SAKARAIA TUILAKEPA, Chief Executive Officer Fiji International Telecommunications Ltd

Dionisia Tabureguci

As Fiji counts down to the full deregulation of its telecommunication industry, its international carrier of over 100 years has gone domestic.

Starting late in the local game and from scratch with a wireless Internet network that is a little over a year old and covering only Fiji’s capital, Suva, Fiji International Telecommunications Ltd (FINTEL) is on a drive to stake out its share of the local market.

Following successful mediation talks last November and subsequent signing of a Deed of Settlement by Fiji’s three incumbent carriers and the government in January this year—in which a staggered approach to full competition was a condition—Fiji’s telecommunication market has begun to change.

For each carrier, a 15-year open licence and accompanying spectrum licences were major compensations for the early termination of their exclusive licenses.

For FINTEL, this has meant that the other two carriers, existing private operators and any new competitor would be free to bypass it for international connection, previously considered illegal.

The deed’s requirement that players who do opt for their own international access wait 18 months from the January signing has provided FINTEL with some breathing space in which to push coverage to other parts of Fiji. But as the deadline nears, its access to the Southern Cross Cable Network (SCCN)—the envy of many—is now its major playing card in a game that is increasingly becoming territorial.

Senior reporter DIONISIA TABUREGUCI spoke to FINTEL’s CEO, Sakaraia Tuilakepa, and his management team on some key issues the company faces.

FINTEL is now in the domestic market through its fully owned ISP Kidanet, how has it been going for the company?

“Ever since the market opened up in January, everybody has been working on overdrive gears. In terms of deregulation, that has been set in motion. I had said before that FINTEL is the most vulnerable, meaning that if the market had opened from Day One, FINTEL would not have any stronger footing to push. Because the consumer market has a loyalty to its primary market which is Telecom Fiji who is supplying connections to all of them and also to Vodafone, FINTEL most probably will not have a customer. So FINTEL has had to build capability and capacity in all facets of its operations, especially in our commercial and customer care sections. We need to be able to bring our strength up to par and aligned to market practices. The only consolation that we have at this point in time is that we have Kidanet and it has made an impression in the market in terms of capturing its share of the market. Although many might say it is the third largest ISP in the market at this point in time, key objectives and drive for Kidanet to become number one is strategic to that organisation and to us as well since we are its parent. But our primary goal since January is to go for what we call Channel Partners, which are the people already strong on the ground. Vodafone (Vodafone Fiji is Fiji’s mobile service provider) has around 450,000 customers, TFL (Telecom Fiji Ltd) has about 120,000 customers, so if we were to collaboratively work with them, then we can become channel partners and work on mutual goals. Unfortunately, I think the scenario of the environment has changed and so has the attitude of people. I think it would not be wrong for us now to think that it would be very difficult for us to get assistance if we want to sell something in the domestic market and we need a telephone line from the domestic provider. So we have to deal with this kind of thing on a daily basis and hopefully we will be able to strike some mutuality and then we can build and strengthen those particular relationships. That is FINTEL in the domestic market. In terms of international, our exposure to the international business is already there. It is a competitive market so even though we do not interface directly with domestic consumers, we have had exposure to the very competitive international market. But obviously, we have to build our capability. We have an NGN (Next Generation Network) on order already and we would like to be the first to provide that engine into Fiji to continue to strengthen our international and at the same time facilitate whatever local access network that we want to build. So these are some of the things that are happening. I think some of our executives now have their plates overflowing but that’s the challenge and I think for me, it is a very good thing because we are all locals and we discuss things locally. Hopefully, if competition is fully flexed after the expiry of the international gateway in the next 18 months, we will be in a position to be able to reasonably compete in the domestic market and offer people access to our networks and whatever services we have on offer.”

What is this NGN and what will it do?

“What we’re basically doing is just upgrading our network, replacing the voice gateway that we currently have where there is a separate line for voice and another for Internet going through. We are replacing them with just one line that can carry everything. So we might come to ISLANDS BUSINESS and ask if you want VoIP. If so, we can carry it because this line collects everything and takes it through. It does everything in that it converges what we usually do on three or four lines in just one line. Convergence, that’s the key word. And that is what FINTEL will be able to offer with NGN which will be available on wholesale international as well as domestic retail. Consumers will then have a choice on the type of service they want. But right now, since we only have 18 months, it’s how we get to the consumers that is the bottleneck at the moment. Do we build our own infrastructure? Do we lease if off the local domestic carrier? That is our challenge at the moment.”

Do you build your own?

“We are looking at building our infrastructure. But as I have said, we will use channel partners which is Vodafone, TFL and anyone else who is in the market. It makes sense for us to work with existing partners. Our concept is to localise the value and if there is business to make, then we will make the business and we will buy the services from that particular supplier. That’s localising the value. But if it is not available, then we will have to invest. So it makes sense for us in our new direction to have a network plan in place and what accesses we want to use. The mediums are secondary. Once you put a plan in place in consideration of what the consumer market is expecting, you research the evaluation and that helps you plan your path in terms of a network structure. And that network structure will then have to be fitted with the kind of technology purchase that you will do.”

Can you build a network in 18 months?

