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French Version

Lebanese mobile network changes name, not high rates (Daily Star)

Kuwait-based MTC promises extended coverage
New developements do little to gloss over past financial Controversies

Kuwait-based Mobile Telecommunications Company (MTC) unveiled a new brand name for its recent venture into the lucrative Lebanese cell phone market on Friday - but no change in mobile rates, which, for now, will remain among the world's highest.

The former Lebanese wireless network LibanCell will now be known as MTC Touch - becoming the company's fifth mobile operation in the Middle East, in addition to Kuwait, Bahrain, Jordan and Iraq.

But for consumers, the announcement will be seen as a relatively benign name change following a similar move at Lebanon's other mobile network. Cellis, now known as Alpha, changed its name as part of a takeover by a Saudi-German owned subsidiary of Deutch Telekom.

MTC general director Saad al-Barrak flew in for the re-branding event, which quickly transformed into a heated question-and-answer debate, with journalists reviving a gambit of scandals that have plagued the sector since its inception in 1994.

Barrak was asked to revisit comments he made earlier this year suggesting the local telecom industry had been seen as on a par with the Arab-Israeli conflict. The latter, he said jokingly, would have been easier to resolve.

Barrak defended criticism from some local politicians over the $10 million government-backed rebranding scheme (to be split between the two networks), saying MTC's annual advertising budget exceeds $30 million. He also disowned past controversies such as the uncertain fate of individual $500 deposits that were accepted for a line in the early 1990's, long before MTC took over this year. But he couldn't help but comment that a new cellular line costs only $30 in Iraq.

On the upside, Barrak touted a successful transition despite the mass exodus of LibanCell staff in favor of state-brokered indemnities, in addition to inheriting equipment that "had not been upgraded for years."

He said the firm hired 160 new staff members and promised to improve coverage, though the Telecommunications Ministry, he explained, has not yet responded to a proposal for cutting prices.

In Lebanon, pre-paid cell phone calls are roughly charged by the minute, with rates ranging up to approximately 50 U.S. cents per minute and first minute charges often doubled depending on the service. In the absence of free-market competition, tariff rates are set by the government, which owns both networks and largely sees the sector as a cash cow for the Finance Ministry.

After breaking off contracts with Liban Cell and Cellis - which both enjoyed close ties to local politicians - the government chose the two new firms to run its networks in June - at bids that were 30 percent less than their predecessors, or roughly $4 million per month.

Last week, the government said that it had generated over $1.2 billion in mobile revenues from September 2002 to August 2004, excluding "operating, development and expansion" costs. There is still no word on plans to privatize the sector, which were first promised in 2002 at the "Paris II" donors' conference.

Beirut 29-11-2004
Habib Battah
The Daily Star

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