Transcript Document

TRA Strategic Plan
Date: November 2008
Table
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I.
The benefits of liberalization
II.
The urgent need for reform
III.
TRA vision and roadmap
IV.
The way forward
2
The GoL, recognizing the need for reform, has committed to open the
telecommunications
sector
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competition and has recognized it as an
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title
important lever for economic development
International
Conference for
Support to
Lebanon” Paris III
Conference
 “… there is a need to reduce the cost of production resulting mainly from
unreliable supply of electricity, the high cost of telecommunication …”
 “The Government of Lebanon will implement reforms in order to improve
competitiveness and reduce the cost of doing business in Lebanon…”
 “The government will seek a greater private sector role in sectors such as
telecommunications…”
‫ ولبنان‬.‫ §( إن قطاع االتصاالت هو محرّ ك أساسي لالقتصاد الوطني وهو يسهم في تعزيز اإلنماء المتوازن‬56) 
‫البيان الوزاري للحكومة‬
‫يعمل على تقديم رؤية لهذا القطاع تهدف إلى بناء مجتمع المعلوماتية من أجل مواكبة ثورة االتصاالت العالمية‬
2008
‫ والحكومة اللبنانية تلتزم في هذا السياق بتحرير قطاع االتصاالت وفتح السوق الستثمارات‬،‫وريادتها في المنطقة‬
‫حكومة دولةالرئيس فؤاد‬
‫السنيورة‬
.‫القطاع الخاص والمنافسة وحماية حقوق المستهلك‬
Telecommunications
Law 431 / 2002
 The TRA is charged with promoting competition in telecommunications
(Telecommunications Law, Art. 5.1(C)).
 The Law provided for the liberalization of the telecommunications market by
privatizing state-owned telecommunications entities and opening the market to
private sector investments and competition.
GoL Governmental Declarations in 2005 and 2008 commit the CoM to the liberalization of
telecommunications
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The Telecommunications Law 431 requires the creation of a proper
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structure for a competitive telecommunications market
Before Telecom Law 431
Ministry of
Telecommunications
Policymaker Regulator
Operators
After Telecom Law 431
MoT
Policymaker
1
 Set the general guidelines for
telecom policy
 Recommend to CoM the award of
some broadband licenses
( Mobile, int’ll voice & fixed)
 Review and propose to CoM the
pricing of Radio Frequency
 MoT: policymaker, regulator and
service provider
CoM: Arbitrary regulatory role
(e.g. issuing all licenses)
No formal regulatory regime
3
TRA
Regulator
 Draft and implement regulations
 Award telecom licenses
 Ensure competition and prevent
anti-competitive behavior
 Manage on behalf of GoL radio
frequencies
 Approve TRA budget & other
TRA documents as per Law 431
Operators
Incumbents & New Entrants
2
 Provide telecom services to the public
 Install own and manage telecom networks and facilities
 Abide by TRA regulations, decisions and licenses
4
There is a wide range of benefits stemming from liberalization that TRA
hopes
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Benefits the Customer





Increase service penetration
Increase customer choice
Improve price to quality ratio
Introduce new technologies and services
Reach underserved areas
Benefits the Telecommunications Industry

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


Keep up with technological advances
Ensure more effective infrastructure
Improve sector productivity
Increase overall telecom revenues
Attract private and foreign capital
Improve connectivity and penetration of ICT
Benefits the Economy
 Generate revenues from privatization and from licenses
 Spur job creation throughout the economy
 Join international trade organizations (e.g. Union for the
Mediterranean) and global trading systems (e.g. EU association)
 Catalyze growth of information economy
 Improve global competitiveness of the economy
 Improve general economic performance
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Table
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I.
The benefits of liberalization
II.
The urgent need for reform
III.
TRA vision and roadmap
IV.
The way forward
6
The Lebanese market for fixed and mobile services has been stagnant
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and the data and internet services have been constrained
Strengths
Fixed Voice
Mobile
Data
Weaknesses
 Relatively good copper infrastructure
 Competitive price per minute
compared to regional countries
 Pent up demand for mobile services
 High mobile revenues




Relatively competitive market
Lucrative segment
New wireless technologies deployed
Pent-up demand for data and internet
services
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 De jure MoT monopoly
 No incentive to upgrade the infrastructure and
introduce new technologies
 Low penetration rate
 Stagnant growth


