Telecoms revenues grow to $1.4 billion

3G triples mobile Internet subscriptions size

Revenues transferred to the Treasury from the telecommunications sector totaled $1.4 billion in 2011, the Ministry of Telecommunications (MoT) said in its one-year progress report (July 2011 – July 2012). Telecoms was the second income-generating sector for the Treasury after VAT.

Revenues from Telecoms grew by 52 percent over a four-year period. “Relying only on the increase in revenues generated by Telecoms is not enough to say that the sector is well-developed,” according to a consultant for the Information and Communications Technologies (ICT) State Committee.

Mobile Internet took a big step further with the implementation of the 3G network. Subscribers to mobile Internet increased from 280,000 in June 2011 to 722,000 in May 2012. More than 90 percent of the country is technically covered by the 3G network. The network infrastructure is 4G-enabled, which makes switching to the 4G network easier. But, according to the ICT consultant, 3G services are not yet fully efficient throughout the country: “Network breaks and outages are still frequently experienced by users.”

The mobile phone penetration rate has reached 85 percent so far. Subscription fees witnessed a 40 percent reduction in one year. The penetration rate was around 75 percent at end-2011.

The fixed Broadband penetration rate rose to 24 percent. DSL subscriptions reached 240,000 (in May 2012). Prices of DSL packages were reduced by an average of 80 percent. “Despite the significant price cuts, Lebanon still has one of the highest ICT bills worldwide,” the consultant said. According to this source, the State has always viewed the Telecoms sector as an income generator, rather than a catalyst to development and growth.

The MoT said several plans to upgrade Telecoms services are in the pipeline. These include shifting mobile Internet services to 4G, which will be available by April 2013, as well as the use of the fiber optics network, which will be launched by mid-2013.

The MoT has also started negotiations with Cyprus to replace the current marine Internet cable, Cadmos, with a new high-capacity cable, named Europa. The ministry’s contribution will be less than $10 million. The transition aims at improving connectivity and efficiency.