Oct. 24, 2018
Looking to spur technological developments, innovation, and entrepreneurship in Lebanon's ICT sector, the Ministry of Telecommunications (MoT) launched MIC Ventures, a fund investing in telco start-ups. The ministry, through its two mobile operators, MIC 1 and MIC 2, otherwise known by their mobile network names Alfa and Touch, is injecting USD48 million into new ventures in the sector. The mobile operators each have a 50-50 stake in the fund, which launched in February 2018.
Khaled Zeidan is the Managing Director of the fund and brings more than 30 years' experience in the global and regional telecoms fields, in both the public and private spheres. He has also been the Managing Director of the Middle East and Africa division of Coriant since July 2017, having built his knowledge in cloud, software, and hardware networking. Coriant delivers innovative and dynamic networking solutions for a fast-changing and cloud-centric business world. Zeidan has worked for large multinational companies, such as AT&T and Oracle, as well as start-ups, including ITXC, Ditech Networks, Nominum, and IneoQuest.
According to Zeidan, start-ups will likely receive USD2 million from MIC Ventures, but this amount is flexible and can be determined on a case-by-case basis. The fund is looking for start-ups within four verticals: fintech, gaming, content, and logistics and delivery. Zeidan, who was originally the fund's concept creator and not the intended manager, asserts that there are private sector companies and ventures that are generating profits on growth trajectories, though not at the required level for funding under the central banks Circular 331. This is where MIC Ventures comes into play—to catalyze funding, and in turn innovation, for those already developing the sector.
Each vertical will have an expert on the management team to evaluate proposed deals. Deals endorsed by the evaluation committees will then go to the board for final approval, which includes significant input from the Minister of Telecommunications, as MIC 1 and MIC 2 are state-owned and under the mandate of MoT. The current minister, Jamal Jarrah, fully supports the fund.
Lebanon, more broadly, is trying to foster a conducive environment for entrepreneurship and the private sector, with other initiatives to complement MIC Ventures. One of those is Business Support Unit (BSU), which was announced the same month as MIC Ventures and is housed within the Investment Development Authority of Lebanon. Somewhat overlapping with the new fund, BSU also targets ICT, tech, telco, agro-tech, and digital media start-ups, providing them with market information, free legal, tax, and accounting advice, as well as licensing support for establishing operations in Lebanon.
Ultimately, Lebanon's ICT targets include increasing the scale of the broadband network, implementing fiber optic infrastructure, and making high-speed internet the standard across Lebanon. And the private sector is a willing collaborator. In an exclusive interview with TBY, Ogero's Chairman and Director General, Imad Kreidieh, affirmed the telecommunication company's goals are aligned with the ministry's plans. He noted, “Our objective is to put Ogero on the regional telecommunications map. Instead of being a reactive institution, we want to be a proactive organization that enables growth and pushes boundaries of innovation." Specifically, one of Ogero's target areas is fiber-based infrastructure to close the gap between service quality in urban and rural areas. The company will receive USD300 million from the government over four years starting in 2018 to execute the project. As for supporting the Lebanese economy overall, Kreidieh added, “We want the company to stimulate strong growth in both (the ICT) sector and the national economy."
With a shared vision, Zeidan at MIC Ventures, the private sector, and MoT are creating synergies to update Lebanon's ICT sector, and maybe even catapult the country into becoming a regional hub.