The network of fixed lines has been completely put in again in the nineties (by Alcatel, Ericsson and Siemens). Lines moved up from 400 000, half of which were mostly in bad condition, to 1.5 million. Technically, only central ones are linked with fiber optic wires. However, at the end of 2006 around 700 000 lines were allocated to subscribers. The performance was bad especially that the state’s entity (called Ogero) could not adapt to the modern commercial methods.
A privatization plan was set up in 2002 but hasn’t been initiated yet even though an international consultant is currently conducting studies on the matter. This plan foresees first of all the establishment of a company under the name of “Liban Telecom”, to which will be transferred all the assets owned by the State: network, human resources, equipment, etc. The company will propose at a later stage a part of its shares to a strategic partner who will take in charge the management. The privatization could be carried out later partially, step by step. A part of the shares will be offered on the stock market. As per the government’s program, this plan will be launched in 2007-2008.
The mobile phone sector was inaugurated in 1994 with the assistance of 2 companies (FML, Cellis network) and (LibanCell network) partially owned and managed by Finland Telecom. BOT agreements (Build, Operate, and Transfer) foresaw the construction and exploitation of the networks during 10 to 12 years before their delivery to the state.
Litigation forced the state to put an end to the contracts before their official termination date. Both networks became state-controlled and their management was given to 2 companies: the Kuwaiti MTC (network MTC-Touch) and the Saudi-German Fal Dete (Network Alfa) pursuant to 4-year contracts. All in all, around 1.1 million subscribers are equally divided among both operators.
In this case too, both networks can be rapidly sold even if the management period (4 years) hasn’t expired yet. This could happen partially or completely in 2007-2008. Moreover, the company “Liban Telecom” will also have the right to launch a third mobile network.
As per the government’s plan, all these privatization projects will be coupled with the liberalization of the telecommunication sector in its essential and annexed components under the leadership of an independent “regulation authority” as it is the case in many countries.
The internet is already a free and competitive market thanks to the presence of a dozen of companies, providers, and other companies that are working on the added value niche or the secure connection in data transfer.
However, ADSL is still limited and too expensive compared to the regional and international norms. Imminent projects are about to succeed in order to make this option available to the public at affordable prices which is a must condition for the establishment of local and international companies specialized in the computers domain.
This problem and other administrative issues related to the respect of intellectual property (piracy) have dissuaded several companies working in the field of computer services and engineering from having a production base in Lebanon.
Like India, Morocco or Ireland, Lebanon has been prospected for the establishment of offshore companies. Some attempts have succeeded (like the French franchise Unilog before it was bought by a British group), while others are still waiting for a better legal and secure environment.
This did not impede Lebanese companies specialized in software, services, equipment, etc. from experiencing success beyond the country’s frontiers such as the group Holcom and CIS whose hundreds of employees are scattered on dozens of markets. Other companies that have more state of the art products like BML-Istisharat or Software Design are already exporting to several markets (reaching the USA).
In parallel, other Lebanese have succeeded abroad first before establishing in Lebanon production and development centers. As an example, we cite Murex (one of the world leaders in financial software) or Soft Management very performing especially on the French wide distribution market or even Digipen a leader in Nintendo simulation.
This performance, among other reasons, has urged the Lebanese authorities to establish a techno pole on a land in Damour. But political obstacles have delayed this project to date.
All these data and the multiplication of specialized faculties made of this sector a top priority according to development organisms operating locally. The government’s agenda dedicates an important chapter to this matter and its execution will start soon.
