As it took us more time to get a free elevator and reach, after so many stops, the office of the CEO, than it took us by car to reach Alfa’s headquarters in Furn el Chebbak, we had in mind that we will barely have few minutes to get ambiguous answers to barely a quarter of our questions, obviously with a lot of arrogance that is needed to bare the amount of activity we saw in a few minutes inside the building. We were wrong. Marwan Hayek, Chairman and CEO of Alfa, was eager to answer all questions (including the ones we received from fans on twitter and facebook), address all concerns, admitting weaknesses and praising achievements, clarifying misconceptions and drawing a clear transparent realistic image of the – let’s say – controversial status of Lebanon’s telecom sector and mobile internet service and its latest developments… This, while it is worth noting before we start, that the company is currently being managed by Orascom Telecom Media and Technology (OTMT).
How can you briefly evaluate and rank the telecom infrastructure in Lebanon comparing to the World?
Technically we are well in line with all what’s happening around the world, especially with the latest launch of the 4G-LTE service and the developments that we have done since launching the 3G+ service in October 2011. Over the past two and a half years, I can say that we have managed to reposition Lebanon on the telecom scene of the region.
People might see that we are coming late on many fronts and that we are not really up to it, but that is not true. If you take a look at the Alfa infrastructure today, you will find that it is really complex and that it requires a certain level of expertise (from a technical perspective) to handle and manage it. This positions us in line with the rest of the world.
We are the 52nd county in the world to launch the 4G LTE technology, which is quite a milestone for a country like Lebanon.
If you take a look around, you will find out that the 4G LTE has only taken a shape in the Gulf area and so far, we are the first country (in the region) outside the Gulf area to invest and launch this technology. In contrast when it comes to 3G+, we came late and probably we were among the last countries to adopt this technology for so many reasons yet we were able to catch up and the massive 3G+ rollout shows that, with us deploying around 930 3G+ sites in 2 years.
What could lead to confusion in people’s mind is that we are lagging behind on the commercial side of the sector. Unfortunately for customers but (sarcasm comes in) fortunately for us, competition is restricted between two operators owned by the government, so in a way it doesn’t look like what you see in other countries like Egypt or UAE or other places in the world, where private operators really have to fight to attract and retain customers. Yet we should not forget that the telecom and mobile sector brings around two billion dollars of revenues to the government’s treasury so we understand the restrictions on flexibility there.
We tried in the last year and a half to create some differentiation between the two players on the offerings level and we launched several products, plans and packages that were all approved by the Ministry of Telecommunications, the owner of the sector. We have seen a great success and demand on some offerings but unfortunately others were not as successful as we were hoping. We are still analyzing the reasons behind this.
Out of the six or seven bundles we launched in the last 18 months, only 20% of our base opted for one of them. The remaining 80% are still using the traditional prepaid or postpaid plans even though the new bundles do offer special rates and better prices!
Maybe it is because of lack of knowledge?
We did communicate a lot the different offerings. If you look at our advertising and communication budget for last year, it is equivalent to the last 10 years of Alfa’s budget.
Given Alfa is owned by the government, are you allowed to undergo infrastructure developments on your own?
With the current setup that we have, all investment decisions are to be taken or approved by the Minister of Telecommunications, so anything we have to do as infrastructure development has to go through him for approval. Once approved, we implement.
Hence, our role is to recommend and it’s up to the ministry to decide; yet we have seen a lot of positivity and openness over the last two years for new investments from the Ministry and that has helped us in expanding our 2G infrastructure massively through this period as well as rolling out enough new 3G+ sites that allow us to cater for the growing demand of our subscriber base for data services. And for you to have a clear idea: Today, we have around 1.85 million subscribers, almost half of them are data users, which is massive.
Last year alone, we deployed more than 200 new sites and this year we are also considering installing the same number or maybe a little more of cell sites . Moreover, our 3G+ rollout has been aggressive as I said and further expansion is on its way this year. It’s important to note that all our new cell sites are by default equipped with both 2G and 3G+ technologies.
