The telecom market
stands at over $740 million

Stakeholders agree that the 2020 telecom vision will boost the sector

The Ministry of Telecom (MoT) announced last Wednesday its ‘Lebanon 2020 Digital Telecom vision’, an action plan that will take the telecom sector to the next level of development, introducing the ‘Internet of things’ concept, which is the linking of people and objects through the Internet.

“Our action plan functions on two levels,” said Minister Boutros Harb. The first one involves the fiber optics network, which will link all end users by 2020. This connectivity will happen in four ways: Fiber to companies, fiber to cabinets, and two phases will secure the domestic usage of the network. The second looks into improving and enlarging the capacity and performance of the mobile telephony network.

Only 16 percent of the geography of the country is covered by the 4G network,” he said. The MoT is working on optimizing the 4G coverage, in order to reach more easily the fifth generation of mobile Internet, which would allow us to access the Internet of Things era. Harb said that 4G will cover the country within two years.

During the development phase, the country will keep on using the current copper network for DSL Internet, but the fiber optics network will be ready successively.

The Ministry has already held three testing pilot projects to experiment with the fiber optics network readiness: The fiber optic to office at Bank Audi Beirut, the fiber optics to the home at the Beirut 2020 building, and the fiber optics to cabinet at Ras Maska, with over 50 Mbps of Internet speed.

Harb said that the project costs millions of dollars that are fundable through the MoT’s yearly budget and through mobile telephony revenues.

“Our bet on this plan will open horizons, opportunities. It will allow expats with bright minds to come back and invest in their country and will create jobs,” Harb said.

According to Abdel Menhem Youssef, Director General of Ogero, investing in the sector during this phase will be very profitable. “We have to be ready to be part of this ‘Big Data’ wave,” he said. In 2020, over 50 billion objects worldwide will be connected to the Internet, according to Youssef. The value of this market is estimated at $8,000 billion.

He said that local Internet usage has grown from 15 million GB in 2007 to 310 million in 2015. The value of this market is valued at over $740 million.

“By 2020, there will be 34 million connected objects and data traffic will reach 17 billion,” Youssef said. The sector will create 50,000 new job opportunities, according to Youssef.

Nizar Zahreddine, Operation and IT Manager at NetCommerce, a local online payment platform, said that boosting the Internet speed will be reflected positively in many sectors, including the e-shopping business. “Over 60 percent of purchases are made online using credit cards and improving the Internet’s speed will drive more users. This rate was at 40 percent two years ago. The growth is exponential,” he said. E-transactions are achieved within three seconds now, but with the increase in the Internet’s speed, they will take only one.

According to Thérèse Khairallah, General Manager of IDM, a local Internet service provider, parts of the 2020 vision were already completed but never used, such as the fiber optic network installation. “If the MoT manages to stick to deadlines and implements this project fast, achievements will be remarkable. But if delays happen, we would be running after a technology that is already in the past, whereas the whole world will be experiencing advancements,” she said.

According to Khairallah, the private sector is not yet involved in selling services through fiber optics networks. Once activated, the MoT will be responsible for selling services over the network. “Prior to launching DSL, the MoT allowed private sector stakeholders to benefit and use the public infrastructure to sell Internet services. So far, no decree or decision has been made to allow us access the fiber optics network,” said Khairallah.

Fawaz Hamidi, BIAT’s General Manager, said that the implementation of the 2020 vision will boost the startup community and will drive more entrepreneurs to believe and realize their ideas. “The smart technology relies on the Internet. Announcing the days of better connectivity will surely be a big turning point in our society,” he said. It is the first time that the MoT has had a long term action plan and strategy activated, according to Hamidi. “We are now more sure that we have the public sector on our side and that we will be able to move in parallel. The private sector will do much more when public regulations and plans are on its side,” he said.

Ziad Hayek, Secretary General of the Higher Council for Privatization said that the 2020 vision involves technical improvements in the ICT sector. “The plan entails investments in the infrastructure pushing the quality of services forward,” he said. But according to Hayek, the plan still requires to be completed by liberalizing the sector and privatizing it. “Minister Harb is certain about this fact, this is why he insisted on activating works on the Liban Telecom project,” he said. According to him, liberalizing the sector won’t only improve its administration and revenues, but will also create competitiveness, which will optimize services.