Lebanon - Regulator says the broadband market is far below possible performance

[bloomberg] Lebanon needs to invest at least $200 million in its Internet broadband infrastructure to bring services to levels of other countries in the Middle East, said the head of Lebanon’s Telecommunications Regulatory Authority.

“The broadband network inside the country is choking,” Imad Hoballah, TRA’s acting chairman and chief executive officer, said in an interview today. “The current available bandwidth is below the demand level and this is directly impacting residential end-users and corporate end-users alike.”

Market assessments and studies by the regulator based on regional benchmarks indicate that Lebanon’s broadband penetration, currently at 16 percent, is “far below the market potential,” Hoballah said.

Lebanon, which has a population of about 4.2 million, could have broadband market penetration exceeding 30 percent if the required infrastructure and investment were in place, he said. Lebanon has one of the lowest penetration rates in the region, according to telecommunications and media consulting firm Arab Advisors Group, based in Jordan.

“Ten years ago they were at the forefront of the Arab world’s telecommunications market,” said Jawad Abassi, founder and general manager of Arab Advisors Group. Since then, other countries have “liberalized their telecommunications sector and adopted a modern approach to the industry, except Lebanon, which regressed into a 1970s model where the government controls, owns and plans everything.”

Sale Plans

Plans to sell two mobile-phone companies, which previous Lebanese governments hoped would raise as much as $7 billion and help retire a portion of the country’s $51 public debt, were put on hold by the global credit crisis and parliamentary elections in June of last year. They have also been delayed by political bickering.

“We need to open up and introduce new regulatory tools,” Hoballah said. “We need to enhance and complete the current regulatory framework by addressing regulations related to the infrastructure, sharing and national roaming.”

An investment of $500 million would put Lebanon on par with countries in Europe and North America, Hoballah said.

Lebanon’s Ministry of Telecommunications is investing in infrastructure and aims to build a digital-optical backbone network and upgrade the capacity of a fiber-optic cable that connects the country to Cyprus, Hoballah said. It’s also upgrading the ultra-high-capacity fiber-optic submarine cable system linking India and Europe via the Middle East, which will increase Lebanon’s international bandwidth to 120 gigabits per second, he said.

Lebanon Needs Investment in `Choking' Broadband Network, Regulator Says