Who spends the money on investments? You or the government?
The government. In fact, let’s talk about the period of 8 to 10 years before 2009; over that period, the needed budget to invest in the network expansion has been missing. The network was hence not performing as it should have been and customers were experiencing difficulties. Our role as Operator is to suggest and draw investment plans to the Ministry of Telecommunications and it’s the Ministry’s final decision to invest or not in the network. Honestly, investments depend on public treasury situation and overall strategy at MoT.
Today, we are in a good position. When it comes to 3G+ alone, our customers can experience speeds up to 3 to 4 Mbps which are considered high speeds given all external factors that could affect the speed such as number of users connected to one site, weather conditions, etc… Our 2G coverage is satisfactory as well where we cover almost all the country and our technical teams are always monitoring our network performance and taking action when and where needed.
Are you in favor of privatization of the sector?
I am in favor of competition. Yet, Competition can take place with the current setup and as well as with the privatization setup however it happens in different ways depending on the set up.
I am saying that because currently we do see some competition in the market and as an example, you can take the various offerings that we have and our competition doesn’t and the opposite is also valid e.g. our exclusive U-Chat Plan – Army Line, Midline, etc…
If the decision to liberate the market is taken today, then the market will see more dynamism where the two operators will be competing to acquire and retain new customers, and operators will eventually have a free hand on the pricing side and to slash prices as much as it’s economically viable but also they will need to come up with new offers in a higher rate that we currently see.
People say “let the 3G work before jumping to 4G”, so are we jumping ahead of ourselves?
We are not jumping ahead of ourselves, we can do both at the same time; deploying 4G LTE and being among the first operators worldwide to deploy this technology, doesn’t mean that we are neglecting investment on the 3G+ infrastructure. We are working on both in parallel. In fact, in areas where 4G LTE is not available, 3G+ is always available to offer the needed data services to subscribers, knowing that the 3G+ service offers as well a fast and reliable connection.
We are expanding our 3G+ capacity and coverage and we have been working on enhancing the deep 3G+ indoor coverage or what is technically called the “U900” because a lot of people are complaining that they only receive the 3G+ signal outdoor but once they go inside their house they lose it. We already have around 100 related sites that are being equipped to enhance the indoor coverage, and they will be followed by other sites. We expect this project to be finalized by end of 2013, which should help increase the level of satisfaction among our growing base of data subscribers which for instance reached more than 850,000 currently.
What we are implementing right now is a new frequency on 3G+ which enables us to have similar coverage between both 2G and 3G+.
so basically it means that: whatever level of service a customer gets through 2G, he/she will also get the same level over 3G+ as well. So hopefully in the next couple of months you, and our Alfa customers, will cite the difference.
Which countries are considered to be the most advanced in Telecommunications?
The Scandinavian countries and South Korea/Japan are always ahead of everyone else in the world when it comes to telecommunications. They can also be considered in a better position when compared to the USA or Europe which has a less smartphone usage than us.
In Lebanon the penetration rate of smartphones reached 60%. and this high penetration rate puts more pressure on our network caused by this high date usage and consumption.
And why can’t we be among them?
First, who said we are not amongst them? What I can assure to you today, is that we are not that far; I mean we, as Lebanese individuals and mobile users using the telecom infrastructure, are as sophisticated as users in Europe or the United States are. We have high expectations, we demand a good- if not the best quality of service- and we are always up to date to the newest trends especially when it comes to technology.
With regards to the quality of service, we have the best supplier in the world which is the Swedish vendor: Ericsson. According to feedback we got from Ericsson, out of the 3,000 clients they have all around the world, we, as Alfa, are above the average in terms of performance, network infrastructure and quality of service.
Take the drop-call rate as an example; the worldwide average for the drop call rate is between 0.8% and 1% while we are now at 0.4% to 0.5% on the Alfa network, which is below the average. This means that out of the 100 million calls our customers make per month, only around 400,000 calls drop which is really minor considering the high number of calls, and given the fact that we are always working towards reducing this rate further through several actions.
