Dionisia Tabureguci
Negotiations are underway between the Niue government, its telecommunications company and a Chinese company on a possible joint venture for the provision of GSM mobile service to the country.

Managing Director of Telecom Niue Richard Hipa confirmed to ISLANDS BUSINESS the current negotiation is centred around the shareholding structure of the venture and if talks fall in Niue’s favour, the joint venture will be the chosen model for Niue’s mobile telephony business.

“At the moment, we are looking at the proposal from the standpoint that we need to confirm some information with the vendor, including the costing.

“The shareholding percentage is also one of the things we are looking at and we are negotiating this with the Chinese company. We would like the control, the operation and management to be kept within Niue,” said Hipa.
Telecom Niue had advertised internationally last year for interested parties for the replacement of its analogue mobile telephone system and received five tenders and a few expressions of interest.

“We had some setback with the funding of the project because the allocation from government intended for the project is part of the NZAID NZ$20 million aid funding to our government and which could not be accessed because the GSM project did not fit the criteria set by the donor. 

“Out of that NZ$20 million, the government had allocated NZ$1.8 million for the GSM upgrade, which would have been enough, but then, we didn’t qualify because aid funding doesn’t support revenue generating undertakings like this,” Hipa said. 

“We did have a range of bidders who came with very good proposals and some came up with a financial package but our difficulty with the funding bit had put us in a difficult position. 

“Besides, the revenue that we generated in the last three years has gone to the government to help with the rehabilitation work after Cyclone Heta (in 2004), and if we were to take out a loan, it would put more pressure on our cash flow,” Hipa said.

“So due to our inability now to access the NZAID fund because we didn’t fit the criteria, we had to go back and look at the joint venture proposal. We are currently negotiating for a majority shareholding in it.

“We welcome the interest from the Chinese but we also believe the business and management of the business should remain in and with Niue.”

The proposal from the Chinese is attractive enough for Telecom Niue and if the government gives the green light, Hipa said the Chinese will replace the old monologue system with the GSM network as well as upgrade the company’s landline systems and move them all to IP-based.

If Niue fails to secure what it wants or close to what it wants from the negotiations and government refuses the figures given by the Chinese company, then it will have to explore other proposals.

“At this point, we are still in a position to decide whether or not to accept their offer and that decision is going to be made by government.

“My hope is that a decision is reached as soon as possible so we can get on with the project,” Hipa said.

With the installation of the new mobile system, Telecom Niue will be able to provide its customers with services not currently available.

These include pre-pay services, using SIM cards, text messages services and voice mail, with roaming being one of the other value added services considered for the future.

There are hopes to have the mobile network operational before the Pacific Islands Forum Heads of Government meeting in Tonga in October.