In this exclusive interview with Telecom Review, Imad Kreidieh, CEO and chairman of Ogero, discusses the challenges confronting the telecom sector, the repercussions of currency devaluation and the role of 5G technology in Lebanon's telecommunications landscape, among other insightful topics.
What challenges has Ogero faced in terms of providing reliable internet and phone services, and how are you managing to address the difficult situation that the sector is going through?
The most significant challenge we are currently grappling with is related to power supply. In fact, ever since EDL stopped providing round-the-clock service, we have experienced numerous interruptions due to a shortage of fuel. As a result, we have been forced to rely on our own resources and funding to power our exchanges and continue delivering services to the Lebanese citizens. This power supply issue has been our primary challenge. It's important to note that our core network and technology have been functioning quite well; the interruptions have primarily occurred at points where exchanges had to be shut down due to power problems.
Lebanon has experienced a significant devaluation of its currency. How has this currency devaluation impacted the telecom sector, and what strategies have been employed to mitigate its effects?
This issue doesn't only affect Ogero but also extends to most of the public sector. While other public sector entities like EDL and other public services have managed to price their services in dollars and receive payments in US dollars, unfortunately, our bills are still denominated in Lebanese pounds. We are still using an exchange rate of LL. 26,000 to the US dollar, which is insufficient to cover Ogero's operating costs. This situation is unsustainable, especially given the expected continued volatility of foreign currency in the market, which will likely lead to further devaluation of the Lebanese pound.
In the near future, we anticipate returning to square one in terms of the currency devaluation crisis. Regrettably, it seems that we have no choice but to consider billing in US dollars or, at the very least, in Lebanese pounds tied to the exchange rate platform that BDL is planning to implement.
Do you have any long-term sustainability plans in place to ensure that Ogero continues to provide stable services?
Under the circumstances, the whole country lost its capacity for proper planning. In effect, the political & financial crisis disrupted the completion of the 2017 technology road map. FTTH project came to an abrupt stop, the optical transmission network (OTN) is half done along many more critical projects. Sectorial improvements faded away, Ogero entered survival mode. Nevertheless, we have elaborated a plan to ease the pressure during 2024 by regaining control over the power issue & consequently optimizing the management of our cashflow. Ogero shall bank on the government emergency funding, the allocated quota of the Iraqi oil donation & the Chinese donation of solar energy equipment.
Could you provide more details about the Chinese donation for the solar energy project and how Ogero plans to transition to renewable energy?
In 2017, I proposed transitioning Ogero to green energy, but it wasn't a priority back then. I wish the Ministry of Telecommunications had embraced the idea earlier to avoid our current situation. Ogero lacks the funds for this project, so we sought help from CDR, securing a Chinese government donation to power 358 sites with solar energy, mainly in rural areas. The donation's progress is promising, with the tendering process in China. However, we anticipate equipment arrival and deployment by summer 2024.
Switching to alternative energy sources at Ogero offers several advantages, notably significant cost reduction, including a $10 million yearly cut in fuel expenses, as we generate 23 megawatts of power daily. Solar panels and solar energy will lower our carbon footprint, reduce operating costs, ensure service sustainability, maintain connectivity and enhance profitability by easing cash flow constraints.
In your opinion, how significant is the telecom sector for Lebanon, and what are the future plans for building a resilient sector that takes into consideration other sectors?
Lebanon has a rich history in pioneering telecommunications in the Middle East. It's essential to remember that we were the first country in the region to launch GSM operations, and we have not only been pioneers in the field but have also contributed by providing human capital and expertise that has aided the development of the telecommunications sector in other countries in the Middle East. Lebanon remains a vital source of know-how and expertise in the telecommunications sector, and this is one of our key strengths.
Looking forward, I have no doubt the telecom sector will recover, if decision-makers within the Ministry of Telecommunications are more engaged in medium to long term strategic planning. Provided the Council of Ministers urgently enforces the implementation of Telecommunication law 431. Lebanon has all the ingredients not only to recover but to excel, all we need is a vision with a plan.
What is the future of digital transformation and 5G technology in Lebanon?
In Lebanon, several attempts have been initiated to launch a digital transformation of the public services. OMSAR, with the help of the European Union and the world bank came up with a strategy and a roadmap. Unfortunately, the October 2019 unrest, the political crisis & the financial collapse halted the launch of this strategy. The real reason behind failing to adopt the strategy, remains the undoubted lack of commitment of the various governments to the project.
This lack of commitment is clearly demonstrated through the reluctance of the different ministries to cooperate with OMSAR regarding the rollout of the initiative & their deep desire to maintain a so-called autonomy in managing the technology side as well as the safeguarding of their data. What is required today from the Lebanese government, is a clear mandate to an empowered ministry &/or a governmental body to lead the implementation of the strategy.
It is worth noting Ogero Telecom has been proactive in building several data centers as well as a public cloud, offering data hosting and high-speed connectivity to market players. It is a matter of fact that the CERN supercomputer is hosted by Ogero as well as the “IMPACT” platform. What I am saying here is we do have a robust infrastructure to enable the digital transformation in the country, it only takes the will and the planning to move forward.
Ogero, with its hosting capabilities, is becoming a central hub for digital transformation in Lebanon. However, for effective transformation, clear responsibilities need to be defined, and it should be initiated by the government, requiring cooperation among ministries to centralize and launch a concerted effort towards digital transformation.
Regarding 5G deployment, I do believe the absence of concrete use cases (smart cities, automated industries etc.…) does not justify a commercial and economically viable deployment of 5G technology. If I was at the helm of the wireless operators, I would increase the penetration of the LTE-a technology, reduce the operating cost of the 3G networks & increase digital offerings for now.
At Ogero, we have consistently played the role of disruptors, refusing to accept 'no' for an answer. We have always strived to push forward and be resilient. Since 2019, we have championed a 'can-do' attitude in Lebanon, and this determination has been crucial in keeping the sector afloat. We are eager to continue making progress and enhancing Lebanon's infrastructure, and we hope to have the support of decision-makers to achieve even more in the future.