Libya gets new mobile phones

By Rana Jawad
BBC correspondent in Tripoli

Mobile phones remain a luxury for most Libyans

A new mobile phone network has been launched in Libya, bringing competition to the sector for the first time.

However, since the new company, Libyana, is state-owned like its rival, some critics question whether the competition will be genuine.

Although prices have already fallen from $3,300 in 1997 to $68 plus $410 deposit, this remains much higher than in neighbouring countries.

Mobile phones remain a luxury for most ordinary Libyans.

'Cheaper option'

The new mobile phone company is being marketed as a more sophisticated version of Al-Madar, which was, until now, Libya's only mobile network.

Libyana will initially cover the three major cities of Tripoli, Beghazi and Sebha and aims to extend its network throughout the country by 2005.

LIBYAN MOBILE PHONE COSTS 1997: $3,300/ line August 2004: $710/line September 2004: $478/line

The company's head and son of the country's leader, Mohamed Gaddafi, said the large deposit, which would be offset against call charges, was intended to prevent an initial surge of acquiring a mobile number, which may put too much pressure on the lines.

He indicated that the price would gradually decrease as the network expands in the coming years.

He also denied that the two state-owned companies would collude to keep prices high.

"We are already providing a cheaper option for Libyans and I have personally witnessed a sense of competitiveness between the staff of the companies, both of which are now aiming to provide a better service than the other," he said.

"This is healthy and will work to the benefit of the people."

Playing it safe

Until Libyana launched, a mobile phone connection with Al-Madar cost $710, which is still roughly four months wages for the average Libyan.

While the new lines will be sold for $478 dollars, this is still much higher than elsewhere in the region, where they can be bought for as little as $20 dollars.

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So why not allow other international mobile companies to operate their networks in Libya?

Mohamed Gaddafi answered that question before it was even asked.

"Foreign mobile network companies can invest millions in establishing their companies here," he said.

"But the reality is that within a few years they will generate billions in profit, which will be taken abroad. This would be counter-productive to our economy.

"At least the profits generated by Al-Madar and Libyana will be invested in future projects aimed at developing our telecommunications sector and improving the lives of Libyans."

The reality of the situation is that a lot of investment is needed to improve the current state of the country's telecommunications sector, in both mobile and land-line networks due to the rise in demand and the existing underdeveloped infrastructure.

Libya is playing it safe by maintaining a monopoly in ownership but utilizing foreign technology and know-how.

It says that it has the financial capacity to fund its projects.