You have to take into consideration that between 2002 and 2008, very little was being done in Lebanon in terms of upgrading the infrastructure due to the lack of needed funds. And let’s not forget that there are things that need to be provided so we are able to offer a seamless service and With time, the market will witness a surge in the devices supporting the 4G-LTE technology as users demand will increase, and this comes in conjunction with our expectations in the rise of Alfa data subscribers to more than one million by the end of this year especially that we are the first operator in Lebanon and 6th in the MENA region to having recently launched the 4G LTE service on smart phones with voice capability. be able to provide users with speeds that can reach up to 30 or 40 Megabits per second; this includes things like electricity or fiber optics. We need fiber connections to every site. We have 1200 sites in the country and none of them is connected through fiber optics. All our sites are connected through microwave links and this technology has limitations. A major component that affects the internet quality of service i.e. the internet gateway is not within the control of Alfa as it belongs to the fixed infrastructure provider.
Where are we now in terms of 4G LTE and where are we going?
When we first launched the 4G LTE in Beirut administrative area in May 2013, we distributed 150 4G LTE dongles to people so they can test the service and we mostly received a positive feedback from them.
And as we promised before, by the end of the year, the 4G LTE network will be covering Greater Beirut, and main cities e.g. Jounieh, Jbeil, Batroun, Tripoli, Saida, Tyre, Baalbek and Zahle.
We are talking here about 25% of our network being equipped with 4G LTE, which covers around 40% of the Lebanese population.
The 4G LTE enabled devices are still scarce and that’s one of the reasons why customers are not very encouraged to subscribe to the 4G LTE service yet Recently, I had the 1st of its kind in Lebanon live Skype test call with your fellow blogger Amer Tabsh from Future TV on his tech s eg me n t “I-Tech” via a 4G connection established through an LTE enabled dongle connected to a laptop.
To give you one example, Samsung Galaxy S4 for example is not 4G-enabled in Lebanon. But Samsung are providing us with several 4G-enabled devices so we can test the service on them and see if it works or not.
As for Apple, and in order for the 4G LTE service to run on their devices, they have to certify you as a mobile operator and acknowledge Lebanon as a mobile market on their map. We had been in contact with them for that purpose and even the Ministry of Telecom did contact them, but they were very slow to reply to us. We have recently signed an NDA with them which should enable the ball to start rolling.
Until only few weeks ago, they didn’t see Lebanon as a serious market and they tell us “you don’t exist on our map”. So for now, 4G LTE is available on dongles, tablets, and on several smartphones.
Will 4G SIM cards be able to make regular phone calls?
Voice over 4G LTE is still under development in the most developed markets worldwide, but in the deal that we made with Ericsson, we got voice over 4G, but it requires certain upgrades on the infrastructure and we have to wait till 2014 to get it working. Meanwhile, what we have launched in August is something called “CS Fall Back” which stands for “Circuit-switched (CS) fallback” ”. It basically downgrades you from 4G to 3G+ when you receive a voice call. We tested it and it is working and now we are waiting for new Samsung devices to arrive to test it on them.
Oh and by the way, the Circuitswitched (CS) fallback feature is offered exclusively by Alfa.
Any new offers or packages from Alfa soon?
What we have in the pipeline is a new package bundled with handsets.
It is almost ready as we are now finalizing discussions with the suppliers to have a variety of handsets in our stores so subscribers can choose the one they want with the connection they are subscribed to. There are certain conditions that will be taken into consideration to make the subscriber eligible for the device like the history of the customer, his/her average bill … It can go up to giving the device to the customer for free.
A lot has been said about the telecom data and privacy issue, where do we stand?
