| Cover Report/ PNG: MOBILE WAR TAKES PNG BY STORM |
Customers are all smiles from competition
Baeau Tai & Dionisia Tabureguci
It’s war! So says PNG Telikom in its August newsletter put out on the eve of a new government and early days of new digital GSM mobile service provider Digicel PNG in the market.
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Consumers benefit... children like Tessie (left) and Ricky (right), now have mobiles as a result of the mobile war which has made mobiles affordable. Photo: Baeau Tai
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As if it was almost a sacrilege to mention the name of ‘the competition’, PNG Telikom’s board of directors told staff plainly that “competition is here, that the old habits of behaviour must change, and that Telikom is engaged in a war with an opponent who might play by different rules”.
“Welcome to the real world of competition,” said board director Albert Veratau.
“Realise that we are not the only people now supplying PNG customers with digital telephone services.
“Our customers have a choice and if we fail to provide good, reliable, low cost mobile services, expect those customers to leave us.
“And with those customers go your job and mine. The old days are over, and the old ways must be over too. Don’t come crying that Digicel is not playing by the rules.
“Expect them to be ruthless business competitors, and believe that you too must be extra-effective when you compete for customers. I am not saying that Telikom needs to be unethical, but let’s get tough on the competition,” the newsletter quoted Veratau as saying.
Indeed Digicel’s trademark aggressive play is now beating down upon PNG like a super-speed tropical cyclone that observers believe would reinvent the communication and business landscape in this million people market.
Subsequent to the launch of Digicel, PNG was gripped by a “mobile frenzy” where grannies, papas, mammas and even betel-nut sellers braved the long queue at a nearby mobile booth to buy a new mobile phone.
Both companies immediately launched a marketing warfare through the various media outlets and suddenly, Papua New Guineans were enjoying cheaper mobiles and communication costs.
“Buy a Motorola C113 for K99 and get one free—plus a free SIM card and free calling.
“Swap your B-Mobile SIM Card for a free Digicel SIM card and get K20 credit for free.” These were some of Digicel PNG’s special promotions.
The Telikom PNG camp retaliated and offered its 280,000 nationwide customers a Nokia 1110i mobile phone and a B-Mobile SIM card for K99, with a startup kit for K25 and a K10 free call credits.
By mid-August, the Digicel-PNG Telikom rivalry had escalated to an almost nationwide throb of live local rock band performances, promotional banners and price slash offerings never before seen or experienced in PNG.
“It was obvious yesterday that new entrant Digicel scored big in Goroka by selling all its popular branded handsets and SIM cards within the first two hours after it was launched here,” wrote a local daily newspaper The National.
“Digicel outlets like Bintangor Trading, Papindo Trading and others were jammed with anxious customers who wanted to get hold of a handset and get connected to the network.
“Store employees had worked around the clock to order more stocks after initial stocks were gobbled up by excited customers. One of the Digicel outlets easily disposed of its handsets worth K60,000 within two hours.
“In Madang town, the noise of the two telcos’ sales campaign drive left the whole town smiling as they compared which of the two was making the best offer,” the newspaper reported.
Amid the frenzy, the PNG government has had to resort to questionable moves to protect its wholly-owned telecom company.
In July, its National Executive Council (NEC) went back on a decision it made in 2005, which had seen it issue Digicel PNG and another company, GreenCom, mobile licences.
NEC then directed the Minister for Public Enterprises, Information and Development, Arthur Somare, to revert to it an implementation plan and schedule of the implementation of the amended ICT policy.
The amended ICT policy is to see the restructure of Telikom PNG into a NetCo/ServCo model, therefore will split the company into two entities.
NetCo will own all telecommunication infrastructure in PNG and supply wholesale services to competing retailers (ServCos).
ServCo will provide services to retail customers through the infrastructure owned by NetCo.
This decision to amend the ICT policy has not gone down well with the business community and the general public, and has prompted the Port Moresby Chamber of Commerce and Industry (POMCCI) to issue a statement, calling on the government to develop a consistent policy for its telecom industry.
POMCCI president Dave Conn said the policy should be seen as effective and consistent and should improve communication across the nation at affordable rates and be highly attractive to foreign investors.
“The government needs to be consistent in its policy to foreign investors in the telco industry. The proposed revocation of the mobile licences sends a very poor signal to the investment community,” Conn said.
PNG’s business community supported the calls made by POMCCI and, in a statement, expressed concern at the restructure of PNG Telikom.
Signed by key executives who represented peak industry bodies in PNG, including the PNG Chamber of Mines and Petroleum, PNG Business Council, Transparency International and Manufacturers Council of PNG, the statement highlighted critical issues they believe must be addressed through vigorous and continued discussion with the business community, who are well placed to provide “expert input”.
Some concerns raised were:
• Splitting PNG’s ineffective telecommunications environment (technology and industry culture) into a NetCo/Servco model has been challenged in recent expert reviews;
• A NetCo model must be very carefully constructed and constituted to avoid creating just another form of Telikom that lacks accountability and commercial independence;
• Access to the spectrum would be restricted to NetCo, as the owner and operator of all telecommunications infrastructure, and;
• Question of how a NetCo, operating as a recast wholesale monopoly, better address the telecommunication needs of the country.
The business community had serious reservations on how a NetCo model might be created in such a short time, particularly amid the legislative drafting necessary to implement a NetCo/ServCo model, an impending civil claims and actions from frustrated mobile licensees.
Meanwhile, PNG Telikom has taken to court the matter relating to the awarding of mobile licences to Digicel and GreenCom and while this is happening, talks on interconnection between the incumbent and Digicel are reported to have begun in PNG.
If approved, it will allow Digicel mobiles to talk to B-Mobile phones and vice versa, which at the moment is not possible.
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