In an interview with ArabNet on August 9, Cedarcom CEO Imad Tarabay sounds the alarm bells for the telecom sector in Lebanon. “We have the laws, we’ve heard hopeful promises, now we’re waiting for implementation. Delays to execute improvements have reached the critical stage. An entire segment of the private sector could be forced out of the market. It’s time to act.”

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INTERVIEW WITH IMAD TARABAY CEO OF
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Nacouzi
By Fouad Berjaoui | August 9, 2011 | Section: Interviews | 0 Comments and 0 Reactions
The Lebanese Internet scene is going through a long overdue makeover.
From the last three Telecom Ministers we’ve been hearing of an imminent
restructuring and upgrade which keeps being postponed due to political
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feuds in the country. We know what the people want, we know what the Nabbout
Telecom Ministry has been announcing but we haven’t heard from the
local Data Operators and ISPs … except for one man who spared no effort to voice his concerns
regarding a viable system that would represent a win-win scenario for all concerned: the
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Government, the private sector and the end-user. That man is Imad Tarabay, CEO of CEDARCOM
who laid out his perspective and concerns to ArabNet:
“The Key term in our opinion for any activity is sustained innovation and this is not only a 8/3C$/ DE1: DF#G/ H: %5;1I:
business practice we at Cedarcom believe in, but the theme used in my current lobbying activity with %"JKLM$/ *: by Farah Nacouzi
our industry circles and the Lebanese Government.
The Lebanese Telecom Ministry is gearing up for radical changes in the data and internet sector. For The Media Industry:
However, any service that has to be introduced has to include market competition otherwise there 'Aggregation Is King' by
would be no incentive for the operator to innovate and prices will remain fixed. Wael Nabbout
A Monopoly’s purpose is to make more profits, with no incentive for innovation and absolutely no
The Greatest Game
incentive to give a better customer service. Unfortunately this is the case of the mobile GSM sector in
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Lebanon since the nineties. Kayali
So how can we sustain innovation? First we have to sustain competition, and second it has to be an
equal and fair competition. In such an environment, we as a company have to constantly be Announcing The Arabnet
innovative. If we innovate and you are my competitor, you lose market share, hence find yourself
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forced to bring even more innovation to the market to regain your lost market share, which in turn
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prompts me to react and the loop of innovation cycle starts again. The ultimate beneficiary here is ArabNet Team
the end consumer who ends with lower “competitive” prices and a better customer service. Interview With Imad
Tarabay Ceo Of
If an end user were to choose an internet connection, he/she would find that all connection Cedarcom by Fouad
Berjaoui
packages are roughly the same in speed and price. Why? Because the international component of
these packages (E1 Lines) is held by a monopole entity. i.e. the Government. Announcing
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Currently our largest obstacle is the absence of fair competition, which causes absence of Acceleration Program For
innovation. The services offered today remain stagnant and in time become obsolete compared to Internet And Mobile
other countries. The consumer is connecting to the internet with elaborate modern devices that are Entrepreneurs by Wael
Nabbout
becoming less and less compatible with obsolete internet protocols. The whole connectivity system

2. seems to be collapsing. On one hand, Lebanon has very fair and advanced laws concerning !" #$%& '()* +,-./ 0" 123%4"
telecommunications; on the other hand, these laws are not being implemented. 56" by Farah Nacouzi
Let’s segment Lebanon’s internet connection environment:
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First you have Lebanon’s connection to the international internet backbone which is done through
the IMEWE cable, Cadmus Cable and others. This is completely controlled and operated by the ArabNet Conference on Facebook
Government who then sets the pricing structure through a Cabinet decree. Current prices were set Like
forth in a decree dating back to 2006 (yes, 5 years ago).
2,994 people like ArabNet Conference.
Second, you have the internal country network through deployment of fiber optic cables. Currently
there is only one legal entity, belonging to the government which conducts this operation, and you
have loads of illegal cable operators who are laying fiber optic cables illegally without licenses.
Esam Ahmed Tarek Ammar Hussam
The Third component is the end-user access. Here also you have two main components: wireless
DSL through wireless USB dongles and desktop modems, where 4 companies compete, and fixed
line DSL provided by 6 competing companies but controlled by Ogero. Manal Ahmed Sabeur Mohamed
Abdallah Fahd
For us service providers, another major hurdle (in addition to lack of fair competition mentioned
earlier) is the “one year license”. As a business decision maker you cannot believe the hindrance
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this fact represents to all Data Service Providers (DSP). If you’re trying to invest in this market for a M.Sherbeeny Asmaa Lucienne
million dollar or 10 million dollar who will invest knowing that his license to operate will expire on
the 31 st of December of each year? I want to invest but my shareholders are holding me back. If I
want to raise more capital, I cannot. If I try to get a loan from the bank, I cannot. No creditor or
investor will place capital money with you if your license to operate will expire by the end of the year
with no guarantees to renewal. This is another factor hampering innovation.
The newly appointed minister Mr. Nicolas Sahnaoui did a very good job by appointing a new team
of advisors to aid him in formulating an action plan. The team is made of young, energetic and
highly qualified consultants who not only are aware of the current crisis, but have an open-horizon
outlook and believe in liberalization and fair competition.
Now that we are connected to the backbone through the IMWE and other cables, the Government
has the capacity to solve the crisis in a matter of 3 days while at the same boosting Lebanon’s
economy. This can be achieved by the following regulatory steps:
1. Each operator is granted a 15 or 20 years license. Knowing that our equipment is depreciated over
5 years, this will incite us to invest more and more in technological innovations on the long run.
2. The Government can compel each company to list itself in the Beirut Stock exchange within a
grace period of 2 years; otherwise the license will be revoked. This will ensure unbiased and fair
treatment, while at the same time removing any possibility of favoritism since any Lebanese
citizen can invest in any of the local internet access companies. The Government can place strict
regulatory investment rules to prevent financial cartels from buying all the shares.
3. Each data operator is forced to have to have a coverage roll-out of 85% over the Lebanese
territories otherwise the license will be revoked.
4. The Government can set a unified license fee which it deems adequate for all companies involved.
This vision has been placed in the master policy document put forth by Minister Gibran Bassil and
this is what we are lobbying for in all our efforts. This master policy document did not see the light
spontaneously, but rather the result of years of expert studies starting with Law 431/2002 which
came out in 2002 in addition to recommendations from TRA.
Minister Gibran Bassil took the draft recommendations from TRA (Lebanese Telecom Regulatory
Authority), he then gathered around 150 high profiled corporate telecom executives, out of which
around 50 were local Lebanese residents and around 100 were Lebanese residing abroad. The
gathering took place at Al-Habtoor hotel in Beirut for one day. Mr. Bassil then formed a reduced
action cell which for the next 5 month produced a telecom master document that envisions the
future of Lebanon’s telecom sector. We are asking for the implementation of general rules for
regulating Telecoms or what is known as “Telecom Policy Paper”.
This document envisions Lebanon to become an information society by 2013. How can you build an
information society when you have a monopoly?

3. This master document also enforces liberalization and privatization. Here, many people make an
error in confusing both terms. Bassil’s General Rules for Telecommunication Regulation talked
about liberalization where local and international companies can compete openly. His General
Rules also outlined privatization of the telecom sector based on strict rules that allow fairness and
transparency of the privatization process.
We have the laws; we’ve heard hopeful promises, now we are waiting for implementation. Further
delays to execute improvement plans have reached a critical stage where we might see an entire
segment of the private sector forced out of the market. It’s time to act.
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