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Alfa chairman:State intends to cut postpaid cellphone rates [The Daily Star, Beirut, Lebanon]
[July 08, 2011]

Alfa chairman:State intends to cut postpaid cellphone rates [The Daily Star, Beirut, Lebanon]


(Daily Star, The (Beirut, Lebanon) Via Acquire Media NewsEdge) July 08--BEIRUT -- Alfa's chairman and CEO Marwan Hayek confirmed that the Lebanese government is seriously planning to cut the prices of postpaid services provided by Alfa during the second half of 2011.



"We have plans to offer new packages and cut down the prices of the postpaid services that are offered by Alfa starting the fourth quarter of 2011," Hayek told The Daily Star in an exclusive interview.

Alfa is the brand name of the first Lebanese mobile network managed by Cairo-based Orascom Telecom Holding since February 2009. It is a state-owned mobile firm, and any decisions on cutting prices of its services must be approved by the government.


"The plan to slash prices of postpaid services is there but it is regulated by the Telecommunications Ministry and the treasury behind it," he said.

In line with Former Telecoms Minister Charbel Nahas' plan to revamp the sector, Alfa has recently provided its clients with a new "Wafer" prepaid plan that offers discounted rates on voice calls, SMS, and prepaid services allowing users to buy recharge cards at: $9.09 or $15.15 or $27.27 for a 30-day period.

"The latest 'Wafer' plan was an illustration on the collaboration we have had with the Telecommunications Ministry," he said.

For many years, cellular rates in Lebanon have ranked among the highest in the region as well inferior services compared to those offered by mobile operators in neighboring countries. "Prices are very high in Lebanon due to a lack of competition," added Hayek.

Hayek believes that the privatization of the two mobile operators owned by the government and creating a new one to put pressure on the existing ones is the best way of moving the sector to the next level in terms of performance, efficiency and services to the end users. "I am a business minded person and I believe that privatization is the only way of going forward though some people do not like it," he said.

However, Hayek emphasized as well the need to adopt good regulations in order to achieve a good privatization model. "Privatizing without having a good regulatory environment is not good for the end user," he said. "They go together." For the past few years, successive Lebanese governments have been unable to make a decision on whether to privatize the two mobile operators. Consequently, Alfa and mtc touch have been operating on temporary contracts with a lack of incentives to improve services and lower their prices. "The telecom sector is a major contributor to the treasury and this has prevented the government from making a serious decision to privatize this sector," said Hayek. "Whenever politics is part of business decision, things get delayed." Moreover, the lack of political will to make the changes necessary to free up the market and allow it to reach its potential has led Lebanon to fall further behind with inadequate broadband services and the absence of 3G until today.

Lebanon's telecom operators announced their plan to launch 3G technology in Lebanon in February 2011, while neighboring countries have been enjoying this technology for years. Lebanon is expected to start using this technology in September 2011. "The roll-out we have today is covering all Lebanon with more than 650 sites while offering Internet speeds of up to 21 mbps in real life," he said.

However, Hayek added that the launching of 3G in Lebanon in September won't cover the entire country because an infrastructure constraint still exists.

Hayek explained that the existing fiber network is congested and is performing at full capacity so a new one is needed. "Now with 3G you need more capacity on the backbone to serve the forecasted 3G traffic," he said.

"We are working around this constraint today and we will hopefully be able to launch 3G services partially starting September and not covering the entire country because this infrastructure constraint needs some time before it is put in place." But Hayek added that Alfa has the flexibility to work around this constraint by using a microwave backbone until the fiber infrastructure is put in place in the next year or two. "We do not have any constraint on the capacity side and we can increase it based on the subscribers' needs," he noted.

Hayek expects that 50 percent of Alfa's subscribers will opt for 3.5G during the next five years. He said that Alfa has sent some recommendations to the Telecommunications Ministry for offering its clients with an unlimited package of 3.5G at a good price.

"We cannot afford being expensive because the technology is already coming late to Lebanon and the cost of operating the 3G network has been reduced tremendously compared to the past years," he said.

___ To see more of The Daily Star, or to subscribe to the newspaper, go to http://www.dailystar.com.lb.

Copyright (c) 2011, The Daily Star, Beirut, Lebanon Distributed by McClatchy-Tribune Information Services.

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