Lebanon Telecom, Alfa Mobile, Chairman and CEO, Marwan Hayek
There’s always room in the Lebanon mobile market to have another mobile operator in Lebanon. However, when the in the three mobile operators in Lebanon belong to the same owner it defeats the purpose. The purpose of launching a new mobile operator in Lebanon is to put pressure on the current mobile operators, from a competitive point of view: in order to drop prices, improve services. Launching a new mobile operator in Lebanon would not add any value to the current setup in Lebanon.
Interview with Marwan Hayek, Chairman and CEO of Alfa Mobile Lebanon
The mobile penetration rate in Lebanon currently stands as 28% ranking far behind other countries in the region, with Jordan for example having a penetration rate of 74% and Saudi Arabia a rate of 78%. What is your assessment of Lebanon’s telecom sector and what are the key opportunities and challenges ?
First of all, I think the penetration rate stands much higher than 28%. Today we are at 55%. This sector represents a lot of potential growth opportunities for potential investors. The sector is highly regulated, it’s kind of a state-owned monopoly even though we have two operators in the country, but they are both owned indirectly and managed from a policy perspective by the government. This is limiting the competition between the two mobile players, leaving the sector without a lot of innovation on the services side.The consumer appetite and the budget is there; however we as operators have to be ready to offer the services the consumer is waiting for.
What is your perception of the regulatory environment in Lebanon ?
Frankly speaking we cannot really talk about regulatory environment in Lebanon because it is still a newly born entity. The TRA in Lebanon did not reach a level where it can play its own defined role as per the telecom law. Unfortunately we’re lacking a strong regulatory environment that can have the power to regulate the sector. Today it is still a state-owned sector.
When do you think privatization will take place ? If it takes place is ORASCOM going to beat Alfa ?
The government has announced recently that there will be no privatization in 2010 . However there are a lot of discussions taking place today on what way to take for the future of the sector. Various options are being considered, starting with a public- private partnership model whereby the public and the private will join hands in rebuilding the sector and investing in it. Another model is full privatization , and selling the assets to new investors. A third model is to continue with what we’re doing today, which is outsourcing the operations to telecom companies that have certain expertise in this field. It is unclear what the final scenario will be after 2010. As for ORASCOM : yes, ORASCOM is very keen on entering the Lebanese market as an investor. That is why we are here and supporting the government, ready to bring any experience we can from other markets.
MTC Touch remains the largest mobile operator with a subscriber base of 1.168 million compared to your subscriber base of one million and ninety thousand. How do you tackle competition from them?
In the last one year, we managed to grow the subscriber base by almost doubling it. We managed to revamp the entire infrastructure be it on the networks side or the IT side. There was a massive modernization that took place last year to swap all the old systems we had and replace them with newer technologies which gave us a certain edge or advantage from a technological point of view. What is still missing is innovation; new services that we need to offer to be competitive enough and appealing to various segments of the customer base especially the youth segment which offers a lot of potential in this country
How much differentiation can be offered on the market?
Not much; however, there’s still room for innovation. There are a few initiatives that we have in the pipeline, especially for 2010. We are interested in introducing some services like the Ring Back Tone service to the market, which is very appealing to the youth segment. Services like e-payment and mobile advertising are under discussion with the ministry. Hopefully, this will reposition Alfa as the main, if not the only GSM operator in Lebanon.
How much help do you receive from the government and the public sector?
Anything related to investment or capital is the government. There is total support given from the government to the operator. Being a part of ORASCOM – which is a regional telecom player – we get a lot of support and synergy on various aspects, starting from the purchasing power the group has which helps in reducing our costs to both Alfa and the ministry. Because we operate in other countries, we can tap into this source of expertise for an operation like Alfa here in Lebanon.
How do you assess Alfa’s performance, and what are the key challenges you are facing during this time?
Alfa’s performance during the first year of operation was impressive. We managed to double our base in less than one year. However, there are still a lot of things to do especially on the innovation and services side. Going forward, we have an ambitious plan. Hopefully we will be able to recover the leadership position in the local market.
Can you tell us about Alfa’s constant interest in corporate social responsibility?
This is a subject that is very dear to our hearts. We have many ongoing initiatives, mainly addressing the organizations we have in the country that deal with children, such as mentally handicapped children, deaf and mute children, and other various children’s associations. Another area that we have recently started associating with is women’s rights, whereby we have a plan that is being put in place today to boost this cause and develop it in the country.
What are the prospects of having a third mobile operator on the market?
There’s always room in the market to have another mobile operator.
“However, when the three operators belong to the same owner it defeats the purpose.”
The purpose of launching a new operator is to put pressure on the operators, from a competitive point of view: in order to drop prices, improve services.
“Launching a new operator would not add any value to the current setup in Lebanon.”
You have been appointed Alfa’s owner and CEO starting March 11, 2010. What is your vision for Alfa?
It is to really put my expertise at the service of the sector in Lebanon and to try to reposition the telecom sector in Lebanon as a main regional hub. We want to regain our market leadership position. We want to offer to our employees a better environment that will help them to produce better, and be more efficient at what they do. I hope to help Alfa play an active role in the development of the country.