Five year programme calls for telecoms sell-off

16 Mar 2006

Lebanon’s government is this week reviewing a five-year economic growth plan that, amongst other measures, calls for the privatisation of state telecoms assets. Under the plan, the Ministry of Telecommunications (MoT) aims to establish an independent regulatory body – the Telecommunications Regulatory Authority (TRA) – to oversee the sector before transforming 100% state-owned fixed line incumbent Ogero into a new corporate entity, called Liban Telecom, and auctioning off the mobile operations currently managed by MTC Touch Lebanon and Germany’s DeTeCon (under the brand name Alfa). According to the two mobile operators’ four-year contracts, the MoT must give the cellcos six months notice before revoking their management agreements. According to investment bank JP Morgan, which has been analysing the sector alongside the government, Ogero/Liban Telecom is likely to be privatised in mid-2007.

Ogero has a monopoly on the telecoms sector in Lebanon, and operates, maintains, markets and manages the PSTN of the MoT, Lebanon’s only fixed line network. Ogero provides national and international voice and data services to business and residential users over a fibre-optic network spanning over 1,800km. Alfa (previously France Télécom Mobile Liban or Cellis) and MTC Touch Lebanon (previously Libancell) are Lebanon’s only mobile operators. Both signed build-transfer-operate (BTO) agreements to provide GSM-900 services with the government in 1994 before agreeing further management contracts in 2004, due to run out in 2008. According to spokespersons for the soon-to-be-launched TRA, Liban Telecom will be granted an option to launch its own rival mobile network. At the end of 2005 there were over a million GSM subscribers in Lebanon, a cellular penetration of over 22%, with the battle for the market leader’s position a close-run thing between Alfa and MTC Touch. Fixed line subscribers numbered 685,000 at the end of 2004, representing a teledensity of 15.1%.