Transcript 20090127_Building the Telecom Highways for Economic Prosperity

Building the Telecom Highways for
Economic Prosperity in Lebanon
Dr. Kamal Shehadi,
Chairman and CEO
Telecommunications Regulatory Authority of Lebanon
Telecom Finance- London
27th January 2009
1
Although reform has started with the establishment of the TRA,
most telecoms markets in Lebanon are growing slowly and suffer
from lack of competition
Current
Indicators
Penetration
Number of
SP
Private / Stateowned
Level of Competition
Mobile Market
35%
2
State-Owned
Monopoly
Fixed Market
63% (*)
1
State-Owned
Monopoly
Internet Market
32.5% (*)
~ 16
Private
Competition
ADSL Market
~ 7.7% (*)
~8
MoT / Ogero
Private (bitstream,
line sharing)
Limited Competition
2
The telecommunications market is still underdeveloped when compared to
other countries
Fixed Line Penetration vs.
GDP per Capita (2005)
Mobile Penetration vs.
GDP per Capita (2005)
200%
140%
Singapore
United Arab
Emirates
160%
Bahrain
Italy
Hungary
Poland
80%
Chile
Egypt Jordan Venezuela
Slovakia
60%
Romania
Tunisia
Algeria
40%
South Africa
Libya
20%
Mobile Penetration
PSTN Penetration
100%
Kuw ait
100%
Bulgaria
Italy
United Arab
Emirates
Singapore
Qatar
Bahrain
Ireland
140%
120%
Czech
Republic
120%
Bulgaria
Slovakia
Russia
South Africa Poland
Chile
Jordan Romania
Saudi Arabia
60%
Tunisia
Venezuela
Algeria
40% Morocco
Libya
LEBANON
80%
20%
Ireland
Egypt
LEBANON
Morocco
0%
Hungary
Internet Penetration
180%
Internet Penetration vs.
GDP per Capita (2005)
0%
0
10,000 20,000 30,000 40,000 50,000 60,000
GDP per Capita (USD/ Year)
With its GDP per Capita, Lebanon should
be at around 55% penetration rate in
Fixed Lines.
Sources: Economist Intelligence Unit, interviews with industry
0
10,000 20,000 30,000 40,000 50,000 60,000
GDP per Capita (USD/ Year)
With its GDP per Capita, Lebanon should
be at around 60% penetration rate in
Mobile Lines.
GDP per Capita (USD/ Year)
With its GDP per Capita, Lebanon should
be at around 22% penetration rate in
Internet.
3
The TRA has assessed the strengths and opportunities of the
telecommunications market in its reform and liberalization process

