Norfolk islanders go mobile, issue of free local landline calls stick out

By Dionisia Tabureguci

Norfolk Island, a self-governing island territory of Australia and among the least inhabited in Oceania, is the latest island in the region to go mobile.

What’s the reception like? Norfolk boy tests out the country’s new mobile service.

Its sole telecommunications provider Norfolk Telecom rolled out the first phase of its GSM mobile service early this year, and while it scheduled phase two for mid-2007, it has a problem in its hands: the company also offers free local landline telephone calls that inhabitants have long enjoyed.

And it now wants this reviewed, a request the Norfolk Government is not likely to agree to.

“With the introduction of mobile and time-based charges, the call rates for fixed services now need to be reviewed,” said Norfolk Telecom manager, Kim Davies in an interview with ISLANDS BUSINESS.

“Currently, the people of Norfolk Island enjoy free local (landline) calls and this is impacting on the possible revenues that can be gained from the mobile market. Users tend to lean towards the free land-based network wherever possible, thus redirecting traffic that could have been achieved should there be a call charge for local landline calls implemented.”

This dilemma has obviously put the island’s government in a difficult position, with the word being that while it considers the position of Norfolk Telecom, to put charges on local landline calls would become a politically sensitive issue. 

The Norfolk government fully owns Norfolk Telecom.

“The Minister responsible for Communications has stated publicly that local call charges are under review but that is as far as it has gone,” said Davies. 

The island country, located east of the Australian mainland and described as being “the Pacific’s best kept secret” by its tourism authority, is home to a little over 1800 people, mostly descendants of mutineers upon the HMS Bounty of the Captain Cook fame in the late 1700s. 

The early settlers had originally settled on Pitcairn Island, an atoll island miles across the Pacific Ocean and located between French Polynesia and Easter Island.

In 1856, 194 people from Pitcairn (Bounty mutineers, their Tahitian wives and children) arrived on Norfolk after a 3700-mile journey from Pitcairn. 

Their descendants today make up majority of the population of Norfolk Island.

Thriving on tourism, fisheries and agriculture, the islanders have more landline telephones than the population.

International telecommunication services, via radio links, began on Norfolk Island in 1972 and the number that locals had to dial in order to connect overseas was 2007. This number would again mark an historic event for the country’s telecommunications business with the launch of the GSM mobile service this year. 

Although the landline call issue remained pending, the take-up of the new service has been described as “phenomenal”.

By last month, some 600 subscribers had already signed on for new starter packs, said Davies, and the company was expecting more new GSM customers.

Phase Two of the roll-out would see the availability of roaming and post-paid services for the inhabitants of Norfolk.

Meanwhile, not far away across the Pacific, the region’s largest and resource-rich island country of Papua New Guinea was also grappling with GSM issues of its own.

Incumbent carrier PNG Telikom faced stiff competition from GSM king, Digicel, who had amassed 20,000 customers during its first three days of business.

The dream start hit the rocks however when PNG’s telecom regulator revoked Digicel’s license, clearly a move to protect the fully government-owned PNG Telikom.

While providing breathing space to what looks like a soon-to-be-restructured incumbent, Digicel didn’t take it lying down and last month filed a court injunction against the government’s decision. 

But PNG Telikom is forging ahead despite uncertainty at political level.

Acting CEO Peter Loko told ISLANDS BUSINESS the company will implement government’s instructions, whatever that may be.

“In any case, it (legal wrangle between Digicel and government arms) doesn’t change anything in terms of our preparation for competition. We still have to continue with our programmes,” Loko said.

PNG Telikom introduced digital GSM to the PNG market in 2003 and last month hit the 190,000-subscriber mark, according to Loko.

“With competition, this scenario will change greatly. The pie may get bigger,” he said.

Digicel, on the other hand, has proved to be quite a force in the Pacific with its known financial might and its plans to establish a Pacific-wide GSM network, presenting telecom incumbents in the region with an unprecedented challenge. 

With such a pan-Pacific network coverage and a promise to give Pacific islanders “seamless roaming services with not just Australia and New Zealand but also the United States and Europe, besides other Pacific Islands states”, Digicel would position itself to be in direct competition with all incumbent carriers in the Pacific region.

