Lebanese Internet: Rotting on the Vine

Ogero’s Director-General Abdel-Moneim Youssef is at it again, doing all that he can to undermine the current government – this time, by withholding bandwidth capacity from Lebanon’s two mobile phone companies.

Is it a political decision? A pattern of behavior? Or simply a form of bullying?

Perhaps it’s all three. For at the management of Ogero – the main operational arm of the ministry of telecommunications – every imaginable form of obstruction of public services in this sector is being practiced.

Now, the latest exploits of Ogero’s management involve withholding international bandwidth capacities required for Internet access from the two mobile phone service providers in order to force them into purchasing additional bandwidth from the market, resulting in lost revenues for the public treasury.

This behavior is nothing new, albeit it has managed to further increase pressure on Mic1 and Mic2 – the two state-owned companies operating under the brand names Alfa and MTC Touch – which have recently upgraded to third-generation technology (3G) and are offering 3G data plans. Previously, data plans were being offered over GPRS technology, which required less bandwidth.

“Now, the two mobile phone service providers have to purchase 95% of the international bandwidth capacities they require from the market, i.e. from the private sector, because these capacities are being withheld by Ogero,” a source familiar with how things work in this sector said.

Technically speaking, Internet bandwidth capacities are needed just like fuel is needed to run a car, and are sold in the form of lines called E1, purchased on a monthly basis, with each line providing 2 Mb/s.

Each mobile phone company needs 100 lines a month to operate its services, which means that the mobile phone sector’s Internet service requires 200 E1 lines each month.

But with these capacities being officially withheld, two problems emerge, namely the fact that the two companies face higher costs as market prices are higher than the official price, as well as the fact that, as a result of the above, the treasury loses potential revenues.

According to experts, the official price for an E1 line at present is $420, while the market price offered by the private sector ranges between $800–1000. Private companies have access to international bandwidth lines and do not have to resort to purchasing lines from the cables that otherwise supply Lebanon with its international bandwidth capacities.

Furthermore, before the new decree that reduced prices came into effect, a line’s official price was $2,200. At the time, the private sector was selling it at $1,800.

According to one owner of a private Internet service provider (ISP), “When the tariff was still high, the private sector was competing with the government. But now that tariffs have been reduced, the private sector has come to dominate the market because of Abdel-Moneim Youssef’s refusal to release available bandwidths”.

With the lines being withheld from ISPs, the treasury is unnecessarily losing $84,000 each month, or over one million dollars a year.

But how does Abdel-Moneim Youssef manage to pull this off, and get away with it, legally speaking?

According to some pundits, Ogero’s director-general pursues airtight strategies to withhold these services, each time giving an absurd justification. For example, in the case of the two mobile phone companies, Youssef is refusing to grant them the bandwidth capacities on the grounds that they have failed to provide clearance certificates for financial liabilities in relation to the public sector.

“However, the [mobile phone] sector is owned by the state, and the two operators regularly transfer funds to the Ministry of Telecommunications under clear annual contracts. So how can the state ever establish that its liabilities with relation to itself have been cleared?” an informed source asks.

The former minister of telecommunications Charbel Nahas became aware of this quagmire, and as a result, he issued a clear memorandum stating that certificates of clearance from Mic1 and Mic2 are no longer required to carry out work orders. However, his directive was ignored.

The fact of the matter is that Internet bandwidth capacities are not being withheld only from the two mobile phone companies. Rather, ISPs have all been suffering for a long time from the policies of Abdel-Moneim Youssef.

A while ago, ISPs in Lebanon sent a delegation to Prime Minister Najib Mikati to request a solution to this bizarre situation, and the delegation came out with a pledge by the latter to resolve the matter soon; but nothing happened.

Reportedly, the situation improved somewhat following this visit – “perhaps because the director felt the heat,” according to the ISP owner. However, things soon went back to the way they were, possibly even worse.

“Two weeks ago, we started seeing a more aggressive behavior on the part of Abdel-Moneim Youssef and further obstruction of business in the sector,” sources in the ministry of telecommunications report
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One of the odd ways in which Ogero’s Director General has been dealing with the ISPs, with a view to hinder their operations according to sources, involves billing procedures. Typically, the items in the relevant decree that determine Internet tariffs include the cost of using virtual networks (VLANs), which is then discounted by default, given the fact that it is included in the prices of E1 lines.

However, the ISPs are required to pay for the VLANs by virtue of the clearances for financial liabilities that the director requests from them. But since he is well aware that the ISPs would renegotiate and drag their feet to avoid paying illogical fees, Abdel-Moneim Youssef is in fact ensuring that they will fail to clear their liabilities, and subsequently, fail to acquire bandwidth capacities.

To respond to this situation, the ministry recently issued a new decree that removed all mention of the items on VLANs. So what happened next? Ogero’s management continued to insist that ISPs pay this fee, citing the fact that some companies had already paid it – so how can other ISPs be exempted from it?

Yet even when some ISPs have finally agreed to pay this fee, Ogero’s management would come back to them expressing its surprise, and ask them why they have decided to pay the fees when the ministry had removed the relevant item from the decree.

This is how this management, led by Abdel-Moneim Youssef, plays a game of cat and mouse, sometimes with the ministry of telecommunications, and at other times, with various companies – from the mobile phone sector all the way to the Internet sector.

This article is an edited translation from the Arabic Edition.