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Digicel/Telekom war far from over
Solomon Islands’ telecommunications monopoly—Telekom—has won the first round of the competition battle against global mobile phone operator, Digicel.
Digicel’s expansion into the South Pacific has been temporarily halted in the Solomon Islands with the country’s high court issuing an injunction blocking Digicel from setting up shop.
But Telekom’s general manager Martin Robinson is convinced the legal battle will continue.
“The matter will not rest here I’m absolutely sure of that. I understand the legal people representing Digicel will be filing for further action to address the matter of competition,” says Robinson.
Competition is coming, it’s just a matter of how and when, says the head of one Solomon Islands’ largest companies.
The injunction blocks Digicel, which has faced similar obstacles in Fiji and the region from setting up until the high court has ruled on the exclusivity of Telekom’s license with the government.
Telekom, whose shareholding is 64.7 percent National Provident Fund, 2.68 percent Investment Corporation Solomon Islands and 32.58 percent UK’s Cable and Wireless, was granted a 15-year exclusive licence by the government’s telecommunication regulator in 2003.
But within months of taking office in mid-2006 the new Sogavare Government announced its intention to remove Telekom’s monopoly followed by the granting of an experimental licence to Digicel.
The government’s justification is that the Solomon Islands constitution does not allow a monopoly of any kind.
Telekom launched a legal action in October and three months later the court ruled that Digicel Solomon Islands is not a registered company and thus its licence is invalid and therefore cannot operate in the country.The court also blocked the telecommunications authority from issuing new licences to Digicel or its other associated companies.
Robinson says Telekom is comfortable with competition as long as it is done openly and on a level playing field.
“The last attempt by Digicel and government was behind our backs and was done with no consultation.”
According to Telekom’s licence, government has the right to review its exclusivity in 2008.
Robinson says things have to be done properly and on the table.
“We’re quite happy to discuss it,” he says.
He says the first thing needed is a proper Telecommunications Act as well as an independent regulator and open dialogue with the government.
For the first time in its existence, Telekom is now relying on public opinion to secure its future.
Its source of salvation is that the company’s majority shareholder is the National Provident Fund whose 60,000 plus members are ordinary working folk in the Solomons.
The downside, though is that not many Solomon Islanders know that Telekom is a locally-owned company.
To rectify this, Telekom has undergone a corporate identity change to identify itself with its local shareholders.
“If Digicel comes, it has only one shareholder only Mr Denis O’Brien, an Irishman. I believe, he will take out close to 100 percent of its profits. For Telekom, there are 60,000 people that will benefit.”
The bottom-line, says Robinson, is that over 60 percent of its profits stay in the country.
Robinson admits that competition will drive prices down ‘drastically’ which will be great for the consumers—but for him it’s the other effects that worry him.
“In a competitive environment, there is no obligation to work in an area where there will be losses,” says Robinson.
With competitors battling it out for the profitable urban centres, he says the rural areas will suffer.
To counter this, Telekom is calling on the government to create a rural development fund to top up the costs of operating in loss-making rural areas.
—Evan Wasuka
Islands images on Japanese mobiles
Japan’s mobile phone boom has been partly blamed for sluggish expenditure on international travel. The need to be cool and connected in Tokyo has resulted in average annual expenditure on mobile phones around JPY100,000 (US$900) cutting heavily into disposable income usually directed at overseas holidays. South Pacific Tourism Organisation (SPTO) has turned the challenge into an opportunity.
Japanese will soon be sharing stunning digital images of scenes of the South Pacific with their friends. A tie-up with Tokyo’s Stargate Network will enable customers of the company to download images for use as screensavers on their all-important hand-helds.
SPTO’s chief executive Tony Everitt noted that “20th century-style expensive advertising in traditional media is losing effectiveness in our sophisticated Northern Hemisphere markets. The battlefield for destination awareness is now in digital media—the internet, blogs, skype, mobile phones, etc. We are delighted that this tie-up with Stargate enables us to cost-effectively put our message in front of our target market.”
Govt to buy king’s power company
The Tongan Government is expected to raise funds to buy the Shoreline Power company from the island kingdom monarch after overseas investors pulled out of the negotiations, a Radio New Zealand International report said. Shoreline was given on a long-term lease to the Crown Prince, now King Siaosi Tupou V, eight years ago.
