Sustainable development
ICT Industry Development
1st June 2012

17. Reliable & Advanced TELECOM infrastructure
The development of the ICT sector in Lebanon is hindered by a slow decision making process and a lack of consensus on the current
policies and laws as well as future directions
Barriers to the ICT Sector development
Users
Applications
& CONTENT
services
Reliable & Advanced TELECOM infrastructure
Availability
Usage
Affordability
Lack of political consensus regarding the Telecom Law 431
Very low government engagement in the enactment of modern laws and policies
Absence of a overarching economic vision
ICT-focused activities within the government institutions are not integrated in a way to fully harness ICT potential in Lebanon
ICT MAIN
ENABLER
1st June 2012

18. HEALTHY AND FAIR COMPETITION
The liberalization of the telecom sector requires the elimination of existing bottlenecks and the development of competition within an enabling regulatory framework
Main driver for infrastructure based competition
Infrastructure based competition
Healthy and fair competition
Complete the corporatization & subsequent licensing of Liban Telecom
Enforce Regulation on Service Providers with SMP
Open access regime on essential facilities owned by dominant players (local loop, backbone, etc…)
Access to Public Property & Rights of Way (duct sharing reduces around 70% of the cost of laying fiber)
structural separation between wholesale and retail segment of vertically integrated players
Ensure infrastructure based competition
Abundant national and international capacity
High grade of services
Competitive prices LT
NGN networks
Mobile Licensees
Long term licenses to ISPs and DSPs
MVNO
Ensure service based competition
HEALTHY AND FAIR COMPETITION
Create a healthy corporate structure (in terms of human and financial resources)
Reinforce position on the market
Increase value on the market
Pave the way for a healthy retail versus wholesale corporate identity
1st June 2012

19. Since its establishment, TRA has been working extensively on setting a regulatory framework that would ensure successful telecom sector development
Drafting Stage
Draft Ready Stage
Final Review after consultation
Awaiting Board approval
Sent to MoT – Need to transfer to State Council
Issued
Access to the Local Loop Regulation
VOIP Policy Statement
Spectrum Refarming and Packaging Plan
Access to Information Regulation
Licensing Regulation
SMP Regulation
Spectrum Management & Licensing Regulation
Decisions:
VSAT,
Trial IPTV
Spectrum trial Allocation for MoT
Interim licenses for ISP and DSPs (+ extension)
Licenses for Trisat, LCNC and MADA
National Roaming
Liberalization Roadmap
New building Requirements for BB delivery services
Accounting Separation Regulation
Broadband Licensing Plan
Consumer Affairs Regulation
Digital Migration Strategy for TV Broadcasting Plan
Universal Service
Technical requirements for NBCLs
Class and Frequency License fees regulation
CS / CPS
Pricing Regulation
Improving FM Broadcasting
Interconnection Regulation
Interconnection Interim Pricing Decision
National Numbering Plan
Sent to MoT- Need CoM decree
Type Approval Regulation
Numbering Regulation
Study on the Use of Public Property
Emergency Communication Plan
Quality of Service Regulation
Code of Practice for VAS
Draft RTU Fees & SAC decree
Decision for establishment of call centers
EMF Regulation
Rights of Way Draft Decree
Lebanese National Frequency Table
1st June 2012

20. Sustainable policy and empowerment of the TRA are essential to ensure successful telecom/ICT sector development and highest benefits to all stakeholders
Investors
Investment opportunities
Lower risks
Regulated environment
Empowerment of TRA 1-Full transfer of regulatory functions
2- Staffing and organization
3- Nomination of Board Members
4- Financing
Broader range of services
Lower prices
Better quality of service
Telecom Operators
Fair treatment
Fair competition
Consumers
New and recurrent revenue streams
Economic boost
Government of Lebanon
1st June 2012

21. Some demand-side promotion policies should be encouraged and adopted by the Government to stimulate growth of e-services
Promote digital literacy
Raising public awareness on benefits of e-services and promote their use
Governments providing training on the use of PCs and Internet
Digital literacy program integrating both demand and supply sides (i.e. financial support to schools for network construction and broadband use)
Subsidize low-cost user devices
Policies aiming at making user devices more affordable
Wide range of policies to be adopted for subsidizing CPE: from complete government subsidization to private initiatives.
Have government serve as an anchor tenant
Computerizing public information and providing e-government services
E-government also encourages citizens to subscribe to broadband services and provides businesses with more information
Develop online content and media
Governments should support content and media development in local languages, with locally relevant content.
Encourage businesses to use e-services
SMEs, representing most of the private sector, often lack understanding of broadband impact or cannot afford it
Special policy measures for SMEs: free/low-cost applications, tax breaks for investments in ICT and Web-based services, tax cuts to ICT related businesses
18 September 2018

22. THANK YOU