LEBANON

STATEMENT BY His Excellency Marwan HAMADE
Minister of Telecommunications

Le Liban, comme vous le savez, sort d’une terrible épreuve qui vient s’ajouter à toutes celles qu’il a vécues au courts des dernières décennies. Par leur ampleur les attaques israéliennes dévastatrices de cet été n’ont épargné ni les civils, ni les infrastructures du pays : 1200 libanais ont péri, 4000 ont été blessés, 900000 déplacés.

Elles ont visé également, le secteur des télécommunications nous infligeant des pertes supérieures à 100 millions de dollars.

Face à ces destructions, le Liban relève le défi de la reconstruction assité en cela par ses frères arabes et ses amis du monde entier. Je saisis donc cette occasion pour remercier notre pays hôte la Turquie qui a envoyé ses troupes participer à l’effort de paix des Nations-Unies. Et je vous invite tous à poursuivre vos élans de solidarité en encourageant vos gouvernements respectifs à participer à la conférence internationale pour le Liban, le 15 Janvier prochain à Paris.
 

1- Introduction:

Your Excellencies, Honorable Government Representatives, Distinguished Participants and Guests:

I am indeed honored to have this opportunity to speak to you today.

Lebanon’s experience with the reform of the telecommunications sector that has taken place over the last decade is considered a prime example for reforms in other sectors.

As the telecommunications sector reform is the norm among ITU Member States, Lebanon, with this declaration, intends to

1. provide a description of the reform that was initiated; and
2. assess the benefits that are expected to arise from this reform.
   
   

2- Nature and Design of the Reform:

The onset of the design of the telecommunications sector reform can be traced to the Telecommunications Act of July 2002. The main incentive for this Act arose out of the need for the telecommunications sector to facilitate investment in the Lebanese economy.

This Act implements a complete restructuring of the telecommunications sector including the regulatory and oversight of the sector. The Act intends to launch the liberalization of the telecommunications sector with the licensing of one or more private operators in cellular telephony, and a few in other non-core services markets. The Act also advocates the establishment of the fixed incumbent operator, a joint-stock company maintaining the responsibility for service provision of fixed telephony services across the board, in addition to holding a mobile UMTS license. The Act envisages that the incumbent would move, within a period of two years from its establishment, from a status where the Government would retain a 100% shareholding and have it operate as a monopoly, to one where it would hold a majority stake.

At the moment the Government is considering a course of action:

• To proceed with the immediate separation of the regulatory and operational functions in MoT and create an independent telecommunications regulatory body;
• To prepare a legal framework to facilitate private investment in telecommunications;
• To liberalize the telecommunications sector, primarily the broadband market through enabling private data operators to gain access to the local loop;
• To study possible ways of privatization of the fixed and mobile network operators;
• To undertake a valuation of telecommunications assets;
• To expand communication infrastructure and increase access to communication services;
• To emphasize training and human capacity building to faster the enabling environment for ICT development;
• To support resources for BDT activities that promote the Millennium Development goals;
• To support both phases of the WSIS, all stakeholders reiterated their commitment to universal, ubiquitous and affordable access to ICT infrastructure and services;
• To support the Universal Declaration of Human Rights who states that: Everyone had the right to information, to freedom of opinion and expression;
• To support the report of the Working Group of the Council concerning the elaboration of the strategic and financial plan project;
• To support the report of the Working Group of the Council on the WSIS, as well as the one the utilization of languages.
  
   

3- Implementation of the Reform:

The Government plans to implement the reform by moving on three tracks:

• Preparation and approval of the necessary legislation to define the regulatory and operational framework of the sector;
• Sale of the two mobile operators’ licenses;
• The unbundling of the local loop and the privatization of Liban Telecom.
  

The first implementation track necessitates the enactment of the telecommunications Act by, as an initial step, the establishment of the Telecommunications Regulatory Authority (TRA) as the national independent regulator. This step is expected to be finalized by June 2007. The subsequent step is the establishment of the national incumbent operator, Liban Telecom, expected to be completed by November 2007.

The second implementation track focuses on the sale of the two mobile operators’ licenses. The Government intends to proceed with the sale process of the two mobile licenses taking into account the best timing in terms of obtaining a maximal value during the licensing process. This sale is supposed to facilitate the introduction of mobile broadband access by the implementation of 3G/UMTS systems.

The third implementation track relates to the privatization of up to 40% of Liban Telecom to a private investor. Awaiting the establishment of Liban Telecom, the Government has already initiated the partial unbundling of the MoT’s local loop in view of granting shared access to private data operators. This step, accompanied by the preparation by MoT of a Reference Access Offer, is a keystone in the liberalization of the fixed broadband data services.

 

4- Expected Outcome of the Reform Process:

The reform of the telecommunications sector is expected to be a largely successful one from three major standpoints.

First, the reform will achieve a successful restructuring of the sector, introducing competition for the main communication services, and allowing a large number of operators for value added services. The major premise here is that competition spurs expansion of the telecommunication sector, and enables reduction in end user tariffs, with increased efficiency. The main winners from the reform will be the Lebanese population and the economy as a whole.

Another expected result of the reform, is a higher telephone penetration. Increased competition will lead to significant outcomes in terms of service expansion and quality across the country, and in all telecommunication services.

The reform is expected to bring about improvements in profitability, investment and output. In anticipation of privatization, new management will be hired, and a financial restructuring will be undertaken at Liban Telecom upon its establishment.

On the second front, together with increasing competition in the sector, the reform process will introduce regulatory oversight in the sector with the establishment and operationalisation of the TRA. Indeed, one of the reasons for the future successful sale of Liban Telecom will certainly be attributed to the presence of the TRA, which will enable potential bidders to make a favorable assessment of its track record.

The third standpoint that will determine success of the telecommunications reform in Lebanon relates to its economy-wide effects. While the Government’s objectives for pursuing the sector’s reform may not have been the maximization of the sale revenues, the sale of its 40% stake in Liban Telecom is expected to earn it considerable revenue, and at the same time reduce the burden on itself of making new investments and financing maintenance.

With the dramatic increase in telephone and other telecommunications services use, revenue from the sector will increase, thus generating additional tax revenues for the Government.

The third level of economy-wide impact relates to the multiplier effect that will develop an entrepreneurship of different levels and size, across the country. The main beneficiaries from the reform process will be entrepreneurs in the broadband services market which is expected to undergo a tremendous growth upon the realization of the unbundling of the local loop.

Excellencies, ladies and gentlemen

Lebanon, in his Document number 39 proposes to this honorable Plenary to adopt a Resolution relate to:

“Assistance and support to Lebanon for rebuilding its telecommunication networks (fixed and mobile).”

Now let me switch to French to declare to your honorable member states of this Plenary that:

“ Le LIBAN ne mourra pas.
Le LIBAN meurtri; injustement détruit, mais héroïquement et stoïquement plusieurs fois rebâtit, demande à cette Auguste Assemblée et à tous les pays frères et amis de lui faire confiance et de voter pour lui pour être élu au Conseil dans la région asiatique E. ”

Merci de votre attention.