“Here in Libya, we call our main telecoms operator the ‘nasaf company’,” says the secretary of an international oil company working in the country.

Nasaf, which in Arabic means “we are sorry”, is how the automatic error message begins when your call fails to connect. “Never believe them when they say the number does not exist, the person is not avail-able or the phone is out of reach of the network, just try again a few more times,” she says.

Libya’s 800,000 fixed lines suffer from the lack of maintenance that is endemic in the country, and therefore do not always work properly. However, the fixed-line network is superior to that of most other African countries. In fact, telecoms is one of Libya’s most dynamic industries, and a major source of equipment deals for foreign companies including Alcatel, Siemens, Ericsson and Nokia. However, there remains little opportunity for foreign companies to participate in the sector beyond these supply deals.

Monopoly industry

The industry has traditionally depended on one monopoly player, state-owned General Posts & Telecommunications company (GPTC), headed for years by Mohammed Gaddafi, the eldest son of the Libyan leader. Since September 2007, the firm has been streamlined into one holding company: Libyan Post, Communication & Information Technology Company (LPTIC).

LPTIC manages the fixed-line network and owns part of the two recently privatised mobile phone operators, El-Madar Telephone Company and Libyana, as well as internet provider Libyan Telecom Technology (LTT).

Mobile telephony has expanded rapidly in Libya, particularly since Chinese company ZTE was awarded a $40m contract in January 2004 to install a new 600,000-line mobile network, to be run by Libyana. “Prepaid cards suddenly became affordable, at the price of only LD5 [$2.59],” says the secretary.

Libyana also launched another project in September 2004 with Alcatel and Nokia, to expand capacity to 2.5 million lines, covering Tripoli, Benghazi and Sebha. This growth has pushed El-Madar into reducing prices in a bid to catch up.

“El-Madar’s network was built by Ericsson and Alcatel, and started in the eastern region,” a French diplomat tells MEED. “It was specifically meant for companies with a range of sophisticated services. Prepaid subscriptions used to cost up to LD1,000.”

Today, the number of mobile phone subscribers has expanded to more than 3 million, for a population of less than of 5.5 million. El-Madar and Libyana were partially privatised in 2007, but in an unusual way: recently established Libyan public investment vehicle the Economic & Social Development Fund (ESDF) bought them, leaving 30 per cent to LPTIC and giving 25 per cent to poor Libyan families in the form of equities. Another part was placed on the new Libyan Stock Exchange.

“Telecoms operators will not go to foreign investors yet,” says Mohammed Siala, deputy minister of foreign liaison. “We want to go further than the 30 per cent privatisation of the two mobile operators in a second phase. But we also looked at the market reaction, which was slow. Some people believe there is a lack of trust; others that the savings are low in Libya because salaries are low.”

Rival operators

But there is another operator offering a different service. “I prefer to use Thuraya,” says Abdallah Omran, a Tuareg sheep dealer from Sebha. “It is more expensive but always works, even in the desert.”

Thuraya Satellite Communications Company, based in Dubai, sold a 5 per cent stake to GPTC in 1997 and was given the right to launch satellite services, which started in 2004.

Investment is also being made in Libya’s internet service networks. Oil revenues are enabling modernisation and expansion. In October 2006, France’s Alcatel was awarded a E98m ($145m) contract to install 4,000 kilometres of fibre-optic cable, connecting cities in the eastern parts of the country, while Italy’s Sirti won the E68m contract for 3,200km in the west. Both are due to be completed by April.

Libya also invests in telecoms technology deals outside the country. Rascom-1 satellite was launched in December by joint venture company Arianespace, and will enable landlocked African villages to access telephone, internet, and radio and television broadcasts.

“Many African countries participated in the capital of Rascom but Libya took the majority - more than 60 per cent,” Gaddafi’s head of cabinet, Bachir Salah, tells MEED.

Market penetration is rocketing in the mobile sector, while the fixed-line network will shortly reach 2 million lines.

Given the booming construction industry, there are set to be more properties and more lines, so prospects for the industry are prom-ising. But letting contracts to private foreign operators is still not on the agenda.

Key facts

• Regulator: Libyan Post, Communication & Information Technology Company (LPTIC)

*2006 figures.

Sources: BuddeComm; International Telecommunication Union; Economic section of the French Embassy.