So DSL packages are beefed up eight-fold and prices reduced. Is it a case of mission accomplished? What’s next?
What Telecom Minister Nicolas Sehnaoui achieved on Tuesday (August 23) is memorable and we thank him!
Lebanon needed this release of “broadband” DSL packages. Gone are the pathetic 128, 256 and 512 ones. We now welcome 1, 2, 4 and 6-8 Mbps packages with more Gbytes and lower prices!
Is this enough? Where does Lebanon go from here?
When Cedarcom CEO Imad Tarabay wrote the first article shocking the local industry on March 9, 2011, Lebanon ranked 186th. Based on Net Index, the average download speed in Lebanon today is 530 Kbps. This ranks Lebanon 170th.
Where does the increase in DSL packages put Lebanon now?
Considering the average new DSL packages most consumers can afford, we project that:
Based on the above, the average connection speed would become 2.7 Mbps — roughly five times the current connection speeds. And Lebanon moves up to 107th position worldwide, right after Zimbabwe and Laos.
So is this enough? Do we lack initiative, investments, intelligence, or willingness to rank among the top 10 fastest countries like Lithuania (31 Mbps), South Korea (30 Mbps), Sweden (23.9 Mbps), Romania (23.8 Mbps), the Netherlands (23.7 Mbps), Latvia (23.7 Mbps), Switzerland (20.4 Mbps), Bulgaria (19.4 Mbps), Andorra (19 Mbps), or Singapore (18.5 Mbps)?
Can Lebanon reach an average connection speed of 20 Mbps or more?
Yes! We proudly say that we can. How?
The first requisite of any Internet connection is the international feed. Even at $420, the E1 (2 Mbps) line remains exorbitant.
Internet prices in Lebanon are decreed by the Council of Ministers. International practice, however, is to let supply and demand determine the price of E1. In Europe, for example, it doesn’t cost more than 3 Euros/month.
According to Telecom Ministry sources, the cost price to the ministry does not exceed $30/month. So either price the E1 at $30 or break up the monopoly and allow serious investments in alternative cables by private operators. Price fluctuation would then be determined by the old, yet valid, “supply and demand” practice.
If prices dropped further, DSL connection speeds could be beefed up to 20 Mbps like in Europe or South Korea where the 100 Mbps home connection costs $30.5/month (See Executive Insight).
Secondly, there needs to be incentives to invest in new networks, technologies and services. In the current circumstances and heavy unfair competition between state-owned and private data operators and Internet providers, inequality in taxation, etc. (see our post “Fair competition key to Internet success”) the private sector is not willing or financially incapable of making large investments in advanced networks, infrastructure, and services.
What do investors need? If we examine any of the top 10 fastest countries, operators there have 20- to 25-year licenses and regulators have enforced fair competition in these markets.
It is in the hands of the telecom minister to further reduce international bandwidth prices or open up the competition on international fiber-optic lines.
It is in the hands of the telecom minister to enforce fair competition among all operators. This can be implemented at a day’s notice.
It is further in the hands of the telecom minister to grant long term licenses to current operators and then open up the market to new entrants.
Former Telecom Minister Gebran Bassil drew the roadmap for Lebanon to become an information-based society. We constantly hear Minister Sehnaoui declaring the importance of the private sector in the telecom industry. It is now in the hands of Minister Sehnaoui to make it happen.
In less than a year, Lebanon can be among the top 10 fastest Internet countries in the world.