20081103_Telecommunications Liberalization and Regulatory ...

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Dec 12, 2013 (3 years and 7 months ago)

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Telecommunications Liberalization
and Regulatory Framework in
Lebanon

Re
-
farming for Broadband Lebanon

Dr. Imad Y. Hoballah

Commissioner, Board Member, Head of Telecommunications Technologies Unit

Telecommunications Regulatory Authority
(TRA)

Lebanon

www.tra.gov.lb



2

Although reform has started with TRA establishment, most telecom
markets in Lebanon are stagnant and suffer from lack of competition

Indicators

30%

Mobile Market

Fixed Market

Internet
Market

ADSL Market

2

Penetration

Number of
Service
Providers

Private /

State
-
Owned

Level of
Competition

State
-
Owned

Monopoly

60
%

(*)


1

State
-
Owned

Monopoly

32.5%

(*)

~ 16

Private

Competition

~
4.5
%
(*)

~
8

Private through
MoT

Local Loop /
Ogero


Limited
Competition

(*) per household

3
-

Nov
-

2008

TRA Lebanon


Existing Market

3

The Lebanese fixed and mobile services markets have been stagnant

and the data and internet services market have been constrained


3

Fixed

Mobile

Broadband

1

2

3

Strengths

Weaknesses


Relatively good copper infrastructure


Regionally competitive price per minute



No competition


No incentive to upgrade the infrastructure and
introduce new technologies


Low penetration rate


Stagnant growth


Pent up demand for mobile services


High mobile revenues per user


No competition


Lag behind in terms of new technologies (e.g.
MMS, EDGE, 3G)


High connection and subscription charges


High per minute prices


Limited choice in mobile packages, Low QoS


Saturated mobile network /no upgrade


Low Penetration


Relatively competitive


Lucrative segment


New wireless technologies deployed


Pent
-
up demand for data and internet
services


ADSL services were recently launched


Access is hindered by incumbent operator


Until recently, high international bandwidth prices


Moving towards certainty with regulatory
framework

International
Access

4


Future expansion Plans ( I
-
ME
-
WE)


No competition


No transparent allocation spectrum


Limited capacity


High prices for retail

3
-

Nov
-

2008

TRA Lebanon


Existing Market

4

Penetration of telecommunications services in Lebanon between

2000 and 2007 has increased very slowly

Source: Globalcomms, operator data, ITU, Arab Advisors Group

0%

5%

10
%

15
%

20
%

25
%

30%

35%

2000

2001

2002

2003

2004

2005

2006

2007

Fixed line penetration

Mobile penetration

Broadband penetration

Internet penetration

3
-

Nov
-

2008

TRA Lebanon


Existing Market

5


The telecommunications market is still underdeveloped
compared to other countries


Bahrain
Jordan
Morocco
Tunisia
United Arab
Emirates
Egypt
Algeria
Venezuela
Romania
Chile
South Africa
Poland
Bulgaria
Slovakia
Hungary
Singapore
Ireland
Italy
Libya
LEBANON
y = 0.3441Ln(x) - 2.1968
R2 = 0.6852
0%
20%
40%
60%
80%
100%
120%
140%
160%
180%
200%
0
10,000
20,000
30,000
40,000
50,000
60,000
LEBANON
Libya
Italy
Czech
Republic
Ireland
Singapore
Hungary
Slovakia
Bulgaria
Poland
South Africa
Chile
Romania
Venezuela
Saudi Arabia
Algeria
Egypt
United Arab
Emirates
Tunisia
Morocco
Jordan
Bahrain
Russia
Qatar
Kuwait
y = 0.2162Ln(x) - 1.1851
R2 = 0.7209
0%
20%
40%
60%
80%
100%
120%
140%
0
10,000
20,000
30,000
40,000
50,000
60,000
Libya
US
Germany
Spain
UK
Italy
France
Egypt
UAE
Qatar
KSA
Bahrain
LEBANON
Jordan
Venezuela
Saudi Arabia
Peru
Egypt
Algeria
y = 0.1165Ln(x) - 0.689
R2 = 0.483
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0
10,000
20,000
30,000
40,000
50,000
Fixed Line Penetration vs.


GDP per Capita (2005)

PSTN Penetration

GDP per Capita (USD/ Year)

Mobile Penetration

Internet Penetration

Mobile Penetration vs.

GDP per Capita (
2005
)

Internet Penetration vs.


GDP per Capita (
2005
)

GDP per Capita (USD/ Year)

GDP per Capita (USD/ Year)

Sources: Economist Intelligence Unit, interviews with industry

3
-

Nov
-

2008

TRA Lebanon


Existing Market

6

The cost of a mobile pre
-
paid/prpostpaid minute in Lebanon is
among the highest in the region due to the lack of competition and
the legacy of high taxes

60
% higher than
the regional rate

More than double
the regional rate

Mobile Postpaid Peak On
-
net Minute Rates
(2006) (US$ cents per peak minute)

Mobile Prepaid Peak On
-
net Minute Rates
(2006) (US$ per peak minute)

