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French Version

Telecommunications Ministry gets aggressive on plans to cut mobile phone rates (Daily Star)

Recently, the corridors of the Telecommunications Ministry have been buzzing in a tone that has been missing for some time: a tone of industry. After successfully awarding management contracts for the two mobile phone networks to Detecon and MTC in April - a process commended by the International Monetary Fund (IMF) for its transparency - the ministry is now actively working on a proposal, to be submitted to the Cabinet, to lower the costs of cellular phone calls.

According to sources, the ministry has been working hand in hand with industry experts and the firms managing the mobile phone networks to uncover the best solution for a sector whose potential has long been held back by political disagreements.

And preliminary information suggests the ministry's plan is rock solid - at least when compared with other networks in the region.

The proposal will include the following:

1. Cancelation of the $25 monthly subscription fee.
2. Charging customers on a per-second basis instead of the current per-minute basis.
3. Cutting communication costs by 20 percent at specific off-peak times such as at night, on weekends and during holidays, while keeping the same rate during peak times.
4. Reducing the cost of the prepaid phone-charging cards.
5. Promoting a fixed, six-month validity date for prepaid charging cards.

If implemented, Lebanon's mobile sector would once again join the best networks in the region. Currently, 500 minutes of mobile phone time in Lebanon costs approximately $121, while monthly fees reach a staggering $37.5. In the United Arab Emirates the same call time costs $39 ($5.5 monthly fee), in Syria $65 ($11.7 monthly fees), in Jordan $66 ($12 monthly fees) and in Egypt $42 ($5.5 monthly fees).

However, these new regulations, if passed, would not be implemented before 2005 - probably just before the ministry begins releasing new mobile phone lines in substantial quantities to create an "economy of scale" effect.

Studies undertaken by the ministry and their consultants, Euro-Strategies, have shown that these communication costs reductions will not diminish revenues in their first year - except perhaps by a negligible amount. Moreover, according to the same studies, revenues will start increasing from the second year onward.

Without doubt, a reduction in communication costs and subscription fees with the introduction of significant number of lines would be a good start for the modernization of Lebanon's mobile sector that would both swell state coffers and alleviate the burden on customers' pockets. These measures will also pave the way for privatization of the sector since they will substantially increase the value of the networks. Hopefully, the ministry's buzz will be heard loud and clear.

Beirut 12-07-2004
Tarek El Zein
The Daily Star

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