Internet woes risk isolating Lebanon in crisis

By Dalal Saoud

This protest in 2019 in Beirut, Lebanon, started over proposed taxes, especially an unexpected government plan to impose fees on WhatsApp users. Two years later, the country is in danger of losing Internet connection.

File Photo by Wael Hamzeh/EPA-EFE

BEIRUT, Lebanon, Jan. 14 (UPI) -- In October 2019, a government decision to impose a tax on WhatsApp users unleashed unprecedented mass popular protests in Lebanon that grew into demands for the ouster of corrupt and inept political leaders.

Over two years later, the leaders are still in power and the whole communications sector is on the verge of collapse.

The danger of Lebanon losing its Internet connection and being isolated from the outside world has catastrophic implications for the economy, society and security.

The worsening economic and financial crisis, severe power cuts, lack of funds and scarcity of foreign currency have significantly affected the country's Internet service, once the best in the region.

RELATED Lebanese end 2021 with more poverty, no holiday joy

Internet services started to deteriorate with the country's electricity crisis last summer, when the government decided to reduce subsidies on fuel, and the central bank was no longer able to provide hard currency for such imports. The country almost plunged in total darkness with severe power cuts reaching 22 hours a day.

Electricity outages continue with no solution in sight.

Ogero Telecom, the state-owned telecommunications company and Lebanon's sole Internet provider, began in June to experience similar outages, unable to secure enough diesel fuel to power its stations. The result was an unreliable, slow or lost Internet connection and prolonged disruptions, lasting for hours or sometimes a few days in the remote areas.

RELATED Depositors turn to courts to free money from Lebanese banks

"The main problem facing the communication sector today started with the electricity problem, but the whole economic situation is moving from one crisis to another," Imad Kreidieh, chairman and general director of Ogero, told UPI. "The risks are increasing day by day ... to reach a stage of total disconnection is a very dangerous thing."

Bills to pay

One major concern is to cover the dues of international providers supplying Lebanon with Internet and keeping it online.

"We have bills to pay for the international providers, some $6 million per year," Kreidieh said.

With dwindling foreign currency reserves, shortage of U.S. dollars and no budget yet approved, it is not known how cash-strapped Lebanon will cover such dues.

"The Internet is connecting the whole country, and the risk of disconnection affects all the sectors: the security services, airport, banks, central bank, medical and educational institutions and the judiciary," Kreidieh said. "It is crazy to reach the point where the telecommunication sector -- and so the Internet -- stop working."

Kreidieh said the company needs $100 million a year to keep the operations going. "That's not much compared to the services we are providing," he said.

He has been warning of the deteriorating conditions in his sector since June and "knocked on all doors" to secure international assistance, "but no one is willing to help."

Ogero revenues were on the rise before the country's worst financial crisis broke out in 2019, earning $450 million per year since 2017, with 70% profit margin, Kreidieh said. In 2021, revenues dropped to $34 million due to the collapse of the Lebanese pound, which lost more than 90% of its value in two years.

The pound slid from 1,500 LL to the U.S. dollar in 2019 to a record level of 33,000 LL earlier this week.

Ogero, which provides Internet to 1.2 million housing units and a large number of institutions, is still collecting subscriptions in Lebanese pounds at the rate of 1,500 LL.

Kreidieh said Ogero's 303 stations are still operating around the clock and any Internet outage or connectivity issue is being solved.

"It is not yet a big crisis. Those who are being affected by the Internet outages in any day do not exceed 3 or 4% for an average of 3 hours... this is by itself a miracle," he said.

However, he fears reaching a point at which spare parts, to be purchased in dollars from abroad, are needed.

'Cannot afford to be offline'

When the crisis started last summer, many businesses and institutions turned to private Internet companies for alternatives. Losing the Internet connection implicates big losses and would likely push them out of business or out of the country.

"They panicked and came asking for options, including a very costly satellite Internet access that could barely fit their requirements," said Gabriel Moubarak, group sales director at GlobalCom. "Those are companies, with businesses in the U.S. and Europe, that cannot afford to be offline."

Moubarak warned of companies' exodus, noting that a number of them have closed their businesses in Lebanon and relocated in Cyprus, Dubai, Egypt and Jordan, which are "more safe and secure."

"Any type of business is relying on the Internet but also the army, the security services, the government, the banking system, insurance companies, medical sector and airport," he told UPI. "Everybody will be affected."

Even those working online from home with companies abroad and securing "fresh U.S. dollars" are at risk.

One journalist had to travel to Dubai for 20 days to be able to work with a good Internet connection.

No Internet also means that people would not be able to connect, check on their kids or ask for help in a country where security incidents are frequent.

Corruption, political interference and bad decisions have contributed in bringing down a once profitable communication sector, said Amer Tabsh, a telecommunications and information technology consultant.

"This sector can bring billions of dollars to the treasury," Tabsh said. "Political interference is part of the problem... When they [the state] decided to run this sector after it was in the hands of international companies, we reached the point where we cannot even secure diesel fuel to keep it running."

While Kreidieh doesn't expect to reach a total Internet disconnection, as "no one will take the risk of starting the total collapse of the national economy," Tabsh warned that "all what's happening now is set to reach this point... It will collapse unless a miracle happens."