TRA Strategic Plan 2008-2009TRA Strategic Plan 2008-2009

April 25, 2008

The TRA Board was appointed on February 21, 2007, and the TRAThe TRA Board was appointed on February 21, 2007, and the TRA

began its regulatory work as of March 2007began its regulatory work as of March 2007

TRA Chairman

TRA Chairman

Financial Affairs

Financial Affairs

ICAUICAU MCUMCU TTUTTU LALULALU

MarketingMarketing TariffsTariffs Spectrum Affairs

Spectrum Affairs LegalLegal

Consumer Affairs &

Public Consultation

Consumer Affairs &

Public Consultation

PolicyPolicy Technical OperationsTechnical

Operations LicensingLicensing

Market AnalysisMarket

AnalysisStandards and QOS

Standards and QOS

Cost Accounting

Cost Accounting

Administrative Affairs

Administrative Affairs

Internal Audit

Internal Audit

Independent Regulatory Authority

The TRA's Organizational Chart was largely determined by Decree 14264

As a first step in assuming its duties as per the As a first step in assuming its duties as per the Telecommunications Law, the TRA has defined its mission Telecommunications Law, the TRA has defined its mission statement and objectivesstatement and objectives

Mission Statement: To establish a regulatory environment that enables a competitive telecommunications market to deliver state-of-the-art services at affordable prices to the broadest spectrum of the Lebanese population

Establishment of an Independent Regulator – April 2007

Prerogatives of the TRA

Issue regulations and draft Decrees (Art 5)

Manage Radio Frequency, Interconnection agreements, numbers, equipment import, etc.. (Art 29)

Liberalize the market and take any necessary measure to reach a competitive market (Art 30)

License telecommunications service providers and radio frequency bands (Art 20)

Resolve disputes between service providers (Art 43)

There is a wide range of benefits stemming from LiberalizationThere is a wide range of benefits stemming from Liberalization

Increase service penetration Increase customer choice Improve price to quality ratio Introduce new technologies and services Reach underserved areas

Keep up with technological advances Introduce good governance and management Ensure more effective infrastructure Improve sector productivity Improve financial performance Increase overall telecom revenues Attract private and foreign capital Improve connectivity and penetration of ICT

Generate revenues from privatization Generate revenues from licenses Spur job creation throughout the economy Join international trade organizations (e.g. WTO) Join the global trading system (e.g. EU association) Catalyze growth of information economy Improve global competitiveness of the economy Improve general economic performance

Benefits the CustomerBenefits the CustomerBenefits the CustomerBenefits the Customer

Benefits the Telecommunications IndustryBenefits the Telecommunications IndustryBenefits the Telecommunications IndustryBenefits the Telecommunications Industry

Benefits the EconomyBenefits the EconomyBenefits the EconomyBenefits the Economy

The TRA strategic plan covers three key objectives for 2009, whichThe TRA strategic plan covers three key objectives for 2009, which

evolve around privatizing the two existing mobile networks andevolve around privatizing the two existing mobile networks and

liberalizing broadband services liberalizing broadband services

5

22

33 Issuing key regulations (Spectrum Licensing, Licensing,

Spectrum Pricing Opinion, Interconnection, Quality of service, Numbering, SMP, Consumer Affairs, etc..)

Issuing key regulations (Spectrum Licensing, Licensing, Spectrum Pricing Opinion, Interconnection, Quality of service, Numbering, SMP, Consumer Affairs, etc..)

Liberalization of the telecom sector starting with mobile communications (2G/3G) by Q1 09 if GoL Decision

Liberalization of the telecom sector starting with mobile communications (2G/3G) by Q1 09 if GoL Decision11

Broadband

Providing for competition in the broadband market

Providing the regulatory framework for the launch of ADSL services

Regularizing DSP licenses

Improving Lebanon's international connectivity

Broadband

Providing for competition in the broadband market

Providing the regulatory framework for the launch of ADSL services

Regularizing DSP licenses

Improving Lebanon's international connectivity

The Board will focus on building the TRA’s institutional capabilities from 40 in 2007, with a target of The Board will focus on building the TRA’s institutional capabilities from 40 in 2007, with a target of 80-90 professionals by Q2 200980-90 professionals by Q2 2009

The TRA's draft Liberalization Roadmap proposes introducing competition across all The TRA's draft Liberalization Roadmap proposes introducing competition across all telecommunications markets while allowing LibanTelecom some exclusivity over some telecommunications markets while allowing LibanTelecom some exclusivity over some services for a limited period of timeservices for a limited period of time

2008 2009 2010 2011 2012

Mobile Network Operator

Virtual Network MNVOs

PSTN/ Basic Telephony

Network Operator

Reseller

BroadbandAccess

National

International Access

Facilities Service Provider

Reseller

3

1

*** 5+

**

* Liban Telecom expected** TRA is still considering the appropriate number of NBLs to issue*** Two for the mobile licenses, one for Liban Telecom and two others for the NBLs for data traffic only

License AwardOpen licensing Market Review

NotesNotes

*

The regulations needed to ensure the success of liberalization have The regulations needed to ensure the success of liberalization have been put in placebeen put in place

Spectrum Management and

Licensing Regulation

Spectrum Management and

Licensing Regulation

Administering and Implementing the

NNP

Administering and Implementing the

NNP

Drafting Stage Draft Ready StageConsultation Stage

Final Review (TRA Board)

