Assistance to the Establishment of the Telecommunications Regulatory Authority in Lebanon SCR-E/111668/D/SV/LB

Eurostrategies

The Telecommunications Regulatory Authority (TRA)www.tra.gov.lb

G Alan HornePresentation at Termium

22nd Sept 2004

EurostrategiesThird Floor, Ministry of Telecommunications

Riad El-Solh Street, Beirut, Lebanon

Fixed line: +961 (0) 1 981 490

Lebanon Mobile: +961 3088660

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Introduction

• Objective over the next 30 minutes to present:– Mission of TRA– Legal basis– Powers– Budget & Funding– Organisation– TRA Strategy– Establishment of Regulations– Sector Development– Conclusions

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TRA Mission

To regulate the telecommunications sector so as to achieve a competitive environment delivering a wide range of high quality

services at competitive prices, in order to assist in the overall development of the Lebanese economy for the benefit of

businesses as well as all the citizens of Lebanon.

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Legal Basis

• Telecommunications Law - 2002– Creation of Telecommunications regulatory Authority (TRA);– Corportatisation - Creation of Liban Telecom;– Privatisation;– Restructuring Ministry of Telecommunications to focus on: Policy, International

Relations and TRA supervision;

• Enabling Decrees– Administrative Decree and financial Regulation of the TRA (Art 4);– Appointing the TRA Board (Art 6.1, Art 7, Art 8);– Remuneration of Board Members (Art 9);

• The Authority shall not be subject to rules governing public institutions but shall be subject to post Audit by Public Audit Court;

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TRA Powers

• The Law gives TRA power to manage all aspects related to:– Promotion of competition and stop anti competitive actions;– Licensing, Spectrum, Numbering, Interconnection;– Technical standards;– Tariffs;– Enforcement and imposition of penalties;– Mediation and arbitration;– Supporting educational and health institutions and facilitate the

physically disadvantaged through telecommunications– Draft Decrees to detail specific areas of regulation:……

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Tel

ecom

s Se

ctor

Tel

ecom

Decrees

TRA Strategy, Policies, Procedures

Guidelines & Decisions Licences

Inte

rcon

nect

ion

Lic

ensi

ng

Cer

tific

atio

n

Spec

trum

Num

beri

ng

Primary Legislation

TR

A st

ruct

ure

Lic

ense

s (A

rt. 1

9)

Lib

an T

elec

om

Acts of Parliament

Dat

a Pr

otec

tion

MIC

1

MIC

2

Cla

ss

Publ

ic B

udge

t (A

rt.1

1.2.

2)

TR

A

?

GoL Policy Documents

E

Com

mer

ce

Com

petit

ion

Secondary Legislation

Policies

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Budget & Funding (Art 11 & 12)

• Financial independence – own fund;

• Independent audit - Post Audit by Public Audit Court;

• Publish financial statement;

• Sources of fund…

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Sources of fund

AdminLicence

feesMinistry

offinance

TRACentral Bank

ofLebanon

RadioSpectrum

Administrationfees

RadioSpectrumLicence

Fees (usage)

Art. 17

$x

Art. 17

< 10% of $x

Art. 11-funding 1(a)

Art. 11-funding 1(b)

Art. 11 funding 2)

Full TRA budget for 2 years

TRA Surplus

Funds from competitive bidding process and usage

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TRA Organisation

Chairman

Legal Affairs & Licensing

Telecommunications Technology

Information & Consumer Affairs

Marketing & Competition

TRA Board

Manager Legal Dept.

Manager Licensing

Dept.

Manager Spectrum

Dept.

Mangr Policy/US

Dept.

Mangr Market

Anal Dept.

Mangr Tariffs Dept.

Manager Consumer Protection

Dept.

Manager Public

Relations Dept.

Manager Standards/QoS Dept.

Manager Technical

Dept.

Head

Financial.

Head

Admin

Head

Int. Audit

Lawyers, licensing officers

Interconnection, numbering, type

approval spectrum

Public relations, dispute

resolution, contract

managers

Wholesale and retail tariffs,

market analysis, universal service

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The Board

• Appointed and terminated by Decree (Art 6)– Chairman and four members for non-renewable or non-extendable

period of five years – proposed by the Minister and adopted by the Council of Ministers;

– No direct or indirect interest with any person that provides telecommunications services and equipment;

– University degree and experience related to position being taken;(telecommunications, economics, business administration, law, finance, engineering, computer science)

• Remuneration set by Decree;

• Meetings majority votes on all legal matters;

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TRA Operational Objectives

• Make the right decisions through consultations and must:– Be accessible to all via telephone, internet and when appropriate face to

face meetings– Communicate objectives, policy, decisions via web site, media

relations, conferences and workshops• Must

– be efficient in its operations– create an efficient competitive environment;– be responsive to the consumer;– be responsive to the Licensees;

• Efficiency depends upon:– Well educated and well trained staff;– Effective systems (Use of CRM and IMS);– A core set of clear policies, guidelines and procedures;