Note: All Rates corresponds to the lowest first minute rate

3
-

Nov
-

2008

TRA Lebanon


Existing Market

7

A typical internet user in Lebanon will spend six to eight times more

than users in similar countries due to low download ceilings

Source: Operators Websites

$0
$20
$40
$60
$80
$100
$120
$140
$160
$180
$200
Lebanon
(IDM)
Egypt
(Nile OnLine)
UAE
(Du)
Jordan
(Orange)
Lithuania
(Zebra)
Monthly charge to use
15
GB/month (
500
MB/day) using

1
Mbps ADSL connection

3
-

Nov
-

2008

TRA Lebanon


Existing Market

8

The penetration of DSL services in Lebanon is the

lowest in the region, due in part to a late start

0
2
4
6
8
10
12
Lebanon
Tunisia
Morocco
Kuwait
KSA
Qatar
UAE
1

2

2

3

4

6

11


Comparison
of DSL penetration (% of population) with
the Arab Countries in 2008

Source:

Operators Websites

3
-

Nov
-

2008

TRA Lebanon


Existing Market

9

Lebanon should

have much higher broadband
connectivity given its GDP per capita

0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
5
3,000
4,000
5,000
6,000
7,000
8,000
9,000
Colombia

Dominican
Republic

Thailand

Grenada

Tunisia

Iran

Belize

China

St Vincent et
Grenadine

Dominica

Venezuela

Algeria

Vietnam

Georgia

Jamaica

Morocco

Maldives

Peru

Fiji

Cape
Verde

Jordan

Philippines

Egypt

Lebanon

Source: UN E
-
Government Readiness Survey,
2008

Broadband Penetration
(subscribers per
100
inhabitants)
2007

GDP per capita (US$,
2007
)

3
-

Nov
-

2008

TRA Lebanon


Existing Market

10

Only a limited range of applications and services is offered in
Lebanon

Estimation of bandwidth requirements for the UK households:


By
2008
, demand for the most bandwidth intensive households could reach
18
Mbps
downstream and
3
Mbps upstream


By
2012
, the bandwidth demand for the most intensive bandwidth households could reach
23
Mbps downstream and
14
Mbps upstream

Source:
New Zealand National Broadband Strategy , Broadband Stakeholder Group UK

Teleconference

Online games

MP3 streaming

Video Conference

Multiplayers

game

Video Streaming

Video on Demand

Multi
-
Channel TV

Quality Video Streaming

5
second CD download

Web Surfing

Virtual Reality

VOIP

Telepresence


Email

0.01

0.1

1

10

100

Indicative Application Bandwidth Demand (Mbps)

Current Limit on
Residential
Broadband

3
-

Nov
-

2008

TRA Lebanon


Existing Market

11


The delay in the implementation of Law
431
and in the establishment
of the TRA could explain the lack of competition in the market


0
20
40
60
80
100
120
140
160
1990
1995
1998
2000
2002
2004
2007
14
43
86
106
124
137
148
Regulatory Agencies Worldwide (Cumulative)
3
-

Nov
-

2008

TRA Lebanon


Existing Market

12

Outline

3
-

Nov
-

2008

TRA Lebanon

I.
The Telecom Market Today


The Urgent Need for Re
-
from

II.
Lebanon’s Telecom Reform

III.
TRA Vision, Roadmap, and Progress


IV.
Current Broadband Market


V.
Broadband Spectrum Re
-
farming


VI.
Next Steps and the Way Forward

13


The GoL, recognizing the need for reform, has committed to
open the telecom sector to competition and has recognized it
as an important lever for economic development



“… there is a need to reduce the cost of production resulting mainly from
unreliable supply of electricity, the high cost of telecommunication …”


“The Government of Lebanon will implement reforms in order to improve
competitiveness and reduce the cost of doing business in Lebanon…”


“The government will seek a greater private sector role in sectors such as
telecommunications…”

International


Conference

for


Support

to


Lebanon”
-

Paris III
Conference

يرازولا نايبلا
ةموكحلل
2008

سيئرلاةلود ةموكح
ةروينسلا داؤف




(
§

56
)
إ
نزاوتملا ءامنلإا زيزعت يف مهسي وهو ينطولا داصتقلال يساسأ ك
ّ
رحم وه تلااصتلاا عاطق ن
.
نانبلو
ةيملاعلا تلااصتلاا ةروث ةبكاوم لجأ نم ةيتامولعملا عمتجم ءانب ىلإ فدهت عاطقلا اذهل ةيؤر ميدقت ىلع لمعي
تارامثتسلا قوسلا حتفو تلااصتلاا عاطق ريرحتب قايسلا اذه يف مزتلت ةينانبللا ةموكحلاو ،ةقطنملا يف اهتدايرو
قوقح ةيامحو ةسفانملاو صاخلا عاطقلا
كلهتسملا
.


The TRA is charged with promoting competition in telecommunications
(Telecommunications Law, Art.
5.1
(C)).


The Law provided for the liberalization of the telecommunications
market by privatizing state
-
owned telecommunications entities and
opening the market to private sector investments and competition.