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
High charges
Lag behind in terms of new technologies
Low market penetration
Limited choice in mobile packages
Shortage of adequate investments leading to
congestion in Mobile network and bad service
quality
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
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Shortage in International bandwidth
Slow DSL launch
Access hindered by incumbent operator
High international bandwidth prices
Discriminatory allocation of bandwidth
Uncertainty over regulatory framework
Penetration of telecommunications service in Lebanon between 2000 and
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2007 has increased very slowly
35%
30%
25%
20%
15%
10%
5%
0%
2000
2001
2002
2003
2004
2005
2006
Fixed line penetration
Mobile penetration
Broadband penetration
Internet penetration
Source: Globalcomms, operator data, ITU, Arab Advisors Group
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2007
The telecommunications market is still underdeveloped when compared to
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other countries
Fixed Line Penetration vs.
GDP per Capita (2005)
Mobile Penetration vs.
GDP per Capita (2005)
200%
140%
160%
120%
Ireland
100%
Bahrain
Bulgaria
Hungary
Poland
80%
Chile
Egypt Jordan Venezuela
Slovakia
60%
Romania
Tunisia
Algeria
40%
South Africa
Libya
20%
Italy
y = 0.3441Ln(x) - 2.1968
R2 = 0.6852
Italy
Bahrain
United Arab
Kuw ait
100%
Ireland
Emirates
Singapore
Hungary
Bulgaria
Qatar
Slovakia
80%
Russia
South Africa Poland
Chile
Jordan Romania
Saudi Arabia
60%
Tunisia
Venezuela
Algeria
y = 0.2162Ln(x) - 1.1851
40% Morocco
Libya
R2 = 0.7209
LEBANON
Mobile Penetration
PSTN Penetration
140%
120%
100%
Czech
Republic
20%
10,000 20,000 30,000 40,000 50,000 60,000
GDP per Capita (USD/ Year)
US
70%
UAE
60%
50%
Saudi Arabia
Bahrain
40%
Venezuela
Peru
Egypt
LEBANON
KSA
Algeria
30%
20%
Jordan
Egypt
Libya
10%
0%
0
UK
80%
Egypt
LEBANON
Morocco
0%
90%
Internet Penetration
Singapore
United Arab
Emirates
180%
Internet Penetration vs.
GDP per Capita (2005)
Germany
Italy
Spain
France
Qatar
y = 0.1165Ln(x) - 0.689
R2 = 0.483
0%
0
10,000 20,000 30,000 40,000 50,000 60,000
GDP per Capita (USD/ Year)
Sources: Economist Intelligence Unit, interviews with industry
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0
10,000
20,000
30,000
40,000
GDP per Capita (USD/ Year)
50,000
The cost of a mobile postpaid minute in Lebanon is among the highest in
the region
due to
the lacktitle
of competition
and the legacy of a high excise
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tax
Mobile Postpaid Peak On-net Minute Rates
(2006) (US$ cents per peak minute)
Mobile Prepaid Peak On-net Minute Rates
(2006) (US$ per peak minute)
Mobinil
Umniah
Mobinil
Batelco
Fastlink
4
Etisalat
8
MobileCom
8
Umniah
8
6
6
7
Batelco
MobileCom
Etisalat
12
8
Fastlink
STC
7
14
8
8
60% higher than
the lowest
regional rate
STC
Alfa
Alfa
Note: All Rates corresponds to the lowest first minute rate
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13
MTC Touch
MTC touch
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More than double
the lowest
regional rate
13
10
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A typical internet user in Lebanon will spend eight times more than in
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similar countries due to low download ceilings
Monthly charge to use 15 GB/month (500MB/day) using
1Mbps ADSL connection
$200
$180
$160
$140
$120
$100
$80
$60
$40
$20
$0
Lebanon
(IDM)
Egypt
(Nile OnLine)
UAE
(Du)
Source: Operators Websites
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Jordan
(Orange)
Lithuania
(Zebra)
The penetration of DSL services in Lebanon is the lowest in the
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Region, due in part to the late start
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Comparison of DSL penetration (% of population) with the Arab Countries in 2008
11
10
8
6
6
4
4
2
1
2
3
2
0
Lebanon
Source: Operators Websites
Tunisia Morocco
Kuwait
12
KSA
Qatar
UAE
Lebanon should have much higher broadband connectivity given its GDP
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per capita
Broadband Penetration
(subscribers per 100
inhabitants) 2007
5
Dominica
St Vincent et
Grenadine
4.5
China
4
3.5
3
Belize
2.5
Venezuela
Jamaica
2
Maldives
Peru
Colombia
Morocco
1.5
1
Iran
Vietnam
Georgia
Algeria
Jordan
Egypt
Philippines
5,000
Thailand
Cape
Verde
Lebanon
4,000
Dominican
Republic
Tunisia
Fiji
0.5
0
3,000
Grenada
6,000
7,000
8,000
9,000
GDP per capita (US$, 2007)
Source: UN E-Government Readiness Survey, 2008
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The limited bandwidth available to Lebanese users means that
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only a to
limited
range oftitle
applications
and services can be offered
Indicative Application Bandwidth Demand (Mbps)
Services
technically not
feasible
Services not
offered due to
bandwidth
limitations
Telepresence
Virtual Reality
5 second CD download
Quality Video Streaming
Multi-Channel TV
Video on Demand
Video Streaming
Current Limit on
Residential
Broadband
Multiplayers game
Video Conference
MP3 streaming
Online games
Teleconference
Web Surfing
VOIP
Email
0.01
0.1
1
10
100
Estimation of bandwidth requirements for the UK households:

By 2008, demand for the most bandwidth intensive households could reach 18 Mbps
downstream and 3 Mbps upstream

By 2012, the bandwidth demand for the most intensive bandwidth households could reach 23
Mbps downstream and 14 Mbps upstream
14
Sources: New Zealand National Broadband Strategy , Broadband
Stakeholder Group UK
Table
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I.
The benefits of liberalization
II.
The urgent need for reform
III.
TRA vision and roadmap
IV.
The way forward
15
As a first step in assuming its duties as per Law 431, the TRA has defined
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its mission statement and objectives
TRA Prerogatives ( Non-exhaustive list)
 Issue regulations and draft Decrees (Art 5)
 Liberalize the market and take any necessary measure to reach a competitive market (Art
30)
 Manage Radio Frequency, Interconnection agreements, numbers, equipment import, etc..
(Art 29)
 License telecommunications service providers and radio frequency bands (Art 20)
 Resolve disputes between service providers (Art 43)
Mission Statement
To establish a regulatory environment that enables a competitive telecommunications market to
deliver state-of-the-art services at affordable prices to the broadest spectrum of the Lebanese
population
‫إيجاد بيئة ُمنظِ مة من شأنها أن تساعد سوق االتصاالت في تقديم آخر ما توصلت إليه التكنولوجيا في مجال خدمات االتصاالت‬
.‫ وعلى أوسع نطاق ممكن للمواطن اللبناني وللشركات اللبنانية‬،‫ ومعقولة‬،‫بأسعار تنافسية‬
16
The TRA's draft Liberalization Roadmap proposes introducing competition
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across to
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telecommunications
markets while allowing LibanTelecom some
exclusivity over some services for a limited period of time
2009
Mobile
3
Network Operator
Virtual Network MNVOs
PSTN/ Basic
Telephony
*
1
Network Operator
Reseller
Access
Broadband
International
Access
2010
**
National
Facilities Service Provider
5+
***
Reseller
Open licensing
Market Review
License Award
Notes
* Liban Telecom expected
** TRA is still considering the appropriate number of NBLs to issue
*** Two for the mobile licenses, one for Liban Telecom and two others for the NBLs for data traffic only
17
2011
2012
TRA's objective is for Lebanon to become a global leader in
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broadband communications within 10 years
Residential
services in 2018
• High speed Internet – surfing and data
transfer
• Digital Entertainment – video
• Communication – voice
• For around US$ 600/month and up to
1Gbps speed triple play services:
Business
Services in
2018
• High speed Internet and data transfer
• Digital Entertainment – video and
teleconferencing
• Communication – voice
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Target: 400,000 Broadband accounts in 2018
• For around US$40/month and up to
10Mbps speed Quadruple play services:
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Lebanon has to improve its telecommunications infrastructure and open it
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to competition
Fixed MoT Infrastructure: currently the only provider of national internet
and data transmission, however needs major upgrade of national and
Competition
international capacity.
National Broadband Licenses: Provide a best in class alternative
national networks (core, metropolitan and access), enabling the national
transmission and provision of high speed communication
Broadband Access Licenses: Unleash competition on the access level
and provide more choice to consumers ( e.g. incumbent data service providers)
Therefore
The TRA plans to issue licenses (through an international public auction) in order to establish
across Lebanon best in class core, metropolitan and access networks :
1.
Two new NBLs (alongside LibanTelecom)
2.
Unrestricted number of Broadband Access Licenses (for existing DSP and new
licenses) taking into account limitations in the availability of spectrum resource
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The combination of new licensees will compete in deploying a
nationwide
high-speed
international gateway for Data services
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Masternetwork,
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and access to customers
Two National Broadband
Licenses
•
•
•
•
•
All services except mobile and LT’s exclusivity
Nationwide core/metro/access coverage
International Gateway for Data services
15 years licenses
Awarded through international auction if competing applications
Unlimited Broadband
Access Licenses
•
•
•
•
•
All services except mobile and LT’s exclusivities
Only metro/access for 3 years (core permitted thereafter)
No international gateway for 3 years (IGW permitted thereafter)
10 year license
Awarded through auction only for scarce access spectrum
Liban Telecom License
•
•
•
•
•
All services, including mobile
Nationwide core/metro/access coverage
International gateway
20 year license
Awarded under the Telecommunications Law
TRA is considering how to license geographically-restricted metro licenses (including municipalities, real esta
developers, business parks, etc)
20
The TRA plans to launch the licensing of national broadband networks in
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Q1 2009
Broadband Policy
Statement
Draft RFA for
