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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 Katherine Azmeh
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.