Mobile monopoly a well-toned example of how state dials into lucrative markets

 

The private sector and government accuse each other of greed, writes MICHAEL JANSENin Beirut

AS THE airliner sidled up to the terminal, the Lebanese switched on their mobile phones and began speaking to their relatives and friends, hands gesturing, voices booming. Here everyone has a mobile or two: doctors, lawyers, taxi drivers, ladies of leisure, journalists, students, maids and construction workers. The mobile, bought cheaply new or second-hand, knows no social or class distinctions. A cacophony of ringtones disrupts business meetings and concerts and spoils serene moments on cafe terraces projecting over the glittering sea.

For the Lebanese, the mobile, or cellulaire, is an icon of contemporary life. No one under the age of 30 can imagine how people managed without mobiles. Sardonic Iraqi artist Nuha al-Radi, a long-time resident of Beirut, immortalised the mobile in an oil painting, studded with sequins and tiny mirrors.

For the Lebanese government, the mobile is a golden cash cow, a serious source of revenue in a country where the wealthy evade tax, the middle class pay as little as possible, and the poor have no income to tax. The public mobile service, linked to two private companies, is the most expensive in the world.

Short-term visitors are particularly vulnerable to exploitation: if they want to connect to local networks, they must pay $40 for a sim card which lasts a month and provides a brief period of chat. The cheapest renewal talk card costs $23.

In Iraq, Jordan, Egypt and the Palestinian territories, visitors pay a small sum for a sim card that lasts “forever” as a dealer in Amman put it, and then buy time at reasonable rates whenever they are in these countries. An Iraqi sim card with extended talk time costs $12; renewal cards begin at $5.

For politicians and businessmen, the cellulaire sector could be the vanguard of a new wave of privatisations. But privatisers have been unable to break the state’s grip on mobiles. The struggle recently intensified when cabinet colleagues tried to oust telecommunications minister Charbel Nahas, who has been trying to both protect consumers and retain revenues for the government. He accuses “greedy” elements of trying to turn the state monopoly into a private monopoly and complains that there has been little investment to improve the system.

The lack of investment is not confined to telecommunications.

Electricity regularly cuts out between four and six hours daily; water is in short supply. Sofia Saadeh, an academic, observed that the power problem could be solved by the construction of a couple of gas-fired plants, while the government could do more to impound water from the country’s many rivers and streams instead of allowing the precious fluid to flow into the sea.

However, investment is stymied by opposition from two quarters: individuals and private firms that make up for shortages by operating neighbourhood generators and trucking in water and powerful businessmen who seek to run down the utilities until the public cries out for privatisation.

Privatisers argue that businessmen can provide the services government can no longer deliver. They cite two examples of successful privatisation. The first is the reconstruction of the civil war-devastated commercial area of central Beirut. This has been handled since 1994 by Solidere, a Lebanese joint stock company closely connected to Rafiq al-Hariri, the former prime minister assassinated by a car bomb in 2005. Solidere was always and remains controversial.

The second example cited is the collection of refuse throughout the country by Sukleen, a government-funded private firm. The army of Sukleen workers, dressed in green jumpsuits and wheeling green bins, working 24 hours a day, seven days a week, keeps rubbish at bay but has not yet defeated the mounds on street corners in the capital or in other cities, towns and villages. Both these privatisations were carried out while Hariri, a billionaire businessman, was prime minister of Lebanon.

The Lebanese argue endemic corruption has ballooned since the privatising of the 1990s. Lawmaker Ali Fayyad told The Irish Times it is an option only when each sector is thoroughly investigated and evaluated. He argued it would be best to partially “liberate” some sectors, leaving 51 per cent in government hands and placing 49 per cent with private interests.

“At present, the monied whales are waiting to swallow everything,” he said.