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Ban Skype, discourage business

Ban Skype, discourage business

With the region’s least competitive mobile market and some of the slowest internet in the world, Lebanon’s move to ban VoIP communications is wildly unpopular.

June 18, 2010 8:33 by

Technically, Skype is already illegal in Lebanon. So is Vonage, Google Talk, iChat, and other voice over internet applications (VoIP) that allow users to speak phone-to-phone via the Internet. Like so many governments in the region – including the UAE, Syria, and Qatar – Lebanon banned internet telephony in a 2002 law that effectively ensured a monopoly for the country’s only fixed line operator, Ogero. Eight years later, the Lebanese parliament is looking to enforce the illegality of software that competes with Ogero. All this just ahead of the arrival of new fiber optic upgrades that will reportedly increase internet speeds by as much as 20 percent.

A competitive edge for business, VoIP is a thorn in the side of big telecom revenues. “It greatly reduces revenues to the (monopolistic) landline network and, in some cases, wireless telephone companies – read Ogero, MTC, Alfa, and the Finance Ministry as the direct beneficiaries of long-distance communication revenues,” according to the Daily Star.
VoIP calls take a big bite out of Ogero’s profits, and last week, the telecoms ministry began enforcing the ban on VoIP communications. Their new equipment will effectively block internet telephony, and help the Lebanese government in “writing yet another chapter in the endless mockery of our rights as private citizens and social entrepreneurial agents of progress and change,” said Imad Atalla, a Daily Star journalist.

Profits from telecom in Lebanon are no trifling matter in a country where a local cell phone call can run $0.44 a minute, and profits from telecoms remain a vital income source for the national budget. Revenues from telecommunications were estimated at $1.6 billion at the close of last year. “If I’m not wrong, telecommunications alone provides the single largest revenue stream for the government. Is it any wonder, therefore, that efforts are now being made to curtail the inroads of VoIP alternatives to exorbitant calling rates?” wrote one Lebanese blogger.

There’s a fair share of pretty predictable politics to go with it, as well. Take for example the fact that Ogero is the government-owned fixed line operator in Lebanon, managed by a director general of the country’s telecom ministry. The ministry is also responsible for oversight and contract issuance to Ogero, “a setup in gross violation of corporate governance principles,” according to Lebanon’s Executive, a business monthly.

But corporate transparency aside, the move has incensed the business community in a country where telecom services are among the most expensive in the world and internet, the slowest. The Arab Advisors group this year ranked Lebanon’s cellular market the least competitive in the Middle East, based on the fact that the government owns the two mobile operators and retains full control over the sector. Only Lebanon and Libya still have a government owned duopoly, according to the report.

“It’s a shortsighted attempt by the government to line their pockets,” said Sasseen Kawzally, a Lebanese journalist. “They’re banning a critical tool of business communication and harming the economy. Small and middle-sized businesses will lose their ability to compete.”

Critics warn of an avalanche of ill effects, including declines in remittances into Lebanon, a chilling effect on business, and a threat to civil liberties and freedom of expression. It will be interesting to see how the government tries to repackage this one.

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  1. Dany Zeitouny on June 18, 2010 12:17 pm

    lebanon is a joke concernings telecom and internet… many other countries i know have an exellent internet connections and a very cheap and affective communication lines, and the worst part is that lebanon is much better then theese countries in economics and others.. yet they are more organized.. So mabe we should call our ministers of communication and ogero and request better services !!

  2. Sharbeen on June 18, 2010 4:16 pm

    Saudi Arabia never banned VoIP. And will never ban it. Been using it for years.

  3. Abdallah on June 18, 2010 6:03 pm

    The “zo3amas” heads should be hanged in downtown Beirut if they ban skype

  4. suha on June 19, 2010 7:39 am

    In my opinion, Lebanon is a great country with very smart people who have lots of unused potentials.
    I am sure that officials can always find a way to ease the expensive life pressure on their fellow Lebanese without harming the government income… More service will hinder more job opportunities and more income for the country…Good luck Lebanon..

  5. Basel A-Shaban on June 19, 2010 8:22 am

    What better way to keep service providers of cell communication innovative and honest than to keep the cell market open for free competition. The customers will always be the winners enjoying better service and more affordable prices.

    Governments should understand that they need to serve the interest of all their people, and not those who grease pockets for legislations that will serve their interest. Fight and stop government corrupt practices that leads to a reverse trends in advancing societies.

  6. Andrew on June 19, 2010 1:48 pm

    Middle Eastern government ministers and bureaucrats, whether elected or not, are by and large the nation’s captains of industry.

    Is it any surprise they spend their time protecting their vested interests?

  7. Miss Anne Thropic on June 20, 2010 8:15 am

    I just find it amusing that despite the UAE Skype ban, I was able to buy a laptop from Carrefour with Skype already on it! All those free calls back home and nothing Etisalat can do about it.

  8. Ronald on July 21, 2010 10:53 am

    the solution to this is being creative.

    i understand why the lebanese telecom industry (if you can call it that) has to go to such lengths, but the truth remains that the damage is being done mostly by governmental ownership.

    the rest of the damage is done by the people. they accept what is thrust upon them, when the gsm sector in lebanon was private in the hands of Libancell and cellis, prices were the same on both companies, dictated by the MOT, and competition was very limited, and worse, people were gladly paying the premiums…and never did anything tangible to drop the fees. god forbid they would die if they switched off their phones.

    prices were dropped last year, but that is not enough… much more should be done, and privatization is not the only answer.

    what help would it be if private corps rule the two networks, and the work together to keep their profits high? customer pressure…

  9. Notax on July 25, 2010 9:24 am

    The good news is that there is always a way around.


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