Libyana: Largest Mobile Operator in Libya

Interview with Salah Ibrahim Mokhtar, CEO of Libyana

Could you give us an overall assessment of the ICT sector in Libya in 2013 and also tell us about the outlook for this sector in terms of growth and new projects?

I am happy to be here today to share this information with you. I will start by talking about Libyana and go on to talk about the telecom sector itself. As you mentioned, we are focusing our strategy on improving the ICT services for the country. We are a big part of that. As you well know Libya requires a lot of work to rebuild every sector. This will lead us to bring in many foreign companies to start their businesses and establish their companies here, and we all know you can’t do business without telecom, especially data services. This is something that Libya lacks at the moment, it needs a great deal of improvement and so we are really focusing on this now. At Libyana we have already started a big project, called the network modernisation project. It will offer HSBA service to the subscriber and which allows high speed internet connections. We will also bring LTE sites into the main hotspot areas. Also within this project we will fix the bad service quality issues in terms of voice and other issues with the basic services. This is a huge project, we have been planning this since last august and we have started preparations. We have already sent out our offer to the main companies, and soon we will begin to implement the new network.

What is the size of the investment for this project?

It will be an investment of around 200 million Libyan dinars. We have already done the business case for the project and we already have the offers. The investment will be in this area, from 150 to 200 million dinars or a little more.

Libyana is the largest operator in the country. Can you share with us some of the key figures, in terms of your subscriber base, the services you offer, the prices you have etc. what is the added value making you different?

In terms of prices we offer the same prices as the other operator in Libya, as you know this is controlled by the regulator. We hold the advantage that we recovered the network very quickly after the revolution and also we are concentrating on opening more sales points even in the furthest cities in the south, in order to have more subscribers. We offer our service to the small villages; to which it is not easy to make telecom connections. We go to some villages even in the Fezzan region as this is part of our company’s social responsibility. We have a license from the regulator to offer the service to all areas no matter how many people are there. Also even before the revolution we had the biggest market share compared to the other telecom operator. Now especially in the third and fourth quarter of 2012 and in the first quarter of 2013 we are improving and our share is increasing every day. Not only have we recovered the service but the cash flow from the Libyan people is now more so they are able to spend more in the telecom sector. One small example is that they have started to give student allowances to university students and we take a big segment of this as the telecom sector. Our market share is around 72 to 73% of the whole market, data and voice. The number of active subscribers that we have reached this year more than 4 million active subscribers, this never happened before not even before the revolution. There is the opportunity to add more sites and to increase the number of subscribers as we implement this new project, you will be amazed by the increase in subscribers especially in terms of data. Currently people cannot connect to the internet easily, especially outside of the main cities.

Can you tell us more about the data services, 3G etc.?

We already offer the 3G service in the main cites, and we want to have HSBA for all subscribers. We are targeting big customers such as the oil and health sector, particularly the oil sector that has a campus in the dessert so would benefit from these kinds of services. As I mentioned we will start a trial project for LTE services in the hotspot areas.

Is the LTE something that will develop relatively quickly in Libya in your opinion?

Yes, it is a new technology, most of the countries that surround Libya have not started offering this technology, but developed countries like Korea, Japan and the US already have this technology in place and many European operators are using this also.

Do you see mobile data being a dominant factor in the market or do you see the prevalence of fibre optics and the traditional adsl internet services?

If I take the case of Libya, I see it as a dominant factor because we don’t have the infrastructure for fibre optics or the connection cables. So the best and fastest solution to offer these services to the subscribers is through mobile operators.

Can you offer some figures regarding this, what is the potential of the data market?

We expect to have 12.5% of our revenue in the first year come from data and in the second year we expect to reach 30%. Even for the some of the most developed countries this is a good number. If we look at Saudi Arabia, as it has some similarities to Libya, they are now reaching 25% of revenue from data.

What are the biggest challenges you are facing at the moment?

The main challenge we are facing at the moment has to do with human resources, and how we can prepare our staff for this technology and services. We need to work hard to increase the capability of our staff, to ensure they know how to prepare and offer our clients the products and services that are part of the new network. This is our biggest challenge.  We have taken action on this front, we have started some consultancy projects to get them ready and we have started a new functions area dedicated to this kind of thing. We have a big project called Go to Market, this project is to ensure our network will be ready and that our staff will be able to offer the products and services that this network can handle.

