TBY talks to Marwan Hayek, Chairman & CEO of Alfa, on increasing subscriber numbers, the introduction of 3.5G, and the importance of the mobile market for Lebanon’s economy.
TBY How has your personal experience in Lebanon and the international marketplace helped Alfa contribute to the development of the local telecoms sector?
MARWAN HAYEK Alfa’s biggest contribution to the Lebanese telecoms sector in the last 18 months has been upgrading its infrastructure to the latest 3.5G mobile technology, which we expect to launch by the end of September or beginning of October 2011 to our subscribers. My international experience and exposure has given us the know-how that has enabled us as an organization to steadily move forward with 3.5G implementation in Lebanon and to show the Lebanese people that moving to the 3.5G era is the right path for the development of the telecommunications sector and the economy as a whole. Introducing 3.5G in Lebanon is a historical milestone that will give a big boost to our national economy, attract new investments, and spur economic growth.
Alfa managed to increase its number of subscribers significantly in 2010. To what do you attribute this growth?
The growth in Alfa subscribers was estimated at 22% y-o-y until June 2011 and came as a direct result of the reduced prices that were introduced in 2009—a 30% reduction was applied on both post-paid and pre-paid offers. Also, it was a direct consequence of the decision of the Ministry of Telecommunications to re-invest in the sector. The Alfa network is owned by the government, but is managed by Orascom Telecom Group, a leading private telecoms entity. Therefore, the decision of the Ministry to invest in the network and expand capacity went some way to quell the built-up demand that was out there in the market. Today, Alfa has a total subscriber base of around 1.5 million customers out of a total of 3.1 million mobile users, in a country of only 4.5 million. This means that the cellular penetration rate in Lebanon currently stands at around 75%, which is an acceptable rate but still lagging behind that of neighboring countries, where penetration rates are closer to 100%.
What are your expectations for growth in 2011?
The objectives we have for 2011 are basically to grow our subscriber base further, especially on the data side. Introducing 3.5G will boost this uptake. From voice and 2G customers, we seek to reach a mobile penetration rate of around 85% in the country—and out of this new growth we intend to grab more than 50% of the market. In 2010, as per the latest report from Arab Advisors Group, we were able to attract 60% of new subscribers. When we, as Orascom Telecom Group, took over the management of the Alfa network back in 2009, Alfa’s market share was around 40%, while MTC’s share stood at 60%. Today, Alfa’s market share stands at 47% to 53% for MTC. Therefore, we have managed to narrow the gap between Alfa and MTC.
How will the modernization of Lebanon’s telecommunications network open up the sector to multinationals?
Dubai is home to numerous multinational companies. One of the reasons for being based there is the ease of connectivity to the rest of the world. If Lebanon sees an improved situation and connectivity comes back to the country, there is no reason why people won’t choose Lebanon. Introducing 3.5G will open this door, through facilitating starting new businesses in Lebanon and encouraging international and regional organizations to establish their head or regional offices in Beirut. We want to start by driving the telecoms industry in Lebanon at the fastest possible pace in order to bridge the gap we still have today between other countries in the region and beyond since telecoms is a horizontal growth engine that can positively impact many other sectors, such as health, education, and banking.
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