Telecommunica
tions Law
431
/
2002

The GoL Governmental Declarations in
2005
and
2008
commit the Council of Minister
(CoM) to the liberalization of telecommunications

3
-

Nov
-

2008

TRA Lebanon


Liberalization Benefits

14

Reform of the telecom sector entails the restructuring of the
market, the establishment of an independent regulator, and a
top notch regulatory framework

Competitive

Market
Structure


Independent
Regulatory
Authority


Clean and
Stable

Regulatory
Framework

Reform and
Liberalization of
the Telecom
Sector


3
-

Nov
-

2008

TRA Lebanon


Regulatory Environment

15

The Telecommunications Law
431
requires the creation of a proper
structure for a competitive telecommunications market

Regulator

Operators


MoT: policymaker, regulator
and

service provider



CoM
: Arbitrary regulatory role


(e.g. issuing all licenses)



No formal regulatory regime

Before Telecom Law
431

After Telecom Law
431

Ministry of
Telecommunications

MoT

Policymaker



Set the general guidelines for
telecom policy



Recommend to CoM the award
of some individual licenses
(mobile/fixed, int’l voice, UMTS)



Review and propose to CoM


Pricing of Radio Frequency


TRA annual budget




Approve TRA budget & other
TRA documents as per Law
431

TRA

Regulator



Develop/implement regulations



Award telecom licenses



Ensure competition and
prevent anti
-
competitive
behavior



Manage on behalf of
GoL

radio
frequencies

Operators

Incumbents & New Entrants



Provide telecom services to the public


Install own and manage telecom networks and facilities


Abide by TRA regulations, decisions and licenses

Policymaker


2

1

3

3
-

Nov
-

2008

TRA Lebanon


Regulatory Environment

16

Telecom Law
431
also calls for additional structural reforms

MoT


Directorate General of
Construction and Equipment

Directorate General of Post

Directorate of General Control

Directorate of Common
Administrative

Directorate of Operation and
Maintenance

MoT


Directorate General of Posts

Directorate General of
Telecommunications

Joint Administrative Division

Division of Central Control

Current Structure


Mandated Structure Under the Telecom Law

Restructuring of MoT


NOT YET STARTED



The TRA views the creation and privatization of Liban Telecom as a major step in the


history of the telecommunications sector and a central component of future growth


MoT

LT

3
-

Nov
-

2008

TRA Lebanon


Regulatory Environment

17

As a first step in assuming its duties as per the Telecom Law (Law
431
), the TRA has defined its mission statement and objectives

Mission Statement

To

establish

a

regulatory

environment

that

enables

a

competitive

telecommunications

market

to

deliver

state
-
of
-
the
-
art

services

at

affordable

prices

to

the

broadest

spectrum

of

the

Lebanese

population

داجيإ

ةئيب

ةم
ِ
ظن
ُ
م

نم

اهنأش

نأ

دعاست

قوس

تلااصتلاا

يف

ميدقت

رخآ

ام

تلصوت

هيلإ

ايجولونكتلا

يف

لاجم

تامدخ

تلااصتلاا

راعسأب

،ةيسفانت

،ةلوقعمو

ىلعو

عسوأ

قاطن

نكمم

نطاوملل

ينانبللا

تاكرشللو

ةينانبللا
.



TRA Prerogatives ( Non
-
exhaustive list)



Issue Regulations and draft Decrees (Art 5)



Liberalize the market and take any necessary measure to reach a competitive market (Art
30)



Manage Radio Frequency, Interconnection agreements, numbers, equipment import, etc..
(Art 29)



License telecommunications service providers and radio frequency bands (Art 20)



Resolve disputes between service providers (Art 43)

3
-

Nov
-

2008

TRA Lebanon
-

Mission

18

Coordination exists between the TRA and other government
entities

18


MoU to effect
privatization

TRA


Ministry of
Defense

Ministry of
Public
Works and
Transport

Ministry of
Telecommu
nications

Ministry of
Information

Ministry of
Economy
and Trade

Ministry of
Justice

Ministry of
Interior

Municipalities


TRA Advice on
all Telecom
Matters


Frequency
Fees


TRA Budget


TRA Budget


Customs fees
for import of
telecom
equipment


TRA Inspection
Powers


Consumer
Protection


Frequency
Assignment


Rights of Way


Frequency
Assignment


Import
authorization


Frequency
Assignment


Broadcasting


Rights of Way


Frequency
Assignment


Import
authorization

HCP

Customs

Ministry of
Finance


Import
authorization

Work in Progress

Work in Progress

3
-

Nov
-

2008

TRA Lebanon
-

Coordination

19

Outline

3
-

Nov
-

2008

TRA Lebanon

I.
The Telecom Market Today


The Urgent Need for Re
-
from

II.
Lebanon’s Telecom Reform

III.
TRA Vision, Roadmap, and Progress


IV.
Current Broadband Market


V.
Broadband Spectrum Re
-
farming


VI.
Next Steps and the Way Forward

20





















Major steps of the Liberalization Roadmap

Mobile
Market


Executed an MOU with the Higher Council for Privatization (HCP) to ensure smooth
privatization and licensing


Launched

the Mobile Privatization and Licensing Tender Process in November
2007
:


Finalized the Financial Model for the license valuation


Developed the Online Data Room and answered bidders’ Questions


Prepared financial, legal and technical due diligences and conducted site visits


Finalized the RFA


Drafted the Mobile License


Prepared the draft Sale and Purchase Agreement

Broadband
and ISP/
DSP Market


Re
-
issued licenses for the Internet Service Providers (ISP’s) and Data Service
Providers (DSP’s) in accordance with Law
431