This is the main challenge we face, the capability and skills of our staff. We do have another plan for this, we will begin some inter-management projects, and we will bring some expertise in to work with us so that we can shadow them and then the best candidates will take over after a year and a half to lead these tasks.

Regarding competition; since the prices are set there is no real competition, the two telecom operators belong to the same holding company which belongs to the Ministry of Communications and you actively contribute to the Ministry of Finance and so the profits are restricted from the people, what sort of situation is this? Is there competition?

There is competition, not a lot but it is in how we will take the biggest slice of the market at the end of the day over the other company. As you mentioned the prices are the same but there are many ways you can be attractive in order to bring in new subscribers. The new services that we are going to offer are going to bring in new subscribers for example. However, it will not stay like this in Libya. Now the Minister and the holding company are planning to restructure the telecom sector to create competition, because competition means bringing the best service to the end user and this is how we should work. We have to focus on the end user and on ensuring they are satisfied with the telecom service. I know that this is the plan and so soon these changes will occur.

There is another thing that the Ministry is working on concerning the telecom law. Once this is ready it will allow the country to have a third operator and to bring in a foreign investment company. This will mean real competition and so we need to start preparing for this now. There is not much time as this will happen soon. The top management at Libyana has taken action, we mentioned that 2013 is the ‘free and relaxed’ year for us in terms of competition but in terms of work it is not so. We need to prepare ourselves because there is not much time. I am sure the third license will happen soon.

We talked to the Minister about privatisation; there are no immediate plans for the privatisation of the two major operators however there are plans to bring in another one to increase the competition in the market and to slowly liberalise the sector. There are plans to restructure the existing players and maybe in two years’ time to offer them some sort of arrangement through the stock exchange, but the government necessarily want to…

They are taking the right decision; you cannot go from a centralised government with state run companies to privatisation directly, you would face too many problems. You have to concentrate on how to take a small area and give it to the small companies and they will start to grow. You have to bring in outside knowledge to build up credibility and the ability to offer these services. A step by step approach is the right action. Even here at Libyana this is our plan, we will try to improve local and small companies, bringing small services first. We need these companies to get ready and improve their knowledge. With this strategy you can offer good quality services. We will try to outsource as much as we can.

Talking about foreign investors and investment into the telecom sector, do you feel there is a lot of interest or do you feel the contrary; that there is low interest since Libya does not currently have a good reputation abroad and that there is a lot of insecurity on behalf of investors and companies that want to do business here?

Yes, I feel there is an interest. I can tell you frankly that the telecom business is easy money with high growth and profit. Libya is not as insecure in comparison to other high risk countries; we are stable and improving every day. There are countries that are more insecure than Libya and they have foreign investment. I believe there is an interest. However, how the government and the Ministry of Communications view this and their strategy is another matter. From my point of view, I would not easily give the third license to a foreign company or investors outside of the country. I believe there are many other ways of quickly increasing the capability of your staff and therefore keeping the investment within the country as it is a great deal of money we are talking about. I would prefer to keep this sector free from foreign investors but to have foreign investment in other sectors that need a lot of capital and work. This is my personal view. The top management of Libyana has to prepare itself for competition. When this will happen? We do not know yet.

What is your approach towards the corporate social responsibility?

We carry out many activities regarding social responsibility. We have sponsored many national teams, and many national events. We help in many ways that will benefit the people directly, particularly with education. This year we plan to help more on this front, we will take on the responsibility of installing new technology in the main university; we will start on that as soon as we get our new vendors for this project. We plan on making graduates ready for the market as soon as they finish university. Normally companies need to put in a lot of training for those graduates that are straight out of university. Together with the other operator and the Ministry of Communications we are planning on starting the telecom academy in Libya. Furthermore, I mentioned already that we connect even the most remote villages to the internet, we do not get any revenue from this but it is our responsibility to get every single Libyan connected to the network as this is our slogan: we connect everyone.