Lebanon to drop internet price after cutting phone rates -minister

A country of about 4 million people, Lebanon has some of the world's highest mobile phone service prices, but service is often spotty. Critics blame mismanagement, political disputes, corruption and a government monopoly on infrastructure.

The slow and costly Internet is one of the main obstacles for businesses in the country. Analysts say it has inhibited economic growth at a time Lebanon is suffering from fallout of the war in neighboring Syria, which hit tourism and investment.

Telecommunications Minister Boutros Harb, who was appointed in February to a government formed after nearly a year of deadlock, said he was working to lower prices and improve quality to stimulate the economy more broadly.

"Now I'm nearing a measure related to cell phones, and I have much bigger and more important measures related to internet prices," he told Reuters in an interview.

"The cell phone measure could be taken gradually, but the internet price will be lowered a lot, in addition to increasing the speed (which will) encourage people to use it," Harb added, without saying exactly when or how much prices would be lowered.

This month, Lebanon cut the price of local and international phone calls on mobile and landline networks by between 30 and 50 percent to encourage customers to use the service more often.

"Why are Lebanese paying cell phone call prices that are the highest in the world?" Harb said, adding landline use had increased about 30 percent since prices were lowered.

"I want a phone in Lebanon to be on par with international prices, and not more. I want a phone in Lebanon to meet the needs of people. I want you to be able to use it wherever you are in Lebanon," he said.

Lebanon's two mobile carriers, Alfa and MTC Touch, are both owned by the government although Alfa is managed by Egypt's Orascom Telecom Media and Technology and MTC Touch is managed by Kuwait's Zain.

The government cut broadband Internet subscription fees by over three-quarters in 2011 but they remain high for the region.

Speed is also a problem. Ookla, a company that tests internet speeds, often ranks Lebanon near the bottom of its global Net Index, below countries including Zimbabwe, Iraq and Uzbekistan.

Mobile phone penetration in Lebanon was 91 percent in 2012, lagging much of the Middle East, where rates in many countries are above 100 percent as customers own multiple accounts.

Still, transfers of telecoms proceeds contributed about $1.4 billion to state finances in 2012, according to finance ministry figures, making it the government's biggest single source of non-tax revenues.

Harb said increased consumption should make up for the reductions in phone call prices.