Although genuine demonstrations of "people power" are rare in Libya, customers of state-owned mobile company Libyana are standing up for their consumer rights. Unhappy with the poor network and high tariffs, they collectively arranged to "boycott" their service provider by switching off their mobile phones for a day.
The network is set to improve as Libyana's partners, Nokia and Alcatel, signed a deal worth 200 million to develop the network to an eventual capacity of 2.5 million phone lines. China's ZTE is also involved, and just prior to the boycott had signed a contract pledging to provide full technical support to Libyana for three years.
At present, 186,000 Libyans subscribe to Libyana. In the longer term, it looks likely that the network issues will be sorted out and that the area of coverage will expand from Tripoli, Benghazi, and Sebha to the rest of Libya. The original plan was for this to be completed by the end of this year, although it might take slightly longer in view of the inevitable bureaucratic and technical barriers.
The price issue will be harder to resolve. A study by the Arab Advisors Group in March revealed that Libya has the most expensive cellular connection fees in the Arab world and the highest post-paid minute rates. Subscription to Libyana, made available when sales began in September 2004, cost LD91 (approximately US$68) plus a very hefty deposit of US$410.
Although this is somewhat cheaper than the fee charged by Libya's other state-owned mobile company, Madar (US$710 as at August 2004), it is still a very expensive outlay for most Libyans, many of whom are struggling with low or unpaid salaries.
When Libyana was launched, it was suggested that the two state-owned companies would collude to keep prices high, although the Ministry of Post and Telecommunications promised that prices would drop as the network expands. At the time of Libyana's launch, the ministry was headed by "Engineer Mohammed," Muammar Qadhafi's son by his first marriage, who has now been given a wider communications and information-gathering role (see Libya Focus, April 2005, p.5). The recent protest is therefore an implicit criticism of the regime and its failure to distribute Libya's oil wealth fairly among ordinary cash-strapped Libyans.
The boycott also represents something of a reality check for foreign companies entering the Libyan market, where consumers are simply not wealthy enough to afford market rates for many products.
© Menas Associates 2005