Authorized the use of new services including IPTV


Issued a Re
-
farming plan for Consultation


Ready for different regulations

TRA Lebanon
-

Competitive Market Structure

Creating Liban Telecom (LT)

Capacity Building
-

Building the Institution and Transitioning Responsibilities

Regulatory Framework

3
-

Nov
-

2008

21

REGULATORY FRAMEWORK

Regulations that are needed to ensure the success of
liberalization have been put in place

Issued

Type Approval Regulation

SMP Regulation

Interconnection Regulation

Decisions
:



VSAT


Trial IPTV


Spectrum trial Allocation for
MoT / OGERO

Draft Ready
Stage

Spectrum Pricing
Opinion

Broadband Policy
Statement

VOIP Policy
Statement

National Roaming

Interconnection
Interim Pricing
Decision

Drafting Stage

Accounting
Separation
Regulation

Unbundling
Regulation

Spectrum
Refarming
Guidelines

Spectrum
Management and
Licensing
Regulation

Consultation
Stage

Administering and
Implementing the
NNP

Final Review
(TRA Board)

Consumer Affairs
Regulation

Lebanese National
Frequency Table

National Numbering Plan

Liberalization
Roadmap

Licensing

Regulation

Pricing Regulation

Quality of Service Regulation

Regulatory Framework for
establishment of call centers

3
-

Nov
-

2008

TRA Lebanon
-

Clean and Stable Regulatory Framework

22

Draft

Liberalization Roadmap
proposes introducing
competition across all telecom markets while allowing
LibanTelecom some exclusivity over some services

2008

2009

2010

2011

2012

Mobile

Network Operator

Virtual Network MNVOs

PSTN/ Basic
Telephony

Network Operator

Reseller


Broadband

Access

National

International
Access

Facilities Service Provider


Reseller




3

1

***

5+

**


*
Liban

Telecom expected

** TRA is still considering the appropriate number of NBLs to issue

*** Two for the mobile licenses, one for Liban Telecom and two others for the NBLs for data traffic only

License Award

Open licensing

Market Review

Notes

*

3
-

Nov
-

2008

TRA Lebanon


Liberalization Roadmap

23

LIBAN TELECOM

The TRA views the creation, corporatization, and privatization of
Liban Telecom as a major step in the history of the telecom sector
and a central component of liberalization and future growth

Sale of up to
40% to a
strategic partner

Establishment Plan for Liban Telecom

Full sale of
Liban Telecom
Shares!

Corporatization

Maximum Two Years

TRA plan for Liban Telecom’s licensing and exclusivity rights as proposed in the
Liberalization Roadmap

Mobile
License

Fixed License

LT’s
establishment

End 2008*

1 /1/2009
-

TBD*

1
/
1
/
2010
-

TBD*

End of
exclusivity on
international
public voice
services

End of
exclusivity on
basic telephony
services

Undefi
ned
time

3
-

Nov
-

2008

TRA Lebanon


Liban Telecom

24

MOBILE

The Mobile Auction was suspended in January
2008
, but
could be held within
8
weeks from a GoL decision


Most of the preparatory work for the auction has been completed:


Executed an MOU with the Higher Council for Privatization (HCP) to ensure smooth privatization and
licensing


Launched

the Tender Process for privatization and licensing of mobile in November 2007:


Finalized the Financial Model for the license valuation


Developed the Online Data Room and answered questions submitted by bidders


Prepared financial, legal and technical due diligences and conducted site visits


Finalized the RFA


Drafted the Mobile License


Prepared the draft Sale and Purchase Agreement ( SPA)


Mobile Auction
Launch:

RFA published

January 2008


Licensing
Process
Freeze

November 2007

to+
2
(Mths)

GoL

Decision to
Re launch
Process

Auction


Announcing
two winning
bidders


to

to+ 5 (Mths)

Handover completed

Crucial phase that should
be completed smoothly
and in the specified time

Technical &
Pre
-
Auction
Financial
Bids Due

to+ 3 (Mths)

3
-

Nov
-

2008

TRA Lebanon
-

Mobile

25

BROADBAND

TRA's objective is for Lebanon to become a global leader in
broadband communications within
10
years

What is Broadband?

Broadband

refers to a wide range of technologies supporting the delivery of
innovative interactive services
, equipped with an always
-
on functionality,
providing enough local bandwidth and capacity allowing
the
simultaneous use of
voice, data, and video services

Residential Services in 2013

Business Services in 2013

For around
US$
40
/month

up to
10
Mbps

speed triple play services:


1.
High speed Internet


surfing and data
transfer

2.
Digital Entertainment


video

3.
Voice Communications


voice

For around
US$
600
/month

up to
1
Gbps

speed triple play services:


1.
High speed Internet and data transfer

2.
Digital Entertainment


video and
teleconferencing

3.
Voice Communications


voice

3
-

Nov
-

2008

TRA Lebanon
-

Broadband

26

Outline

3
-

Nov
-

2008

TRA Lebanon

I.
The Telecom Market Today


The Urgent Need for Re
-
from

II.
Lebanon’s Telecom Reform

III.
TRA Vision, Roadmap, and Progress


IV.
Current Broadband Market


V.
Broadband Spectrum Re
-
farming


VI.
Next Steps and the Way Forward

27

Broadband Statistics
-

Middle
-
East

BB penetration in Lebanon is very low


room to expand

Source:
www.internetworldstats.com/middle.htm
, ITU data Sept/2007

Notes: Some figures are probably dated since for example UAE is known to have
reported double the penetration by mid
-
2008


Broadband Penetration
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
Israel
Bahrain
UAE
Qatar
Lebanon
Yemen
Middle-East
Palestine
Kuwait
Jordan
Saudi Arabia
Iran
Oman
Syria
3
-

Nov
-

2008

Re
-
farming for Broadband Lebanon

28


Existing broadband penetration in Lebanon is low by international benchmark











0
5
10
15
20
25
30
35
40
Denmark
Netherlands
Iceland
Norway
Switzerland
Finland
Korea
Sweden
Luxembourg
Canada
United Kingdom
Belgium
France
Germany
United States
Australia
Japan
Austria
New Zealand
Ireland
Spain
Italy
Czech Republic
Portugal
Hungary
Greece
Poland
Slovak Republic
Turkey
Mexico
Lebanon
Source: OECD
Other
Fibre/LAN
Cable
DSL
OECD Broadband subscribers per 100 inhabitants, by technology, December
2007
OECD average
Broadband Statistics


Worldwide

Lebanon is still
4
times lower than the
Average

3
-

Nov
-

2008

Re
-
farming for Broadband Lebanon

29

Current
Internet S
tatus in Lebanon

Internet penetration increased
from
6
% to
25
% (
32
%)

3
-

Nov
-

2008

5.80
%

9.00
%

13.30%

23.90%

0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
2000
2002
2005
2008
Internet Users in Lebanon YEAR
2000


2008

YEAR
Re
-
farming for Broadband Lebanon

30

Broadband Background
-

Lebanon

3
-

Nov
-

2008


For
10
years the MoT partnered with the private sector to provide data connectivity
and internet services


Spectrum was being authorized on an annual basis


no clear licensing policy


Limited ADSL services despite the fast growth with close to
60
K
-
70
K subscribers
served by the incumbent operator/private sector. The incumbent (Ogero) is the only
fixed operator with ~
70
% ADSL market share on the local loop. Unbundling and Bit
-
Stream models provided. Five private DSPs contributing to ~
30
% of market share


Wireless BB is provided by
4
private DSPs with end
-
to
-
end wireless access and
backhauling using microwave


no fiber


Coverage ranging from national in the FWA corporate market to limited urban
coverage for personal broadband internet market with “
3
” players offering
portable nomadic broadband in a multiplayer ISP
-
DSP scenario



17
” ISP’s, “
5
” DSPs, and “
1
” fixed line operator, and “
2
” mobile (GPRS &
limited EDGE) constitute the regulated data & internet market players


Non
-
regulated market players (incl. WISPs) & illegal local cable operators
serving residential users using ISM
2.4
GHz & some licensed spectrum bands


Mobile broadband (
3
G) is not yet available

Re
-
farming for Broadband Lebanon

31

Broadband Wireless Spectrum


Current Status


Spectrum used by DSPs include (
same DSPs have large portions of the spectrum
):


1.9
GHz: TDD UMTS band allocated to provide personal broadband using proprietary
technology (I
-
burst)


2.2
GHz (legacy TDMA PMP systems since
1999
but being migrated since
2003
)


2.5
-

2.69
GHz: IMT Prime spectrum; allocated by MoT for FWA (to evacuate)


3.4
-

3.6
GHz: Prime Spectrum for FWA and BWA including WIMAX


3.6
-

3.7
GHz: Used for some FWA without being authorized


5
GHz used heavily by unlicensed WISP’s and some DSPs


24
-
26
GHz FWA high capacity PMP backhauling


Limited Residential Broadband Wireless coverage in major cities & GBA


Lack of initiatives to ensure rural access to broadband wireless


A number of unlicensed wireless ISPs serving residential & SOHO internet markets


Occasional interference on some bands from cross boarders and operators and unlicensed
WISPs

3
-

Nov
-

2008

Re
-
farming for Broadband Lebanon

32

Outline

3
-

Nov
-

2008

TRA Lebanon

I.
The Telecom Market Today


The Urgent Need for Re
-
from

II.
Lebanon’s Telecom Reform

III.
TRA Vision, Roadmap, and Progress


IV.
Current Broadband Market


V.
Broadband Spectrum Re
-
farming


VI.
Next Steps and the Way Forward

33

BROADBAND

Lebanon has to improve its telecom infrastructure and open it
to competition

Fixed
MoT

Infrastructure:

currently the only provider of national internet
and data transmission, however needs major upgrade of national and
international capacity.

