Businesses in Lebanon take hit as costly Internet blackout lingers

A picture shows the communication and Internet antennas of one of Lebanon's leading internet and mobile connection providers in Beirut on July 5, 2012. (AFP PHOTO/JOSEPH EID)

BEIRUT: Lebanon’s Internet blackout continued to disrupt businesses across the country Thursday.

The blackout was linked to a break in the IMEWE cable – a submarine fiber-optic cable linking Lebanon to international capacities – 50 kilometers off the coast of the northern Egyptian city of Alexandria, according to the Telecoms Ministry.

Seven other countries were reportedly affected by the outage.

The ministry added that it was working with the authorities in Egypt and Cyprus, in coordination with Ogero, the state-run land-line operator, to rectify the situation by linking Lebanon to Cyprus’ submarine Internet cables – ALEXANDROS and CADMOS – via the existing cable infrastructure.

But the ministry said this temporary solution was unlikely to restore normal Internet speed and capacity.

The blackout marks the second of the week following three hours of down time Monday and comes at a time when the productivity of local industries is already being negatively affected by increased power rationing.

“The Internet is a major player in business, everything is related to the Internet,” said Eddie Issa – managing director of Insight Solutions, an IT consultancy firm based in Beirut. “If people are unable to access emails, use applications, check information online or access Internet banking then businesses can’t function effectively.”

Issa also pointed out that while other countries were affected by the severed IMEWE cable, their backup solutions were far more proficient than those in Lebanon.

This sentiment was echoed by Telecommunications Minister Nicholas Sehnaoui, who highlighted that Lebanon was one of few nations that rely on only a single submarine cable for Internet connectivity.

“The lack of a redundant route makes the country completely vulnerable to such blackouts.”

Maroun Chammas, chairman of IDM, a leading private Internet provider, told The Daily Star that international Internet capacity available to Lebanon had dropped to 3 gigabytes per second, down from some 13 gb/s, before the IMEWE failure. “This is having a disastrous impact on the business and service we can offer customers.”

Chammas added that negotiations, currently being undertaken by the Telecoms Ministry, could yield renting up to 8 gb/s of capacity from Cyprus.

This could shore up capacity to 11 gb/s later Thursday, but Chammas suggested that an effective long-term solution to the problem could be found if the government allowed the private sector to become more involved in developing the sector. “The private sector would be even ready to invest in additional submarine cables to improve redundancy,” he said.

Other companies in Lebanon have also felt the heat.

“We are an online company. When the Internet goes down it badly affects us,” said Mohammad Saadi – general manager of online retailer Marka VIP.

“When we can’t use the Internet, we can’t get any orders, and this is what we rely on to make a profit. In the time since the Internet cut off, we would usually have between 10 and 20 orders, instead we have had none.”

Saadi expressed a sense of relief that the Lebanese market accounts for a mere 5 percent of the company’s sales and correspondingly overall losses were relatively small. Other Internet based companies are less fortunate.

“We have been strongly affected,” explained Sophia Sakr of Scoop City, a website offering discounted deals throughout Lebanon. “From a basic point of view I can’t even get on the website, so customers can’t either.”

Sakr said that the number of people visiting the website had been cut by half since the blackout began Wednesday evening.

Speaking Thursday afternoon, she said the Internet speed remained too slow for her to access the media-heavy website, noting that the combination of Internet and electricity cuts posed somewhat of a double blow to the business.

“Even in normal circumstances things can be difficult. The Internet is slow but sufficient, but when you factor power cuts into the equation it becomes difficult,” she said. “For example, there might be an electricity outage as someone is making a payment online – the bank might register it but the payment doesn’t go through our system. This causes inconvenience for everyone.”

Issa argued that the current crisis merely shines a spotlight on Lebanon’s obsolete Internet infrastructure, which continues to rely centrally on HDSL and DSL networks that are unable to support the evolution of the Internet.

At a time when the Lebanese government is keen to promote the virtues of Lebanon, and Beirut in particular, as a cosmopolitan business hub within the region, the inadequacy of the available Internet services stand out like a sore thumb.

Issa pointed out that while the quality of the internet for the domestic market was poor, it was at least affordable. In contrast, in the commercial sector, the cost of renting an exclusive Internet connection is quite expensive.

“For a company to rent a capacity of 10 megabytes per second exclusively, it will cost them around $6,000 a month. In Europe you would get 2 or 3 gb/s for the same amount of money,” says Issa. “This is extortion. In Saudi Arabia, the United Arab Emirates and Jordan they are almost handing out Internet for free.”

In a 2011 survey conducted by bandwidth testing site, Lebanon ranked 186th out of 186 countries in terms of Internet speed below Vanuata, Gabon and Cameroon while a World Bank survey from the same year estimated that Lebanon loses 1.4 percent growth in GDP each year due to the absence of fast Internet. This loss is estimated at $420 million annually.

A version of this article appeared in the print edition of The Daily Star on July 06, 2012, on page 1.




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