Lebanon: Cell Phone Prices to Drop

The Lebanese blogosphere has had a lukewarm response to a Government announcement that cell prices are due to fall.

Telecommunications Minister Gibran Bassil revealed that new short-term contracts signed with network operators Orascom and Zain will commence in March, despite continued promises to privatise the state-owned networks and provide a third provider.

Bassil expects the call rates to drop by 10 per cent in coming months, whilst Orascom and Zain have pledged to boost mobile subscriptions to 400,000 by the end of April.

Lebanon's cell rates are currently among the highest in the world, and have long been a cause of political friction and social discontent. Consequently, Lebanon's mobile subscription numbers are among the lowest in the Middle East with 1.3million subscribers out of a population of 4m.

Liliane has cautiously welcomed the new deal, but laments the lack of new mobile technology available in the country and believes the new contracts still fall short of expectations:

They are still not great, and don't include any new services (3G?), but definitely better than what we have now.

I was hoping they would also come up with charging by the second instead of the minute (for example, if you make a call of 1 minute and 10 seconds, you get charged for 2 minutes). Fingers crossed, maybe in the next decade.

The deal received sharp criticism from Rami who has condemned the functionality of the telecommunications sector and believes the Lebanese will continue to be “robbed” with no rate relief in sight:

Well, let me tell you something Mr. Bassil, what we have in the mobile telephony sector right now is a duopoly, it’s actually a monopoly since the two operators are controlled by the government, but let’s assume it’s a duopoly. Do you know what kind of pricing strategies are followed in such cases? ANYTHING but price wars!

Seriously, come to think of it! They both have almost the same prices, and they’re sharing the market almost equally. Why would they want to go into price wars and risk lowering their profits? In case there will be a price decrease, they will BOTH agree on it. No marketer will ever work against the good of their firm. I doubt there will be a significant decrease in price by the way, we will never reach what’s set in Egypt and other Arab countries for example.

So, Mr. Bassil, you seem to be just like all the previous ministers (until time proves me wrong), you promised us the stars and delivered nothing until now. We’re being robbed and we will always be robbed!

Ya3neh [This means] we’re getting raped and might as well like it! Otherwise we get no phone line!

Meanwhile, Jamal's Propaganda highlights the political irony and/or hypocrisy of rewarding the contract to Egypt's Orascom. Orascom's major shareholder is Naguib Sawiris, the largest Arab investor in Israel. Lebanon's Telecommunications Minister Gibran Bassil is affiliated with the Free Patriotic Movement, a key Hezbollah ally:

1. Hezbollah is allied with the Free Patriotic Movement

2. FPM counts Gibran Bassil as a senior member

3. Gibran Bassil is the minister of telecom in Lebanon's schizophrenic national unity government

4. The ministry of telecom awarded a mobile network operation contract to Egyptian Orascom

5. Orascom is majority owned by Naguib Sawiris

6. Naguib Sawiris, through Orascom, is the biggest investor from an Arab country in Israel

P.S. This deal was signed by the “pro-resistance axis” during the Israeli massacres in Gaza.

Friday Lunch Club made point of an Oxford Business Group report that revealed Bassil also added new stipulations to any proposed privatisation that would guarantee Lebanese majority share:

There has been some opposition to the privatisation of the two networks, with critics asking why the state would sell off such profitable assets. Last year, before becoming part of the national unity government, the Islamist Hizbollah bloc opposed the privatisation, on the grounds that much-needed revenue would be lost and a strategic asset would be transferred out of Lebanese hands. By mandating majority local ownership, at least some of this opposition may be quelled.

1 comment

  • anthony

    and now that the tariffs were set
    what do you think???

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