Eurostrategies Third Floor, Ministry of Telecommunications Riad El-Solh Street, Beirut, Lebanon

1. The Telecommunications Regulatory Authority (TRA)www.tra.gov.lbG Alan HornePresentation at Termium22nd Sept 2004 Eurostrategies Third Floor, Ministry of Telecommunications Riad El-Solh Street, Beirut, Lebanon Fixed line: +961 (0) 1 981 490 Lebanon Mobile: +961 3088660

2. 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

3. 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.

4. 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;

5. 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:……

6. Policies Primary Legislation GoL Policy Documents Acts of Parliament E Commerce Telecoms Sector Data Protection Competition Telecom TRA Strategy, Policies, Procedures Secondary Legislation TRA Decrees Guidelines & Decisions Licences Public Budget (Art.11.2.2) Licenses (Art. 19) TRA structure Interconnection Licensing Certification Spectrum Numbering ? Liban Telecom MIC 1 MIC 2 Class

7. Budget & Funding (Art 11 & 12) • Financial independence – own fund; • Independent audit - Post Audit by Public Audit Court; • Publish financial statement; • Sources of fund…

8. Sources of fund Radio Spectrum Licence Fees (usage) Funds from competitive bidding process and usage Art. 17 $x Admin Licence fees Ministry of finance TRA Surplus Art. 11-funding 1(a) Radio Spectrum Administration fees Art. 17 < 10% of $x Art. 11 funding 2) Full TRA budget for 2 years TRA Art. 11-funding 1(b) Central Bank of Lebanon

9. TRA Organisation Chairman TRA Board Legal Affairs & Licensing Telecommunications Technology Information & Consumer Affairs Marketing & Competition Manager Legal Dept. Manager Licensing Dept. Manager Spectrum Dept. Manager Technical Dept. Manager Standards/QoS Dept. Manager Public Relations Dept. Manager Consumer Protection Dept. Mangr Market Anal Dept. Mangr Policy/US Dept. Mangr Tariffs Dept. Wholesale and retail tariffs, market analysis, universal service Public relations, dispute resolution, contract managers Lawyers, licensing officers Interconnection, numbering, type approval spectrum Head Financial. Head Admin Head Int. Audit

10. 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;

11. 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;

12. 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

13. 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 choiceensuring 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.

14. 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.

15. 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;

16. 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

17. Sector Development - today MoT Policy Regulation Int. Relations GSM Ownership Fixed operations Admin Radio spectrum Mobile 1 Mobile 2 OGERO TV Regulation Telecommunications Industry ISPs TV dist mmds/cable Data n/w providers Private n/w

18. By the end of 2005 TRA Admin MoT TRA supervision Int. Relations LALU MCU TTU ICAU Sector Policy Admin Telecommunications Industry Ministry/ Governmental organisation ISPs Liban Telecom Mobile 3 ? TV dist mmds/cable 100% Ownership Mobile 1 Data n/w providers Mobile 2

19. By the end of 2010 GoL Policy Maker < 50% Ownership Regulator Policy Law Decrees Individual Services Licence Class Licences Interconnection Regulation Retail tariff Regulations Number Management Frequency Management NeCo NewCo Competition Regulations Interconnection Clearing House ISPs Operator 1 Voice, Data Fixed & Mobile Operator 2 Voice, Data Fixed & Mobile Operator n Voice, Data Fixed & Mobile ISPs ISPs Hosts ISPs ISPs ISPs TV Equip Suppliers Radio ISPs ISPs ISPs ISPs ISPs Number Portability Clearing House Mobile, fixed wire, fixed wireless, WiFi, cable, broadcast customers

20. 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;

21. Operator Structure Licensed Operator Mobile Operator Retail Services Fixed Line Services Mobile Services ISP Services Leased Services Fixed Line Operator Account Separation Non discrimination Transparency Carrier Services Department Operating Network Data Operator ISP

22. 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.

23. 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

24. 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.

25. 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