National Broadband Licenses:

Provide a best in class alternative national
networks (core, metropolitan and access), enabling the national transmission
and provision of high speed communication


Broadband Access Licenses:

Unleash competition on the access level and
provide more choices to consumers ( e.g. incumbent data service providers)



The TRA proposed plans to issue licenses (through an international public auction) in order to
establish across Lebanon best in class core, metropolitan and access networks :

1.
Two
new NBLs (+
LibanTelecom
)

2.
Unrestricted number of Broadband Access Licenses (for existing DSP and new
licenses) taking into account limitations in the availability of spectrum resource

Therefore

Competition


3
-

Nov
-

2008

TRA Lebanon
-

Broadband

34

BROADBAND Spectrum

The TRA is paving the way to meet a growing spectrum

demand


Spectrum Planning and Refarming

Planning Objectives


Efficient spectrum distribution
-

Optimize the use of spectrum


Introduce new national and regional operators to the market


Open gates for new technologies and services


Reserve spectrum for future needs taking into consideration technology evolution


Define frequency bands and bandwidth that can be offered for TV distributors


Maintain a smooth migration plan from analog to digital TV transmission


Secure minimum committed spectrum to the existing operators


Spectrum Re
-
farming


Re
-
farming plan for the bands
1.9
,
2.3
,
2.5
,
3.5
,
5
and
26
GHz is studied with primary focus
on the
2.5
GHz band that has been designated as extension band to IMT and on the
3.5
GHz band which may considered in future as an extension to IMT


Auction model for broadband networks is being studied by the TRA in order to realize goals
defined in the liberalization roadmap by introducing new operators (
2
NBLs,
5
-
6
BAL)


Re
-
farming for the
12
GHz and
26
GHz bands will be studied as a solution to the cable TV
distributors

3
-

Nov
-

2008

TRA Lebanon
-

Broadband

35

Questions to Address


Planning

What are the policies?

Re
-
farming for Broadband Lebanon


Policies


Government


Telecommunications


TRA


Broadband, Spectrum Policy, Re
-
farming, Infrastructure
and Rights of Way (RoW)


Broadband Policy and Licenses


Objectives


Fiber vs. Wireless


Mobile vs. Fixed


Types of Licenses


Types of Services


Number of Licenses/Packages (short and long term)


National vs. Regional Licenses/Packages


Obligations Coverage/ Deployment

36

Questions to Address


Planning

How to treat existing operators?


Treatment of existing operators


Basis for decisions (legal, other)


Licenses (type, renewals, and transition)


Bands and spectrum (Smin: number of bands, size, price, issues)


Continuity of services
-

Ensuring continuity of services/minimum interruption


Transition and Migration
-

Schedule, dependencies, consumer services, cost,


Interim period
-

duration per band, per operator, and per service


Pricing (revenue sharing, auction, auction derivatives, AIP, averages,
benchmarking)


Technology neutrality vs. ensuring coexistence conditions


Size of the spectrum per operator (DSPs, NBL, etc.)


Auction(s)
-

sequencing, design, number, timing, dependencies (LT, Mobile, etc.)

Re
-
farming for Broadband Lebanon

3
-

Nov
-

2008

37

Spectrum Milestones

The TRA had to pave the way


A
Spectrum Policy
harmonizing bands & national interest according to best practices/ITU


Spectrum Policy. Guidelines, Handbook


National Frequency Allocation Table (LNFT
-
Final version issued)


Spectrum pricing in the different bands (regulations, auctions, auction
-
related, AIP, ..)


Re
-
farming

for bands of interest ( BWA plan under consultation)


Re
-
farming bands


Assigned/allocated spectrum per package (minimum, maximum, short and long term)


Reserved spectrum per band


Migration plan from Analog to Digital TV broadcasting (consultation soon)


Clearing as much spectrum sub 6GHz to be offered for new services or reserved


Develop and implement
spectrum licensing regulations
-

Universal, Technology, infrastructure,
service, duration, obligation, treatment of licensing requests (new, renewals)


Establish
Enforcement & Inspection Regime
-

regulations, monitoring, inspection, enforcement,
illegal operators & cable providers, etc.


Develop position for Lebanon in
ITU

activities and working parties


Build
capacity
and resources

3
-

Nov
-

2008

Re
-
farming for Broadband Lebanon

38

Spectrum Management Objectives


Enable liberalization of, and
competition

for, telecommunications (including radio
communications) services and equipment


Boost
economic growth
, create employment, promote general welfare


Ensure
transparency

in spectrum award process ensuring best value


Reallocate spectrum to meet new regulations while
minimizing impact
on
services and consumers


Support national
security and defense
needs


Enable the realization of public policy objectives on
enviornmental

safety
(including emergency services), cultural (including broadcasting), social and
economic development


Harmonize

spectrum use with international developments & ITU
-
R


Stimulate technological innovation
and competitiveness

3
-

Nov
-

2008

Re
-
farming for Broadband Lebanon

39

TRA Spectrum Approach to Broadband
Lebanon


Issue new licenses for long periods and reserve spectrum for
future use


Establish a Re
-
Farming Plan for important bands like
2.5
GHz and
3.5
GHz
in order to be auctioned for new technologies and services


Technology neutrality principle where possible while ensuring:


Interference management and compliance to technical conditions is met (challenge )


Equivalent services can be delivered using different technologies. Let the market decide
which services to deliver to consumers


Use spectrum ceilings to ensure a minimum of
3
players in the market


Make a distinction in a short term cap (auction period) and long term cap (after M&A)


Give operators sufficient time for transition into the new situation


Reserve sufficient spectrum for future use (LTE)


Keep the auction design and the auction process as simple as possible


Minimize the complexity of the assignment process as much as possible.

