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TMCNet: Nahhas expresses reservations over plans to privatize telecom: Lebanese minister refuses to turn state monopoly into private monopoly

[November 17, 2009]

Nahhas expresses reservations over plans to privatize telecom: Lebanese minister refuses to turn state monopoly into private monopoly

BEIRUT, Nov 18, 2009 (The Daily Star - McClatchy-Tribune Information Services via COMTEX) -- Newly appointed Telecom Minister Charbel Nahhas on Tuesday clearly voiced his rejection of the government's bold privatization program when he explicitly said he won't turn the state monopoly to a private monopoly. Speaking to reporters after taking his position from predecessor Minister Jebran Bassil, Nahhas said: "Some people think of selling the state owned monopoly to a private monopoly and this will never happen." This is the first clear indication that Nahhas, who was named by leader of the Free Patriotic Movement Michel Aoun, will not facilitate the transfer of the lucrative telecom sector to private companies.

The previous government of former Prime Minister Fouad Siniora failed to auction off the two cellular networks in 2007 and 2008 due to the acute political discord, security incidents and the Israeli war on Lebanon in the summer of 2006.

Prime Minister Saad Hariri and his team are keen to implement the remaining clauses of Paris III donor conference and one of the key elements in this program is the privatization of the telecom and electricity.

Some pro-privatization telecom experts argue that Lebanon can generate up to $6 billion if Lebanon sold the two cellular networks to private companies.

All the proceeds from privatization will go to reduce the country's $48.5 billion public debt, or 150 percent of Leba-non's GDP.

The ministers are still debating the ministerial statement and one of the top items in the agenda is the endorsement of the privatization program.

Nahhas said his efforts will focus on raising the value of the telecom sector because telecom is a productive sector.

"The duty of the minister is to set regulatory rules for this sector by guaranteeing operation and dismantling all the pile ups resulting from the intertwining of prerogatives," the minister said.

He added that the telecom sector has an economic and service purpose and all the formulas are nothing more than means to achieve certain tasks.

Nahhas suggested that he may consider reducing the telecom tariffs further, arguing that some of these tariffs are nothing more than taxes.

Among the few tasks Nahhas will work on during his term is guaranteeing operation, maintenance and investments in the telecom sector.

The second task is to separate or dissolve the authority in the telecom sector.

"Behind these prerogatives there are interests and this by itself exceeds the matters with the individuals," Nahhas said.

He stressed that the ministry should set a balance between urgent and important.

Sources wondered whther the Telecom Regulatory Authority (TRA) will face problems with Nahhas, especially since Bassil refused to hand over responsibilities to the TRA.

It is worth noting that revenues from cellular networks and fixed lines are generating more than $1 billion each year for the treasury.

At present, there are 2.4 million mobile subscribers in Lebanon from 1.4 million more than a year ago.

Bassil for his part said that the impost important part in the telecom policy which he presented few months ago is the liberalization of the sector and all the way to privatization.

Bassil has always argued that the state and the Lebanese public should retain a stake in the telecom if a chunk of the telecom was sold to a private firm.

He enumerated some of the achievements at his ministry during his term such as reducing the mobile bill from an average of $75 in August 2008, one of the highest in the world, to less than $50 a month.

"My goal originally is to reduce the monthly bill between $30 to $35 in 2010," Bassil said.

He added that mobile penetration in Lebanon rose from 32 percent to 50 percent and the number of subscribers jumped from 1.2 million to 2.286 million while capacity increased to an additional 1 million subscribers.

Bassil said that despite this reduction in tariffs the Telecom Ministry saw revenues from this sector rise by $139 million up to September 2009.

To see more of the Daily Star, or to subscribe to the newspaper, go to http://www.dailystar.com.lb. Copyright (c) 2009, The Daily Star, Beirut, Lebanon Distributed by McClatchy-Tribune Information Services. For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.

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