the-lebanon.com

shlon wrote:1) it WILL be limited at 4 and 5GB / month [which is not bad, but still...]

Wednesday, July 05, 2006
Lebanon's lagging IT sector linked to broader economic ills

By Lysandra Ohrstrom
Daily Star staff

BEIRUT: The slow rate of telecom deregulation in Lebanon has dislodged the country from the role it occupied in the 1990s, when it set the regional pace for Internet penetration, according to the head of a consumer's advocacy group. "Our Internet sector has grown by 2 percent in six years, but at the same time the ICT sectors in other Arab countries have progressed by an average of 50 percent," said Zuheir Berro, head of Consumers Lebanon.

The stagnation of Lebanon's ICT sector has had negative economic consequences, analysts say: Expensive Internet connection costs and low levels of technical progress stemming from the government's telecom monopoly are deterring foreign investment in Lebanon.

Lebanon ranks eighth out of 12 Arab countries in terms of Internet penetration, which does not exceed 11.7 percent, said Berro, citing the Arab Advisors Group.

"We are six or seven years behind in the IT revolution, and the evolution of fixed-line telephony, Internet and mobile phones from 2005-06 has been a catastrophe," Berro told The Daily Star.

Even though the per-capita annual income in Jordan is only $1,750 compared with $4,050 in Lebanon, according to worldstats.com, the rates of Internet usage increased by 371 percent from 2000-05, versus a 100 percent increase in Lebanon. As of 2005 there are 600,000 Internet users in both countries, though there are 900,000 more people in Jordan.

At the moment Lebanon's six Internet Service Providers (ISPs) purchase bandwidth from the state-owned telecom firm OGERO, which offers two dial-up Internet connection speeds, a 33-56 kilobyte minimum capacity and a 128 kilobytes maximum capacity. Another option for companies is to pay the government to lease a phone line strictly for Internet usage, which allows for access to more bandwidth.

InfoPro Research pays $1000 per month for a leased line, said general manager, Imad Bashour, who said the government must reduce rates to regionally comparable levels and increase bandwidth capacity in order to attract the private sector to Lebanon.

"When investors come here and want to set up a business they look at the IT infrastructure and they see it is overpriced, and there are time limitations and volume limitations. To pay $1000 per month for a leased line is ridiculous, in Dubai they pay, what, $50?" Bashour said.

The Telecom Ministry has delayed the introduction of the digital DSL network by more than four months now, but insists that by September it will be operational. Minister Marwan Hamade told The Daily Star that the process is on track.

"We've added new access capacity with FLAG, the two (DSL related) decrees have been approved, and Ogero reduced internet tariffs by 65-70 percent this year," he said over the phone, though he did not give a specific internet penetration rate.

"Internet penetration rates are moving up and the IT sector is going to boom after 12-14 years of sleeping," Hamade said.

Berro said that he met with Hamade in June and asked him to speed up the progress of telecom privatization, accelerate rate reductions, and "put these problems out of political conflict." Hamade agreed that privatization is imperative, but said the process is more difficult than it would seem since 38 percent of the state's budget comes from telecom revenues. Though Hamade refused to comment on the conversation with Berro, he did confirm that 38 percent of the government budget comes from telecom revenues - $40 million comes from Internet revenues and LL800 billion to LL900 billion ($533 million to $600 million) from the mobile sector.

Though telecom revenues are not a drain on national resources like the government's subsidy to EDL or payments to the National Social Security Fund (NSSF), deregulation of the telecom sector and its eventual privatization remains just as crucial to economic growth.

The ministers of economy and trade and finance said at the Lebanon Opportunities Conference last month that two new GSM companies are expected to enter the market at end of 2006, and the privatization of Liban telecom and fixed lines to be completed by mid-2007.