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French Version

Alfa chief takes on Lebanon's telecom challenge

Ineke botter finds allure in beirut's fabled joie de vivre
Dutch national attributes her optimism to the successful performance of the company

She is one of the most powerful businesswomen in Lebanon. And yet, Ineke Botter, head of Alfa - one of two new companies managing the lucrative Lebanese mobile sector - is Dutch.

With a resume boasting top international positions - including a prominent stint with Orange in Switzerland, and a high-level telecom post with the United Nations in Kosovo, one may wonder why Lebanon; and what this relatively small market may have to offer her.

For one, working in Beirut is "easier" than Pristina, she says with a laugh.

"What I like here, up to now, is that it is very friendly, it's not in a malicious way," she explains. "I've worked in situations where politics were very malicious and you had to be very careful all the time. I don't mind politics," she adds, "but it is more pleasant when it is human. So this is one difference, especially from my last project."

For Botter, the allure is partly based on the fabled joie de vivre of Lebanese society, especially the ease of making contacts and arranging meetings. In the West, an interview with the media may have taken up to two months to schedule, she says with a hearty laugh.

"It's much more personal here and I like that, because I'm not too formal," she says.

Then again, the controversial situation Botter adopted in Lebanon goes far beyond the notion of Lebanese hospitality and cultural niceties.

Cellular phone bills are among the highest in the world here, and the sector is rife with tales of fraud, mismanagement and political meddling on a scale of scandalous proportions. Lebanese consumers shut off their phones several times last year to express their fury over government tariffs which have made dialing Lebanon from overseas sometimes cheaper then placing a call from one street in Beirut to another.

The saga of Lebanon's cell phone sector - which remains state-owned, inefficient and overpriced - involves a complex set of events and actors including sectarian politics, the suffocating $35 billion public debt, and the behavior of the highest-level government officials and their private business interests.

Botter started off in the cut throat financial hub of Europe in the City of London.

A lawyer by training, she is almost the archetypal 1980's career person, single and highly motivated. Botter's introduction to the telecommunications sector came in 1991 when she joined the fledgling telecom network Ukrainain Mobile Comm. Between times, she has worked throughout Eastern Europe, Sweden and in her home country.

When Botter took on her new job at Alfa, which is partly owned by Saudi investors and a subsidiary of Deutsche Telekom, over half the network staff resigned in favor of generous state-brokered indemnities. In addition to a mass exodus of personnel, Botter was also faced with a billing system that dates back to the early 1990s, when government first signed BOT - build, operate, transfer - agreements with previous operators LibanCell and Cellis. Nevertheless, she says the transition went through without a glitch.

"If you run a company on half force, this is a major achievement," she said. "The staff have worked very hard to make sure this happened."

However the introduction of Alfa has so far meant very little to the country's cash strapped consumers and businesses. Lebanese still pay astronomical rates for mobile calls - up to nearly $2 for a three minute local phone conversation - and are billed by the unit (equivalent to 45 seconds or a minute) instead of by the second.

Because the government failed to privatize the sector, a move that was expected to both lower prices and help finance the $35 billion public debt - Botter's firm, along with Kuwait-based Mobile Telecommunications Company, were hired to manage the mobile sector on behalf of the state under four year contracts that took effect last June.

At the time, personal battles between the country's top two leaders somehow prevented the government from creating the free-market environment that consumers and business had hoped for. Instead, all mobile revenues, and thus real power over sector growth and development will remain with the state.

The good news - at least for the government - is that operations-management fees have been reduced by 30 percent with the departure of LibanCell and Cellis, both of which incidentally enjoyed close ties to local politicians.

Still Botter is almost chipper in her determination. "Every project has its own challenge, she says firmly. "We are in a GSM environment; it is difficult to put it on a rating scale."

Naturally, she brushes off the politicking that came before she took up the post last year. And of course the government, not Alpha, is solely responsible for high mobile rates. But public skepticism continues to surround the sector and all that it represents.

Last year, some officials criticized the amount of public money allocated for "re-branding" the networks (at least $10 million) from LibanCell and Cellis to Alfa and MTC Touch. Other analysts have charged that consumers have been side-lined in the deal with the two new companies, saying the monthly operating fees paid by the government (roughly $4 million to each firm) act as a disincentive to improve the quality and spectrum of services, not to mention the rates.

Botter says a confidentiality agreement prevents her from speaking about the re-branding budget or any monetary incentive offered by the state to improve services. However, she maintains that government's recent investments in the sector was money well spent, and says that Alfa intends to work diligently on its share of the sector, and introduce innovations in areas like data services.

"On an operational level, this company is doing very well that's the reason for my optimism," she says. "I cannot judge other people's optimism but I'm very happy with the results we have up to now, in operational terms."

Beirut,02 21 2005
Habib Battah
The Daily Star
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