What I can say is that we are as private as Lebanon is (joking) and as open as our borders are. It’s not in our hands unfortunately as mobile operators though despite all measures that have been taken. Our subscribers database and its related info is secured with very limited access to it internally. Let’s not forget that our country is a target by itself given the central location we enjoy in the region. Specialized Agencies can even hack into our communications remotely and without being connected to us to physically (internet, international, satellite, ect). We are not a special case however. It’s the same everywhere in the World especially after the recent Snowden and NSA case. But if you think about it, most of the time it’s for our own safety and security when it’s regulated especially in countries like ours. It helped and will help to catch people who were planning to carry out terrorist attacks.
What we have is the data saying that a certain number called another number and the duration of the conversation and the date and time it happened. But we do not have the conversation itself.
Lebanon has lot of application developers; do you have or are you planning to have any programs that help those people?
We have established an Application Store project in collaboration with the Ministry of Telecom, and so did our competition.
Maybe developers would prefer to feature their apps on the Apple Store or Play Store but you have to know that the advantage of our store is that it is dedicated purely to Lebanese developers. And Alfa customers can download those applications whether they are free or for a fee. The same applications will be found on international stores; yet, the added value of our store is that it gives to the user the ability to pay through Alfa postpaid bill or Alfa prepaid credit account where the fees will be directly deducted from the customer’s account.
Until now, not many people or users know about our “the Alfa mobile app store” and since its launch, only few people submitted their apps there. Therefore, we will do a few campaigns to promote and encourage developers to join us.
We even had a few meetings with CEOs of Arab telecom companies to discuss the initiative to start a pan- Arab store; but again, a market of 300 million users against a market of 5-6 billion customers worldwide meant that the project never took off.
How do you evaluate your relationship with the online community?
To be honest, we were not that active with the online community. We recently started getting more active, with the Application Store project and now we are planning several events where we will invite bloggers and the online community to see with them how we can join hands.
Finally what can you tell us about the “Alfa 4-life” CSR Program?
I always say that “Alfa 4-life” is our life. It is one of the few things we do on a daily basis with a smile, because we have a cause to defend and to promote in society. Unfortunately we have a lack of resources in Lebanon especially for children in communication needs, so we found a way on how to fill some of the gap.
We are supporting many NGOs like SOS, Sesobel, Acsauvel, Father Andeweg Institute for the Deaf and the Lebanese Autism Society (LAS) and it’s not just about donating a sum of money and taking a picture and then disappearing the next day. It’s a full program that runs all year long with specialized people for each of the NGOs. With SOS Villages for example, we have someone who teaches the children music and now they organize a concert at the end of each year, where we all go and sing with them. With the Lebanese Autism Society, and 2 years ago, we discovered an extremely talented young guy called Ali Tlais, we believed in his talent and have put at his disposal all the necessary elements for developing his artistic abilities including: drawing and painting lessons, needed material for practicing the paintings art and public exhibitions for public recognition. He is now a renowned painter doing yearly exhibitions and his paintings have been exhibited in Europe. He is also helping sustain his association: the LAS. In the end, I ask other companies to join forces with us in order to help and give back much more to society.
Questions from our social media fans:
How much is your monthly mobile bill?
I don’t know (joking). The company pays it.
Do you have a Touch number?
Yes I do. I use it just to realize how better the Alfa service is (again joking).
What handsets are you currently using?
iPhone 5 and BlackBerry Q10 Q
How many lines do you use?
About 5.
If you were appointed the Minister of Telecom, what are the things you will do or change?
If I was a policy maker, I will consider the lack of competition. But to be fair, since Nicolas Sehnaoui became Minister, lots of things changed. When we used to advise or recommend something previously, it used to take months for us to get an answer. But now we have a problem keeping up with the minister’s pace in doing things. For example, when we met and decided to launch 4G LTE, he wanted us to launch it the next week but obviously we couldn’t do that. I really wish he remains telecom minister in the new government. We have great mutual understanding and he is very close to the youth and the digital community, he is even ahead of us in some areas, he has a great relationship with the bloggers and digital community and knows their needs.