Consultation
Licensing
Regulation
IS and RoW Decrees
Spectrum Management
& Licensing Regulation
Final Broadband
Licenses
AUCTION
Q 1 09
TRA ready to grant
licenses that do not
require spectrum
The TRA is making steady progress in developing a regulatory framework to introduce
competition in the provision of broadband services. The auction for the National Broadband
Licenses and the Broadband Access Licenses will take place at the end of Q1 2009
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21
The Mobile Auction has been suspended in January 2008, but could be
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held within 8 weeks from a Government of Lebanon GoL decision
November 2007
Mobile Auction
Launch:
RFA published
January
2008
Licensing
Process
Freeze
T0
Process
Relaunched
T1= T0 + 10
weeks
Auction –
Announcement of
two winning
bidders
T1 + 8 weeks
Handover completed
Crucial Phase that should
be completed smoothly and
in the specified time
 Most of the preparatory work for the auction has been completed
 Until now, and despite the delay encountered, around 10 major regional and international
players of the telecommunications sector have shown interest in the auction
In order to relaunch the process (T0) the following steps should be completed:
 Agreement on the revised transaction structure
 Draft Law authorizing the selling of the assets and revised RFA approved by the CoM
 Law authorizing the selling of the assets enacted by the Parliament
22
The licensing of the two mobile operations and the opening of the mobile market to
competition
aims atMaster
ensuring title
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retail prices, quality of service improvements as
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well as the provision of advanced services
Rights and Obligations of Mobile Licensees
Scope of Mobile Licenses:
 Provision of any service over the licensed frequencies, including 3G mobile broadband services.
 Installation, ownership and operation of a facilities-based international gateway.
 Provision of all international services to their own end users.
Obligations:
 Geographic roll-out and coverage obligations
 Certain payment obligations:
 License fees
 Spectrum fees
 Numbering Fees
 Provision of mobile number portability to their customers to ensure a fair consumer choice.
 Provision of national roaming to the third entrant to allow a faster development of competition.
TRA will undertake periodic market reviews to analyze the state of competition and the need to
introduce new facilities-based operators or services-based resellers
23
Telecom
also calls
forstyle
additional structural reforms
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title
MoT
Restructuring of MoT – NOT YET STARTED
Current Structure
Mandated Structure Under the Telecom Law
MoT
MoT
Directorate General of
Construction and Equipment
Directorate General of Posts
Directorate General of Post
Directorate General of
Telecommunications
Directorate of General Control
Joint Administrative Division
Directorate of Common
Administrative
Division of Central Control
Directorate of Operation and
Maintenance
LT
The TRA views the creation and privatization of Liban Telecom as a major step in the
history of the telecommunications sector and a central component of future growth
24
In line with EU's best practices,the regulatory framework adopted by TRA
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ensures the success of liberalization
Drafting Stage
Draft Ready Stage
Unbundling
Regulation
VOIP Policy Statement
National Roaming
Accounting Separation
Regulation
Consultation Stage
Spectrum
Refarming and
Packaging Plan
Improving FM
Broadcasting
Final Review (TRA
Board)
Liberalization Roadmap
Broadband Policy
Statement
Licensing
Regulation
Universal Service
CS / CPS
Issued
Significant Market Power
Regulation
Decisions:
• VSAT,
• Trial IPTV
• Spectrum trial
Allocation for MoT /
OGERO
Interconnection
Regulation
Pricing Regulation
* Interconnection
Interim Pricing
Decision
Spectrum Pricing
Opinion
Spectrum
Management and
Licensing
Regulation
* Decision approved by the
board, but will be issued
concurrently
with
the
Mobile Auction Award.
Type Approval Regulation
Quality of Service
Regulation
Decision for
establishment of call
centers
Lebanese National
Frequency Table
Consumer Affairs
Regulation
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Table
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I.
The benefits of liberalization
II.
The urgent need for reform
III.
TRA vision and roadmap
IV.
The way forward
26
Our
Commitment
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 The TRA is committed to bringing the country back to the international
telecommunications scene through market liberalization
 The TRA is committed to reconnecting the Lebanese population with the world.
We intend to accomplish this by building a thriving, innovative, and competitive
telecommunications market place, driven by a technologically advanced
infrastructure-based sector and offering services at internationally competitive prices
and quality
 The TRA is committed to promoting the interests of telecom Lebanese consumers
in the market to make sure they are getting good quality of service at affordable and
competitive prices and that their right to safe, secures and confidential access to
telecommunications is safeguarded
27