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Renamed bank to help rural people

Papua New Guinea’s newest bank, the government-owned National Development Bank, has promised to serve the needs of ordinary Papua New Guineans.

Sir Michael Somare... doing the honours.

The bank was launched in Madang last month by Prime Minister Grand Chief Sir Michael Somare while on the campaign trail for his National Alliance party candidates for the national elections.

Formerly known as the Rural Development Bank, the institution has been in existence since 1967. However, after 40 years the government has decided to reform and rename it under the National Development Bank Act 2007 which was passed in April this year.

Somare told the people the Act was necessary to prevent political interference in the operation of the bank.

The Prime Minister’s concern is shared by many in the country who have witnessed how corrupt political decisions have undermined the operations of most of the state-owned enterprises. The former Rural Development Bank has also been bankrupt three times in the past 40 years because of political interference and had to be bailed out by the state each time.

“This means the Act has been put in place to eradicate the influence of political cronies in the board and management of the bank, paving the way for a more improved financial and operative performance,” Somare said.

He said the Act also eliminates any appointment of political cronies to the board leaving the management of the organisation to the fit, proper and extremely competent people to run.

The government also hopes the bank will offer banking services to the ordinary villagers who are currently facing difficulties getting services from the commercial banks in the country.

Somare said it was almost impossible for simple villagers to open an account with the existing commercial banks. They need letters of identification from community leaders and authorities to be able to do business with the banks. This has prevented many of the country’s rural population from benefitting from the services of the commercial banks.

Somare told the people the new bank will be like the former government-owned PNG Banking Corporation which has since been bought out by Bank South Pacific and privatised under the Morauta Government six years ago.

To demonstrate its commitment to villagers, the executives of the new bank publicly signed a fishery credit scheme between the local RD Tuna Canners, National Development Bank, and the Madang Provincial Government. Under the credit scheme, money will be loaned to local fishermen to start small fishery projects using pump boats supplied by RD Tuna canners. A similar project was launched in Morobe province recently.

While the project brings renewed hopes for the local fishermen to engage in small scale income-earning businesses, the spectre of the recently failed European Union fishery project remains fresh in the minds of the local people.

Under similar arrangements four years ago, motor boats were supplied to local fishermen around Madang to start small scale commercial fishing ventures. The project has since failed.

The new bank is also involved in the government’s Smallholder Agriculture Credit introduced in 1997 with the allocation of K10 million through the Department of Agriculture and Livestock to establish a Smallholder Agriculture Credit Scheme.

From 1999 to 2000, the bank made arrangements with members of Parliament to establish District Credit Schemes to assist people in the electorates at the district level.

One such scheme is the Rai Coast District Credit Scheme in Madang which was implemented in 2000 followed by the Huon Gulf Credit Scheme in Morobe province.

The schemes were implemented with a seed capital of K200,000 each from the Joint District Planning and Budget Priorities Committees which gave the opportunity for people to get credit from the bank.  The bank also has a Special Projects Scheme which has been operating for more than 20 years designed to help Papua New Guineans to own trade stores and participate in the retail sector.

The bank has had a mixed performance throughout the last 40 years. It was declared insolvent three times due to bad loans which resulted in large debts it could not service. During the launch, Somare announced a K100 million recapitalisation package for the bank.

The Managing Director of the Bank Richard Maru believes the biggest beneficiary of the bank will be the ordinary people in urban and rural PNG. He plans to secure a micro-finance license soon to offer passbooks and other savings and loans products to the ordinary citizens through the banks 17 branches throughout the country.

While the people in Madang have applauded the government for addressing the problem of access to banking services for the villagers, many remain skeptical about its success. Government-owned and run institutions like the former PNG Banking Corporation have had poor records and have been a burden to governments that have had to continuously fund them.

Former Prime Minister Sir Mekere Morauta in 2000 tried to address the problem through his privatisation programme by removing political influence and strengthening regulations governing the institutions.

His privatisation programme was discontinued by the Somare Government when it came into power in 2002.

— By Patrick Matbob