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Waiting on the line

DESPITE RECENT ANNOUNCEMENTS OF IMPROVEMENTS, THE TELECOMMUNICATIONS SECTOR WILL CONTINUE TO LAG

by Executive Editors

The Lebanese might be excused for laughing at the suggestion that their country is set to become a regional telecommunications hub. But while farcical Internet speeds, unreliable service and inflated prices justify such cynicism, the man at the helm of the sector, Minister of Telecommunications Nicolas Sehnaoui, insists that this is indeed the path on which Lebanon is set.

In an effort to improve the country’s languishing state of connectivity, the Ministry of Telecommunications (MoT) and the Cyprus Telecommunications Authority (Cyta) entered into an agreement in early March to share capacity on Cyta’s Alexandros submarine cable. Lebanon will enjoy 24 percent. Designs are also under way to construct a new submarine cable, dubbed “Europa,” that will link Cyprus to Lebanon.

Lebanon today relies primarily on two international cables for its Internet connection: IMEWE  (India-Middle East-Western Europe) and Cadmos. Beginning construction on the new Europa cable is critical, as it is meant to replace the Cadmos line, which is scheduled to ‘die’ in five years. According to a June 2012 MoT market report, Lebanon’s contribution to the construction of the cable will be less than $10 million, excluding the cost of  the equipment.

“I am very proud to say that this step is a historical step for Lebanon [and] Cyprus,” said Sehnaoui in a press conference in Sassine Square to announce the deal. “It gives us the redundancy we badly need because no regional hub can claim it is a regional hub if it doesn’t  have redundancy.”

The need for redundancy was stressed last summer when Lebanon’s connection to IMEWE was damaged. A country-wide Internet blackout lasted for several days, and the MoT estimated $11 million per day in economic losses.

The Alexandros cable can potentially provide up to 700 gigabytes per second (gbps) of additional Internet throughput to Lebanon. This may rise with future technological advancements. This augments the 200 gbps of capacity currently available on IMEWE and 79 gbps on Cadmos.  Lebanon’s actual in-service capacity, however, is closer to around 30 gbps today – a significant increase from 3 gbps in mid-2011. This figure represents the rented capacity on the submarine cables as well as the local fiber-optic transmission capacity in place to handle the bandwidth to-and-from the international Internet gateways.

“Eventually, we want to be able to sell capacity. We have now a cable that connects Lebanon to Syria,” said Ministry Adviser Firas Abi-Nassif.  “We can sell on any cable such as IMEWE or Beritar [an Internet cable connecting to Syria].”

Abi-Nassif remained vague on how much bandwidth will be distributed domestically versus sold regionally, but he maintained that the first priority is to distribute the additional throughput to Lebanese consumers. He noted that the current political situation in Syria might dampen plans to distribute excess capacity.   

Unused bandwidth is necessary for future upgrades and unforeseen connection problems, making it integral for development in the sector. However, while more international bandwidth should translate into faster speeds and lower costs, the ministry still needs to overcome several obstacles if they are to capitalize on all of the additional capacity that they have purchased.

Beset by in-fighting

“Delays have hit the utilization of increased international broadband bandwidth, with the finger of blame pointed both at the government and Ogero,” said Tom Shepherd, research analyst at TeleGeography. “Political squabbles continue to beset the [telecommunications] sector.”

Ogero is the cornerstone of Lebanon’s telecoms sector, responsible for connecting the telecoms network internationally as well as internally. Although in theory Ogero is government-owned and operates under the supervision of the MoT, it has often acted against MoT policies, leading to confusion in the industry and delayed Internet access for users.

When the IMEWE cable was first opened in December 2010, Ogero and the MoT clashed publicly, with more than eight months passing before the international bandwidth was distributed to consumers in July 2011. The conflicting political affiliations and agendas of the MoT and Ogero are likely to remain a deadweight on the industry’s advancement in the              foreseeable future.

Ogero has also been accused of not distributing bandwidth packages to Internet service providers (ISPs), akin to choking competition in the supply of Internet. These packages, known as E1s, are what allow ISPs to deliver Internet to consumers. By restricting their supply, Ogero is inhibiting private ISPs from competing with the state.

Ministry Adviser Abi-Nassif confirmed that ISPs claim to have not received their mandated E1 allocations from Ogero and maintained that “there should be absolutely no reason why, for other than technical reasons, there should be problems giving                        [out] bandwidth.”

Falling at the final hurdle

Another hurdle facing the MoT is modernizing the ‘last mile’ connection of the delivery network, where speeds bottleneck in Lebanon. If infrastructure between ISPs and consumers remains outdated, end-users will not enjoy higher Internet speeds despite the additional bandwidth from abroad. ISPs are not legally allowed to install these ‘last mile’ connections; they must rely on Ogero and the MoT, instead.

“Before IMEWE, there was no reason to do a proper network so there was almost no fiber optic network,” said Denys Fedoryshchenko, information technology consultant at Virtual ISP, a local service provider.

The ministry’s plans include rolling out a fiber-to-home project in select areas as well as upgrading current connections that use older technology such as DSL. The ministry aims to have 100 percent ‘last mile’ coverage from these two initiatives.  Ogero, however, recently announced that they had not received funding from the MoT for their projects over the past two years. Abi-Nassif acknowledged this and said that whatever funding Ogero needed for the ‘last mile’ connection, “the ministry is happy to provide it.” He declined to comment on where funding for  the fiber-to-home project would come from.   Minister Sehnaoui also announced in December his plan for “delayering” or restructuring the industry, aiming to decrease the government’s presence and allow privatization in certain areas. Most of the press on the new plan has focused on what this means for mobile, but the MoT confirmed to Executive that the delayering plan applies to the whole industry.  The plan has come under considerable scrutiny as it does little to encourage meaningful private sector involvement and is likely to only superficially increase competition or incentivize infrastructure investment.

In a global ranking of Internet download speeds, Lebanon ranks number 153 out of 184 according to NetIndex.com, fairing worse than Afghanistan and Zimbabwe. 

Although the ministry has made some commendable headway, such as through the Alexandros cable deal, major political and technical obstacles remain. There is still a long way to go before we are even close to the minister’s stated goal of Lebanon becoming a regional telecommunications hub.  

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Executive Editors

Executive Editors are the virtuosos behind Executive’s compelling narratives. Over decades, our editorial team has applied a blend of seasoned expertise, intellectual wit, and a discerning eye to bring you insightful and engaging stories that eschew sensationalism
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