Issued

Type Approval Regulation

Type Approval Regulation

Accounting Separation Regulation

Accounting Separation Regulation

Spectrum Pricing Opinion

Spectrum Pricing Opinion

Consumer Affairs Regulation

Consumer Affairs Regulation

Significant Market Power Regulation

Significant Market Power RegulationUnbundling RegulationUnbundling Regulation

Broadband Policy Statement

Broadband Policy Statement

Lebanese National Frequency Table

Lebanese National Frequency Table

National Numbering Plan

National Numbering Plan

Liberalization RoadmapLiberalization Roadmap

LicensingRegulation

LicensingRegulation

Interconnection Regulation

Interconnection Regulation

Decisions: • VSAT, • Trial IPTV• Spectrum trial

Allocation for MoT / OGERO

Decisions: • VSAT, • Trial IPTV• Spectrum trial

Allocation for MoT / OGERO

VOIP Policy Statement VOIP Policy Statement

Pricing RegulationPricing Regulation

National Roaming National Roaming

* Interconnection Interim Pricing

Decision

* Interconnection Interim Pricing

Decision

Spectrum Refarming Guidelines

Spectrum Refarming Guidelines

Quality of Service Regulation

Quality of Service Regulation

Regulatory Framework for establishment of

call centers

Regulatory Framework for establishment of

call centers

* Decision approved by the board,, but will be issued concurrently with the Mobile Auction Award.

Agreement on transaction structure (HCP, TRA, MoT)

RFA amended Draft Law ready Consultants re-

appointed

RFA and draft law approved by CoM

Law enacted by Parliament

Process re-launched

Updated VDR Access

Due diligence Q&A Site visits

completed

License and Acquisition Documents finalized

Application due date

VDR closes

Qualifying Applicants announced

Auction Day

CoM approves / disapproves sale

Confirmation letter sent to winning bidders

Performance bond (10% of bid amount) posted

Agreement on bylaws & capital structure of company

Incorporation of companies

40% of bid due (less credit for RoL shares)

Remaining 60% of bid due

license issuance

IPO

T0

T0 + 2 weeks

T0 + 7 weeks

T0 + 12 weeks

T0 + 15 weeks

T1= T0 + 18 weeks

T0 + 4 weeks

T0 + 8 weeks

T0 + 13 weeks T0 + 17 weeks

T1 + 3 weeks

T1 + 3.5 weeks

T1 + 5.5 weeks

T1 + 11.5 weeks

T1 + 12.5 weeks

T1 + 9.5 weeks

The Mobile Auction has been suspended in January 2008, but could be held within 8 weeks from a GoL decision

Most of the preparatory work for the auction has been completed

Until now, and despite the delay encountered, around 10 major regional and international players of the telecommunications sector have shown interest in the auction

Delay of the process will lead to:

• a rather long extension of the management agreement hampering the development of the mobile market

• discouraging investors

• extensive update of the financial, legal and technical due diligences

Both the TRA and HCP are ready to re-launch the privatization / licensing process at any time

The TRA plans to issue licenses (through an international public

auction) in order to establish across Lebanon, best in class core,

metropolitan and access networks

Fixed MoT Infrastructure: currently the only provider of national internet

and data transmission, however needs major upgrade of national and

international capacity.

Fixed MoT Infrastructure: currently the only provider of national internet

and data transmission, however needs major upgrade of national and

international capacity.

National Broadband Licenses: Provide a best in class alternative

national networks (core, metropolitan and access), enabling the national

transmission and provision of high speed communication

National Broadband Licenses: Provide a best in class alternative

national networks (core, metropolitan and access), enabling the national

transmission and provision of high speed communication

Broadband Access Licenses: Unleash competition on the access level

and provide more choice to consumers ( e.g. incumbent data service providers)

Broadband Access Licenses: Unleash competition on the access level

and provide more choice to consumers ( e.g. incumbent data service providers)

The TRA plans to issue:

1. Two new NBLs (alongside LibanTelecom)

2. Unrestricted number of Broadband Access Licenses (for existing DSP and new

licenses) taking into account limitations in the availability of spectrum resource

The TRA plans to issue:

1. Two new NBLs (alongside LibanTelecom)

2. Unrestricted number of Broadband Access Licenses (for existing DSP and new

licenses) taking into account limitations in the availability of spectrum resource

The TRA plans to launch the licensing of national broadband networks in The TRA plans to launch the licensing of national broadband networks in Q4 2008Q4 2008

Nov 08

Licensing Regulation

Draft RFA for Consultation

Nov 08

Final Broadband Licenses AUCTION

Dec 08 Q 1 09

Broadband Policy Statement

The TRA is making rapid progress in developing a regulatory framework to introduce competition in the provision of broadband services. The auction for the National Broadband Licenses and the Broadband Access Licenses will take place before Q2 2009

TRA ready to grant licenses that do not require spectrum

IS and RoW Decrees Spectrum Management & Licensing Regulation

Our CommitmentOur Commitment

The TRA is committed to bringing the country back to the international telecommunications scene through market liberalization

The TRA is committed to reconnecting the Lebanese population with the world. We intend to accomplish this by building a thriving, innovative, and competitive telecommunications market place, driven by a technologically advanced infrastructure-based sector and offering services at internationally competitive prices and quality

The TRA is committed to promoting the interests of telecom Lebanese consumers in the market to make sure they are getting good quality of service at affordable and competitive prices and that their right to safe, secures and confidential access to telecommunications is safeguarded