“It depends on what you want to do. I know building an infrastructure takes time and money. And you want to take advantage of time to market, so it depends on what you want to do. In some cases, wireless might be the way to go. But it has certain limits on what it can do, yes, but when you look at Suva, it is a small city and can be reached via wireless. If you want fibre, well fibre is already on the ground but it would depend on whether those who own it want to share it. I think the nature of the market now suggests that people are going to make sure they keep their market share. So it would be very difficult for us in the sense that strategically, channel partners are a primary option to look at. But if the partners who we are trying to procure the services from don’t want to collaborate, then I think we just can’t help it. The fact of the matter is that it is now a competitive environment, and if they want to pull themselves enough stakes to be the primary, then we will have to play second fiddle in that area. But that doesn’t mean we would just sit down. We need to explore other options.”

When the grace period of 18 months expires, other providers may connect internationally without going through FINTEL. Is that possible?

“No. They still have to come through FINTEL.”

But international access would have been open by then.

“Yes, but if they want to go through the Southern Cross, then there is a Landing Party Agreement (LPA) that FINTEL had with the Southern Cross Cable Network Limited (owners of SCCN) in 2000 where SCCN nominated FINTEL as its Landing Party Partner for as long as that landing (the SCCN cable landing in Vatuwaqa) exists.”

If someone like Digicel for example, who has a lot of money, wants to build its own landing, can it connect to the cable?

“No. It has to find another cable. Because if you do connect to SCCN, the consortium has to agree. Before the mediation (in Fiji, prior to official Deed of Settlement), what had been sold to the mediators is that the regulatory structure should disallow FINTEL’s authorisation to be the landing party. I had been speaking to the mediators and I told them no, you can’t do that. They asked why? I said because Southern Cross is obligated to that one. The minister at that point in time wrote to us wanting to do the same thing that you have just said—bypass us and go in and connect directly. And we responded to the minister but I think he couldn’t understand so Jo Turaganivalu (Fiji’s telecom regulator) came here and we explained and he went to the ministry and explained. During that process, I had to re-engage Southern Cross to confirm the LPA agreement that they signed with us in 2000. And because of security issues, protection of the network from sabotage and anything else, Vatuwaqa is listed under National Security as a Risk A Location and we have a responsibility to Fiji in that if anybody wants to sabotage that one, then we activate the Risk A Location Protocol.”

This is why people say FINTEL is hogging the gateway.

“It’s not hogging. It’s a commercial arrangement. We did a service for the country. We made an investment, I think right now it would be well above the 60-70 billion dollar mark. You see, the LPA gives FINTEL the authorisation. But we have obligations to observe. They (SCCN) have to come and check and observe compliance. Every year they do that. In some cases, they want to put in remote cameras so they can see Vatuwaqa from where they are.”

Some people blame FINTEL for the prices of Internet, which they think is high and is a deterrent in the effort to have universal access.

“Everybody is pointing to FINTEL but really, we’ve given much lower prices than what the Commerce Commission ruled. We have Kidanet and a second ISP has jumped over to us so the pricing must be right.”

FINTEL has tried in the past to bring other Pacific Islands countries on board the SCCN.

“Yes, we have made attempts to do other countries but we are not the only one supplying. Other countries have also been crying they want their cables. The means to come to Fiji is to come by satellite first. And if anybody wants to come by satellite into Fiji then go international, that is fine. What Fiji has been working through from a collaborative structure through the PITA (Pacific Islands Telecommunications Association) forum is to also try to put its services to that forum. We had Tonga and I think Tonga is still keen. But it’s just the mechanics on how you coordinate certain things. The others because of their long-term ties to Australia and New Zealand and I think they continue to use them. But we are following up on the expiry of their commitments as well.”

Can we say that your effort to get the Pacific on board has not been very successful?

“Yes and no. Yes it has been successful in that we have put people on trial in the past and it has been successful and we were able to put them on the Southern Cross. Now we most probably have to work stronger with them in order to do that and beat the opposition otherwise everybody goes and meet at one point. Traditionally over many years, New Zealand and Australia have always been the leaning position for all small islands countries including Fiji.

“It is very difficult for people to come out of those kind of relationships built over the years. Commercially, it is a decision that they will have to make. And if those decisions are going to be driven from a political structure, then it’s okay with the islands. Mind you, countries like Cook Islands, Niue, have a strong governmental leaning association with New Zealand and even Tuvalu for that matter.

“So you take that out of them, then they will most probably be thinking of what they might lose if they don’t associate with New Zealand. So it’s those kind of things. Now, if a body like the Pacific Islands Forum has resolutions in place that say okay, let’s work out a solution internally for us in the Pacific...but Australia and New Zealand are always in the Forum. So we’re the third country after Australia and New Zealand and we have to play at that level.

“But getting the islands on the cable is just a solution because it’s easy technically to connect them. Actually, coming here is a decision for individual countries and there are so many other factors that will influence that decision.”

The Southern Cross Cable has just undergone a major upgrade. What does this mean for us?

“The upgrade is going from 2.5 gigs (Gigabits per second) to 10 gigs and this means we now have four times more the capacity that we used to have on SCCN. It does not mean to say that FINTEL has got extra capacity. What it means is that there is more capacity now available and if FINTEL wants more capacity, it has to buy it.”