But after ascending to the throne last year, he wanted to sell the business for about US$46 million to the government. The government was planning to buy it from him and re-sell it, but the major overseas investor, New Zealand’s Northpower company, pulled out saying it cannot continue the sales process after the November riot.
Revise ROO for ACP countries: Kaputin
Rules of Origin (ROO) under the Cotonou Agreement have prevented African, Caribbean and Pacific States (ACP) from making use of preferences offered under the agreement, European Commission (EC) was told this week.
Speaking at the 5th session of the group of experts on ROO in Brussels, ACP secretary-general, Sir John Kaputin (pictured) said special attention should be made to make the rules applicable to all parties involved in the proposed Economic Partnership Agreement (EPA), now negotiated between the EC and the ACP group.
“The multiplication of regional trade agreements, as well as the gradual liberalisation of international trade, require the rules of origin to be revised so as to adapt them to the changes in the international trade arena. Kaputin urged the EC to harmonise the rules of origin for all the six ACP regions, including the Pacific. ACP countries are in the final phase of negotiations with the European Commission on a new economic partnership agreement, which is expected to come into force in January next year. With only 11 months to go, the Pacific negotiations have been delayed with the removal from office in December last year of Kaliopate Tavola, former Fiji foreign affairs minister, who was the region’s chief negotiator. Tavola’s government was ousted by a military takeover.
Taiwan funds Marshalls’ plane
The Taiwan government has again come to the aid of another Northern Pacific country, It is funding the purchase of a plane for the Marshall Islands’ domestic airline. Marianas Variety reported that Taiwan Ambassador to the Marshall Islands Lien-Gene Chen delivered a US$2 million cheque to the government to be used by Air Marshall Islands to buy a Dash-8 aircraft from a United States-based leasing firm. This is Taiwan’s second aircraft purchase for its Pacific allies. Last year, Taiwan funded the purchase of a Boeing 737 for Nauru so it could resume jet service to remote islands in the central Pacific after an Air Nauru-leased Boeing 737 was repossessed in December 2005.
Connect’s new product a winner
Connect has a launched a new product that is causing a stir amongst Fiji’s online consumers. Called MobileNet, it gives Connect customers a truly mobile experience. The drawcard is the price of the service—F$29 a month—which is inclusive of a palm size modem. While it is slower than broadband and has the same speed as dial-up, Connect argues it has the edge in having a nationwide coverage—it can connect wherever Telecom Fiji’s EasyTel telephones can be used. Sharon Smith-Johns, Connect’s chief executive says: “Even if you don’t have access to a telephone or even electricity, you can be online and in touch from almost anywhere in Fiji”.
Taiwan dry-dock gets go-ahead
A controversial US$18 million Taiwan floating dry-dock received its environmental approval from the Marshall Islands Environmental Protection Authority despite strong community opposition. Marianas Variety reported that there has been outspoken public opposition to the plan since it was first proposed in mid-2004 by Ching Fu Shipbuilding Co. of Taiwan. In June 2005, the Marshall Islands’ EPA rejected Ching Fu’s preferred site in the middle of the urban centre of Majuro, the capital of the Marshall Islands. But earlier last month, EPA said Ching Fu had satisfied changes sought by the environmental agency and gave the go-ahead for the dry-dock in a new location about two miles from the rejected site. Ching Fu’s officials say Majuro’s strategic location near the tuna fishing grounds makes it ideal for a fishing boat repair operation.
Cooks’ NZ$237m development
The Cook Islands government’s ambitious plans for the development of infrastructure over the next 20 years will cost NZ$237.5 million (US$165.2 million), a Cook Islands Times report said. The figures based on details were revealed during the launch of a national Preventative Infrastructure Master Plan at the National Auditorium in Rarotonga.
This is the second of seven components that together make up a grand plan produced with the help of the Asian Development Bank. Their aim is to strengthen disaster management and mitigation. The grand plan was developed following the five damaging cyclones which hit the country in 2005. The Preventative Infrastructure Master Plan component includes: NZ$31 million (US$21 million) developing airports; NZ$62.6 million on ports; NZ$50.8 million on roads; NZ$23.5 million on water supply; NZ$44.8 million on energy; and NZ$11 million on sewage. NZ$55.2 million was planned to be spent over the first five years. Meanwhile, Telecom Cook Islands would spend hundreds of thousands of dollars upgrading its mobile phone network to overcome congestion.
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