3
-

Nov
-

2008

Re
-
farming for Broadband Lebanon

40

Proposed Broadband Licensing Framework

Accelerating Broadband Lebanon


Substantial investments in broadband access and fiber optic backbones are required to
accelerate broadband deployment


The

Liberalization

Roadmap

outlines

issuing

licenses

in

2009

with

a

view

to

establishing

across

Lebanon



in

the

cities/rural

areas



access

to

high

speed

core,

metropolitan

&

access

networks


National

Broadband

Licenses

-

services

barring

Liban

Telecom

exclusivity


Up

to

2

licenses

to

be

issued

with

fixed

(
fiber
)

and

wireless

access

capabilities


Build

own

infrastructure

to

offer

BB

services

using

any

technology

for

a

core

network

(linking

nodes

in

the

main

cities),

metropolitan

networks

(covering

towns

and

cities),

and

access

networks

(i
.
e
.
,

connecting

metro

and

core

networks

to

points

of

presence

(POPs)


Include

sufficient

amount

of

‘access’

spectrum,

and

int’l

gateway

rights


Roll
-
out

coverage

obligations

to

provide

national

coverage

over

most

of

the

territories


Universal

Service

Obligation!!


Access

obligation

is

modest

due

to

competition/BALs

but

core

obligation

is

more

stringent



Broadband

Access

Licenses

(National

and

Regional)


Build

access

infrastructure


Offer customers the same telecommunications services as the NBLs


Some would be with radio spectrum bands to deploy wireless access technology


This can trigger investments in infrastructure and actual deployment


Competition will help speed up deployment, improve service and reduce prices


3
-

Nov
-

2008

Re
-
farming for Broadband Lebanon

41

Outline of broadband spectrum packaging


Maximum spectrum (Smax)


Short Term: 30 MHz on 2.5 GHz and 35 MHz on 3.5 GHz


Long Term:, when we expect that the reserved spectrum will be made available, to 60
MHz on 2.5 GHz and 56 MHz on 3.5 GHz, with effect not before 2 years following the
NBL and BAL auctions

3
-

Nov
-

2008

Re
-
farming for Broadband Lebanon



2
.
5

GHz

3
.
5

GHz

Spectrum

available

in

principle

190

MHz

196

MHz

Spectrum

for

NBL

each

20

MHz

21

MHz

Total

spectrum

for

2

NBL

40

MHz

42

MHz

Spectrum

for

Smin

-


84

MHz

Mobile

operators

(each

10

MHz)

10

MHz

Total

spectrum

for

mobile

operators

30

MHz

Reserve

28

MHz

Guard

Bands

10
-
15

MHz

7

MHz

Reserved

for

future

use

50

MHz

Available

for

BAL

auction

55
-
60
MHz

35
MHz

(National

+

Regional)

42

Outline of broadband spectrum packaging
(cont’d)


The total spectrum for each of the
2
NBL licences is:


20
MHz of
2.5
GHz



and


21
MHz of
3.5
GHZ


The spectrum for the mobile operators (optional choice of
1
x
10
MHz TDD each for the
2
Mobile operators and Liban Telecom) and the reserved spectrum for future use (
50
MHz) are
combined into one reserve area of
2
x
40
MHz blocks


Remaining spectrum for the BAL auction(s) after accounting for reserve spectrum, the
minimum spectrum that is expected to be allocated to
4
existing DSPs (denoted by Smin,
four times
21
MHz in the
3.5
GHz band), and guard
-
bands, is expected to be
55
MHz in the
2.5
GHz, and
35
MHz in the
3.5
GHz band. It is proposed that:


The
2.5
GHz band will be packaged into national packages (National Broadband Access
Licence(s) (NBALs)).


The remaining
3.5
GHz spectrum be arranged as
3
blocks of
7
MHz,
sold as a single
NBAL
, and
1
block of
14
MHz


The
1
block of
14
MHz in the
3.5
GHz band will be auctioned in the form of regional
blocks (Regional Broadband Access Licence(s) (RBALs))


In Greater Beirut, the
14
MHz package in the
3.5
GHz band will be available as
2
blocks
of
7
MHz to all bidders

42

3
-

Nov
-

2008

Re
-
farming for Broadband Lebanon

43

Auction Overview (in progress)


Several alternatives have been considered in terms of:


the number of licences; and


the amount of spectrum each licence contains


The preferred option has been identified


currently working on


Sequencing of auctions


Auction formats (sealed
-
bid vs. ascending) and their properties


There are two main auction formats that are typically used for allocating spectrum:


Single
-
round Sealed Bid (SSB)


Multi
-
round Ascending Auction (MAA)


Criteria for choosing between the two auction formats


Revenue maximization, uncertainty about spectrum value (asymmetries of
information)


Strength of competition for licences (i.e. expected # of bidders vs. #of licences)


Scope for collusion


New entry


Simplicity (for the auctioneer and the bidders)


3
-

Nov
-

2008

Re
-
farming for Broadband Lebanon

44

Proposed Migration Plan for 2.50
-
2.69GHz
Band

3
-

Nov
-

2008

TRA


Confidential

TRA Strategy

CE
0505
Chanel plan

14 x 5 MHz paired channels 100Mhz spacing,

(Subscriber to base station transmission, Uplink)





















14 x 5 MHz paired channels 100Mhz spacing,

(Base station to Subscriber transmission, Downlink)

10 x 5MHz (50Mhz) initial TDD Spectrum 2 x 5 MHz Guard bands between TDD an FDD blocks.