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TRA Strategic Plan

• Goals for the TRA will be set to achieve the Authority’s Mission and must be defined in line with the needs of the Lebanese telecommunications sector;

• A Draft TRA five year Strategic Plan has been prepared for consideration by the Board when formed;

• The priorities were arrived at after informal interviews with key stakeholders, including users, operators, politicians, the Ministry of Telecommunications (MOT) and investors

• Three Key Goals are proposed dealing with:– Competition– Regulation– Broadband

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Competition

• Support the economy of Lebanon by ensuring that there is a comprehensive and sound competitive framework for communications services matching international best practices;

• Foster innovation and offer consumers real choice ensuring that the widest number of customers obtain the widest range of high quality services, meeting users’ needs at affordable prices;

• The pro-competitive framework should be promoted domestically and overseas.

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Regulation

• Establish an effective and independently regulated environment.

• Emphasise performance and results through excellent management.

• Develop and retain independent mission-critical expertise and align the TRA with the dynamic communications markets so as to achieve a liberalised and competitive regime in telecommunications.

• Promote an environment which will encourage investment in the telecommunications sector as the basis for the attraction and development of the information economy.

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Broadband

• Establish regulatory policies that promote competition, innovation, and investment in broadband services and facilities;

• Monitor progress toward the deployment of broadband services in the Lebanon;

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To implement the Strategy

• To implement the Strategic Plan we need to create:– Policies– Decrees– Guidelines– Procedures

• All will be developed using the Consultation Process;• Policies, Guidelines and Procedures are being prepared

covering such areas as:– Licensing– Numbering– Spectrum– Certification– Tariffs

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Telecommunications Industry

MoTGSMOwnership

Fixedoperations

Policy

OGERO

Mobile 1

Mobile 2

Regulation

Radio spectrum

Int.Relations

ISPs

TV distmmds/cable

TV Regulation

Data n/wprovidersPrivate n/w

Admin

Sector Development - today

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TelecommunicationsIndustry

MoT

Ministry/Governmental

organisation

Int.Relations

SectorPolicy

100%Ownership Mobile 1

Mobile 2

ISPsLiban Telecom

TRA

TV distmmds/cable

LALUTTU ICAU

MCU

Mobile 3 ?

Data n/wproviders

TRAsupervision

Admin

Admin

By the end of 2005

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NeCoNewCo

Operator nVoice, Data

Fixed & Mobile

GoL

EquipSuppliers

Operator 1Voice, Data

Fixed & Mobile

Operator 2Voice, Data

Fixed & Mobile

IndividualServicesLicence

ISPsISPs

ISPsISPs

customers

ClassLicences

InterconnectionRegulation

Competition Regulations

Retail tariff Regulations FrequencyManagement

NumberManagement

Number Portability Clearing House

Interconnection Clearing House

TVRadio

Mobile, fixed wire, fixed wireless, WiFi, cable, broadcast

Regulator

PolicyMaker

< 50%Ownership

LawPolicy Decrees

ISPsISPs

ISPsISPs

ISPsISPs

ISPsHosts

By the end of 2010

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By the end of 2010

• Class Licences for most types of operations which do not need to be applied for;

• Particular licences only for infrastructure development;• Three national infrastructure providers, each competing on equal

terms and with a significant non government share holding?;• Operators able to sell any type of service and use any type of

technology;• Other service providers offering indirect access;• Customer able to change service provider and keeping number;• Voice and data services and prices matching international best

practice and cost orientated• Universal service fund set up to support service provision to

uneconomic areas;

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Licensed Operator

Operator Structure

Carrier ServicesDepartment

Operating Network

Retail ServicesFixed Line

ServicesMobile

ServicesISP

ServicesLeasedServices

MobileOperator

Fixed LineOperator

ISP

Account Separation

Non discrimination

Transparency DataOperator

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Strong Regulation in definitive areas

• Regulator controls:– Numbers;– Spectrum;

• Regulator sets regulations for:– All wholesale services of operators with SMP in such services;– Basic retails services of operators with SMP (e.g voice, internet access,

leased lines)

• Creation of Fair Competition is essential to success.

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Resulting benefits to all stakeholders

• Consumer– Choice of supplier– Lower prices– Improved services– Easier access to new systems and services

• Government– Increased value of assets– Increased volume of usage– Increased direct fees from sector– Increased indirect fees from improved business performance

• Operators– Improved economy of scope and scale;– Regulated interconnection and wholesale prices

• ISPs and Value Added Resellers– Ease of market entry– Wholesale interconnection prices

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Conclusion

• The latent demand for telecommunications services at affordable prices creates a significant opportunity for Lebanon;

• The Government in implementing its Telecommunications Law and Policy will unlock this latent demand and bring benefit of all stakeholders;

• The creation of the TRA is the next step in the implementation of the reform.

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A TRA working in an open, transparent and consultative manner, staffed with experienced people and learning from

international best practice will, within 5 years, have a positive impact on employment, trade, GDP and make a

significant contribution to reducing the nation’s balance of payments and debt