General Post & Telecoms Co Tripoli - Libya

General Post & Telecoms CoTripoli - Libya Prepared By: Eng. Khalifa N. Maayof Mr. Mahmud Ben Musa Regional Work-Shop on Strategic HR Management Cairo – Egypt 13-17 April, 2008 A Summary of a Case Study G.P.T.C Undergoing Reforms

Index Subject PART A: INTRODUCTION AND METHODOLOGY PART B: CAPITALIZATION OBJECTIVES AND STRATEGY PART C: THE CAPITALIZATION PROCESS PART D: Execution Mechanism MAIN RESULTS

PART A: INTRODUCTION AND METHODOLOGY • In Libya as in many other developing countries, privatization has been generally linked to unemployment. This link responds to the fact that many state owned companies are considerably overstaffed, and during the reform process labor commonly needs to be downsized. • In a growing number of cases across countries, rationalization programs have provoked mounting opposition amongst workers that ultimately became a major obstacle in promoting and realizing private sector participation, especially in infrastructure sectors.

The General Post & Telecommunications Company (GPTC) is a case in point. Since its inception as state owned company, the company was operating with an idea of providing services to all sectors in Libya regardless of garneting profits or suffering a loss as such thing was never considered. • Recently, the newly established company holdings started the division program, an initial step to Capitalization Program an alternative way to traditional privatization, involving the major activities of company. Under this innovative approach, the holdings will supervise and monitor all companies created such Transmission, Fixed Lines, and International Services, where all companies will work as a private operators, and shall be responsible in front of the holding on yearly financial statements that should show the profit/loss of its activity. This approach served to mitigate the level of redundancies when the whole sector was privatized.

PART B: CAPITALIZATION OBJECTIVES AND STRATEGY In 2007 a Capitalization policy was introduced as part of the required reforms, and included The objectives: • Restructure the whole company sectors allowing the introduction of private operation, and paving the way to private ownership and management of the company • Reducing high level interference in all functions of the company. • Designing a wages policy that is in an alignment with efforts made, and according to real livelihood. • Enabling the company to attract skills, and retain existing ones. • Ensuring the best possible environment for equal opportunities all staff.

PART C: THE CAPITALIZATION PROCESS Capitalization of GPTC involved the creation of 3 separate companies, or rather 4 companies as the fourth one was the Mail Company which is considered as a wholly separate matter to telecommunication services, and however, up to now the mail shall be one of the companies that report to the holding. Each of the newly created company shall work independently from one another, and each shall be accountable financially to services rendered to it by any company.

The capitalization process included the steps: • Assessment of book value according to international accounting standards; • Review current workforce, and consider necessary divisions as per skills; • Assigning capital to each company that will use freely to promote its activities. • Prepare the company both financially and administrational for Public offering of a share option package for workers; • Slowly put necessary policy that will enable the participation of a private sectors (Outsiders).

PART D: Execution Mechanism The execution mechanism included the following main steps: • Complete study of the company labor situation; • Labor Productivity; • Wage and Benefit Structure; • Reserving the rights of employees; • Complete transparency; • Provide many options; • Reorganizing existing chart; • Provide some incentives to those with the low skills to leave the company; • Provide alternatives for early retirements;

MAIN RESULTS Capitals injected to the companies were subject to a capitalization contract that defined period of time to execute the total committed objectives, such as using the lowest possible percentage for operating expenses with the rest to be spent in ideas that will generate revenue. Companies only started working in January 2008 and shall be re-evaluated by the year ending 31 December 2008, the main results that should show up on the date of re- evaluation are:-

Finding a strategy that minimizes lay-offs, however reduction of staff is a most; • Reduction services tariffs in line with international standards; • Organize a well qualified team works; • Reducing costs, and finding way to generate profit; • Increase of labor productivity; This is only a summery of the overall project of reform taking place at GPTC that will end up as stated to allowing the whole sector to be fully privatized by year ending 2011. Eng. Khalifa N. Maayof Director of Training Dept Mr. Mahmud Ben Musa Director of HR Dept

General Post & Telecoms Co Tripoli - Libya