Long Term
-

Scenario

A

B

C

D

E

F

G

H

I

J

K

L

M

N

TDD/ FDD

Guard
band

NBL 1 4x5MHz block

NBL 2 4x5MHz block

TDD/ FDD

Guard
band

A'

B'

C'

D

E

F

G

H

I

J

K

L

M

N





















































Reserved TDD block

Mobile 3 Optional block

10 x 5MHz (50Mhz) initial TDD Spectrum 2 x 5 MHz Guard bands between TDD an FDD blocks.





















































Mobile 2 optional Block

Mobile 1 optional Block

Initially planned as 70 x 2 FDD with TRA considering 45x 2 reserved

BEM, Synchronization between TDD operators

Interim Transitional Period

GDS Block
of 15MHz

Free

Cable One Block 1 20MHz legacy
FWA

Cable One Block 2

20MHz BWA

TDD/FD
D
GB

NBL 1 4x5MHz block

NBL 2 4x5MHz block

NA
/

GB

Assigned to Cedarcom
15MHz

PESCO Assigned 25MHz

Free

out
of
ba
nd

End of Band

Current Occupation

*

Free

*

Free

*

36MHz

30MHz+

12 MHz

18MHz

24MHz

'2500

2503

2504

2505

2506

2507

2508

2509

2510

2511

2512

2513

2514

2515

2518

2519

2520

2521

2522

2523

2524

2525

2526

2527

2528

2529

2530

2533

2534

2535

2536

2539

2540

2541

2542

2543

2544

2545

2546

2547

2548

2549

2550

2552

2553

2554

2555

2556

2557

2558

2559

2560

2563

2564

2565

2566

2569

2570

2571

2572

2573

2574

2575

2576

2577

2578

2579

2580

2581

2582

2583

2584

2585

2586

2587

2588

2589

2590

2591

2592

2595

2596

2597

2598

2599

2600

2601

2602

2603

2604

2605

2606

2607

2608

2609

2610

2611

2612

2613

2614

2615

2616

2617

2618

2619

2620

2621

2622

2623

2624

26'25

26'26

2627

2628

2629

2630

2631

2632

2633

2634

2635

2636

2637

2638

2641

2642

2643

2644

2645

2646

2647

2648

2649

2650

2653

2654

2655

2656

2657

2658

2659

2660

2661

2662

2663

2664

2665

2666

2667

2668

2671

2672

2673

2674

2675

2676

2677

2678

2679

2680

2681

2682

2683

2684

2685

2686

2687

2688

2689

2690

2691

2692

End of Band





GDS





Cedarcom





Cable One





reserved





Pesco



NBL1



NBL2



Blocks for BAL Auction



Blocks reserved

*

Refers to spectrum used but not authorized in Interim license

Transition Stage

Long Term licensing

Current Occupancy

NBL TDD Spectrum

NBL TDD Spectrum

45

Outline

3
-

Nov
-

2008

TRA Lebanon

I.
The Telecom Market Today


The Urgent Need for Re
-
from

II.
Lebanon’s Telecom Reform

III.
TRA Vision, Roadmap, and Progress


IV.
Current Broadband Market


V.
Broadband Spectrum Re
-
farming


VI.
Next Steps and the Way Forward

46

Next Steps


Finalize

Consultation


Issue

Final

Re
-
farming

policy


Issue

BB

Policy


Issue

RFA


Run

Auctions



TRA

Commitments


The

TRA

is

committed

to

taking

the

country

back

to

the

international

telecommunications

scene

through

a

successful

market

liberalization



The

TRA

is

committed

to

building

a

thriving,

innovative,

and

competitive

telecommunications

market

which

includes

the

most

technologically
-
advanced

networks

and

provides

services

at

internationally

competitive

prices

and

quality



The

TRA

is

committed

to

promoting

the

interests

of

Lebanese

consumers

in

the

market

to

make

sure

they

are

getting

good

quality

of

service

at

affordable

and

competitive

prices

and

that

their

right

to

safe,

secure

and

confidential

access

to

telecommunications

is

safeguarded

3
-

Nov
-

2008

TRA Lebanon


TRA Commitments

47

Auction

Consultation

Announce
Time Frame

Run Auction

Migration to
interim frequency
plan and reduce
spectrum usage

Requirement on
current DSP’s to
clear spectrum
used in Reserved
Band

6 months from
announcement
date

End of Interim
Period

NBL

Auction

Oct
-
08

Nov
-
08

Feb
-
09

May
-
09

31
-
Oct
-
2009

2.5 GHz
Spectrum
Auction

Oct
-
08

Nov
-
08

May
-
09

Jul
-
09

31
-
Oct
-
2009

3.5 GHz
Spectrum
Auction

Oct
-
08

Nov
-
08

May
-
09

May
-
09

31
-
Oct
-
2009

Timeline