Libya has launched a second mobile phone network, introducing the first taste of competition to incumbent El Madar Telephone Company. The newcomer, which will operate under the banner Libyana, will initially cover the cities of Tripoli, Beghazi and Sebha, with plans to expand to further cities in 2005. The government claims that Libyana is a more sophisticated version of El Madar, offering cheaper services to customers – USD478 for a mobile phone connection compared to Al Madar’s USD710 –although this is still much higher than other countries in the region where the cost stands at as little as USD20. Because both operators are state-owned, however, cynics have already begun to suggest that the competition in the market will not be genuine.
Former monopoly operator El Madar, which provides services under the Orbit Telecom brand name, launched services over its GSM-900 network in November 1996, having been awarded a licence covering the costal zone of Zuwarah, Tripoli and Al Uarabutti earlier that year, and having contracted Ericsson to roll out the network in a deal worth around USD45 million. In August 2002 the cellco signed a deal with Alcatel to expand the network to the area around Surt and increase capacity by 100,000 lines, and in June 2004 it signed another deal with Ericsson to increase coverage further and improve network quality. Its expansion programme is likely to continue following the entrance of Libyana as it works to hold on to its customers. At the end of June 2004 there were an estimated 120,000 mobile customers in Libya.