Lebanese telecoms upgrade worth $500 million: minister
http://www.reuters.com/article/idUSTRE69H3U820101018
(Reuters) - An overhaul in Lebanon's telecoms infrastructure, including upgrades to the broadband network over the next 16 months, will generate up to $500 million in new investments, the country's telecoms minister said on Monday.
In its current state the network lags far behind others in the region, with high-priced services, limited Internet capacity and slow connections, all of which have discouraged investors from establishing businesses in Lebanon.
Charbel Nahhas also told the Reuters Middle East Investment Summit the privatisation of the two state-owned mobile firms, MTC Touch and Alfa, would not take place before improvements in the infrastructure were complete in 2012.
Nahhas said that $160 million in investments in a fiber-optic network and the introduction of 3G services would "remove a lock," translating to more investments and jobs.
"The expected increase in GDP once the proper broadband set-up is put in place, is 1.4-1.5 percent," Nahhas told Reuters, or "$300 million to $500 million in terms of investments across the sectors, accompanying the upgrade."
A $41 million contract has been awarded to Lebanon's Consolidated Engineering and Trading, with France's Alcatel-Lucent (ALUA.PA) acting as subcontractor, to cover the civil works and fiber deployment in the first round of creating the fiber-optics network.
Nahhas said that phase would be completed in 16 months, while the second and third stages concerning optical equipment and switches would be ready before then.
The ministry has also upgraded an existing submarine cable that links Lebanon and Syria to Cyprus. The introduction of 3G services should be operational in the first half of next year.
"These three steps are inter-linked because if we do not have sufficient external capacity, it's no use to have an increase in the domestic, whether on the wireless or wired network," Nahhas told Reuters in Beirut.
"Once this step is done, this translates into a complete change in the picture," he said.
Nahhas said he foresaw an increase in demand in retail and corporate use such as media, virtual private networking (VPN) for large businesses and telepresence, all of which will require investments by content providers and specialized service providers.
PRIVATISATION
Nahhas also said he did not expect to see the government attempting to privatize the two state-owned mobile telecoms firms until the network had been modernized and therefore made more attractive to users and potential investors alike.
"What we are going to do ... is to open very widely, through a proper licensing framework, the field to private investors at the level of provision of services and provision of content."
When asked if that meant privatisation of the state mobile firms would not occur until the upgrades are complete in 16 months' time, Nahhas said: "Yes."