Fixed Voice
Mobile
Mobile
Data
Data







Relatively good copper
infrastructure
Regionally competitive
price per minute
De jure MoT monopoly
 Low incentive to upgrade the
infrastructure and introduce new
technologies
 Low penetration rate
 Stagnant growth
Pent up demand for
Mobile services
High Mobile revenues
(ARPU over US$ 65/month)
High charges
 Lag behind in terms of new
technologies
 Low market penetration
 Limited choice in mobile bundled
tariffs packages
 Shortage of adequate investments
Relatively competitive
Lucrative segment
New wireless technologies
deployed
Pent-up demand for data
and internet services
Shortage of international bandwidth
 Access controlled by the MOT
 High int’l bandwidth prices, and non
optimal allocation of bandwidth
among providers
 Incomplete Regulatory framework
 High pent-up demand and
important growth potential in
all telecom markets
 Growing economy with a
stable financial system
 Appropriate regulatory
framework to attract investors
 Consumer behavior/early
adopter of telecom services
 Liberal political and social
environment
 Dynamic private sector
4
TRA is planning for the liberalization of most telecom services in 2009
2009
Mobile
(1)
Network Operator
2010
2011
2012
2013
2014
(2)
3
Virtual Network MNVOs
PSTN/ Basic
Telephony
Network Operator
?
?
1
Resale
Access
Broadband
International
Gateway
National (core, metro
and access)
(3)
3
(4)
Voice and Data Facilities
Based Provider
3
Data Only Facilities
Based Provider
2
(5)
Voice and Data Resellers
(1) The privatization of the mobile sector will depend on the regional and international financial markets
conditions
(2) Two mobile operators and Liban Telecom
(3) Two National Broadband Licensees and Liban Telecom
(4) Two mobile operators and Liban Telecom
(5) Two National Broadband Licenses, subject to CoM’s decision
License Award
Market Review
Open licensing
5
TRA is aiming to have infrastructure-based competition in the provision of
broadband services
competition
Fixed MoT
Infrastructure
National
Broadband
Licenses
• Currently the Only provider of National Internet and
Data Transmission
• Needs major upgrade of National and International
capacity
• Allow CS/CPS whenever the market permits
• Provide a best in class alternative National
Networks (core, metropolitan and access),
enabling the National Transmission of Data
and provision of High Speed communications
Broadband Access • Unleash competition on the access level and
provide more choices to consumers ( including
Licenses
by incumbent data service providers)
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The TRA plans to issue, following an international auction, two national
broadband licenses for international, core, metro, and access networks
The TRA plans to issue two types of Broadband Licenses
National Broadband Licenses (NBLs) with:
 Rights to build/offer (fixed and spectrum based) Access, National Backbone and International
network/services
 Obligations to meet access and national backbone rollout conditions with minimum build for fiber
 Exclusivity period to interconnect new sites of other BAL providers via its national backbone
 Broadband Access Licenses (BALs) :
 National or regional
 With or without spectrum,
 Existing Data Service Providers continue to use their national Microwave backbone to backhaul existing sites
 BALs originally rely on the NBLs for new site connectivity
Broadband Deployment Timeline
Broadband
Policy
Statement
Jan 09
Spectrum
Re-farming
& RTU feesROW &
Duct s
Decree
Draft RFA for
Consultation
(including BB
License)
NBL
Auction
July 09
December 09
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The regulatory framework and the public consultation process adopted by
TRA aim at ensuring the success of liberalization
Drafting Stage
Unbundling
Regulation
Accounting Separation
Regulation
Universal Service
CS / CPS
Draft Ready Stage
VOIP Policy
Statement
Consultation Stage
Spectrum Refarming and
Packaging Plan
National Roaming
Improving FM
Broadcasting
Digital Migration
Strategy for TV
Broadcasting
Access to Information
Regulation
Final Review (TRA
Board)
Liberalization Roadmap
Broadband Policy
Statement
Numbering
Regulation
Licensing
Regulation
Issued
Significant Market Power
Regulation
Decisions:
• VSAT,
• Trial IPTV
• Spectrum trial
Allocation for MoT /
OGERO
Interconnection Regulation
Pricing Regulation
Type Approval Regulation
* Interconnection Interim
Pricing Decision
Quality of Service Regulation
Spectrum Pricing Opinion
Decision for establishment
of call centers
Spectrum Management
and Licensing
Regulation
Lebanese National
Frequency Table
National Numbering Plan
Consumer Affairs
Regulation
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TRA is promoting Infrastructure Sharing and access to Rights of
Way prior to the broadband licensing to lower the barrier to
entry
Conditions of Use and
Procedures
•
•
•
•
All Existing
Infrastructure *
owned by ROL
Telecom Law
permits access
IS/RoW for
Service
Providers
*All Existing Infrastructure:
-Fixed Infrastructure
-Mobile Infrastructure
-Water, sewers, drainage
-Electricity
-Roads, Streets, Highways
Provision of available IS info
Standard Application forms
Defined period for approval
Clear justification of denied requests
Charges and Fees
TRA Drafted
Decree for
COM
(assessed by Public Entities)
• Cost-based administration, maintenance and capital
improvement fees
• ROW fees for New Infrastructure : existing 10% VAT
on telecom bills suffices
• Existing Infrastructure (ducts, poles) : rental fees
based on the capacity used or occupied
• Inspection & supervision fees shared with TRA
Dispute Resolution
• TRA plays the role of a mediator between Public
Entity & SP
• In case of disagreement, TRA will report the case
directly to COM for final decision
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Allowing infrastructure sharing has important benefits for all stakeholders
Broader Benefits
 Faster deployment
 Allows investors to reach less densely-populated areas by sharing deployment cost
 Optimize use of scarce national resources
 Eliminates redundant, costly, and disruptive public works
 Reduces environmental damage caused by constructing new data networks
Incumbent Benefits
 Allows for quick recovery of new investment cost
 Provides new revenue stream through cost-based rent
New Entrant Benefits
 Deploys network and services to customers faster
 Reduces cost of deploying new network for new entrant (60-70% for civil works)
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The TRA expects a decision by the Government of Lebanon to re-launch
the mobile auction following the parliamentary elections (Summer 09)
November 2007
January 2008
To
To+ 2 (Mths)
To+ 3 (Mths)
To+ 5 (Mths)
Licensing
Process
Suspended
Mobile Auction
Launch:
RFA published
GoL
Decision to
Re launch
Process
Technical &
Pre-Auction
Financial
Bids Due
Auction –
Announcing
two winning
bidders
Handover completed
Crucial phase that should
be completed smoothly
and in the specified time
Scope of Mobile Licenses
 Provision of any service over the licensed frequencies, including 3G mobile broadband services
 Build-out and operation of a facilities-based international gateway
 Provision of all international services to their own end users
Infrastructure sharing strongly encouraged as long as it does not limit competition
Obligations
 Geographic roll-out and coverage obligations are not onerous (areas already covered)
 Introduction of mobile number portability
 Provision of national roaming to the third entrant to allow a faster development of competition
The way forward for regulators
 Regulators must give higher priority to lowering the financial and physical barriers
to entry to promote investments in underserved markets
Infrastructure sharing, both for new and existing infrastructure, has become even
more pressing
 Auctions are still the preferred way to go, not primarily for the revenue-generating
objective, but for the fairness, simplicity, and transparency of a well-designed auction
 Regulators should look at revenue-sharing arrangements more positively than in
the past for two reasons:
As one way to ease the financing requirements of new telecom investments
As a mechanism to ensure that the value of the telecom assets is carried over
beyond the current economic and financial crisis
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