Fiji braces for competition

Dionisia Tabureguci
Knuckles are cracking in Fiji’s telecommunications market as Fiji’s incumbent telecom operators brace themselves for real competition. 

Last month, the Fiji government announced two major decisions concerning the industry.

It awarded Digicel Fiji its Public Cellular Mobile Telephone System provider license as well as finally put a date to the commencement of the Telecommunications Promulgation 2008.

“The Minister for Industry, Tourism, Trade and Communications, Tom Ricketts is pleased to announce the new Telecommunications Promulgation 2008 will commence on 1st August, 2008,” the interim government said in a statement.

“This will usher in the new Telecommunications Regulator and expand the role of the Commerce Commission on telecommunication matters.”

This means that starting this month, the new rule of play for Fiji’s telecommunications market comes into force, bringing about a bit more certainty in the industry.

“We are ready for it,” said Tomasi Vakatora, CEO of Amalgamated Telecom Holdings (ATH), one of Fiji’s biggest companies with assets of over F$400 million. 

ATH is listed on Fiji’s South Pacific Stock Exchange and is a conglomerate of incumbent carriers, being parent company of domestic carrier Telecom Fiji Ltd; owner of 51 percent of mobile carrier Vodafone Fiji Ltd; and manager of the Fiji government’s 51 percent shareholding in the country’s international carrier FINTEL (Fiji International Telecommunications Ltd).

“Yes, we will lose some customers when competition comes in but we will fight to defend our turf,” Vakatora told ISLANDS BUSINESS. 

Since the signing in January of a deed of settlement between government and telecom incumbent officials, prematurely ending the incumbents’ monopolies in return for long-term open licenses and a staggered approach to full liberalisation, telecom operators had been awaiting the go-ahead of the new promulgation.

“We had been pressuring government for this because there’s a lot of things hinging on it,” said Vakatora.

“The promulgation is an essential part of the settlement deed. Some parts of the deed came into effect immediately on the date of signing. But essentially the legal effect of the deed had to be made effective through a legal arrangement, which is this promulgation, so we are happy with this development.”

The deed schedules Fiji’s mobile telephony market to open up competition on October 1, 2008 and as such, Digicel Fiji can begin its operation come October. 

But a launch date had yet to be revealed by the company when this edition went to press.

While there are widespread speculations and curiosity over Digicel Fiji’s impact on Vodafone Fiji, ATH’s cash cow, the state of the industry so far is at least making some positive impact on ATH’s share price at the Fiji share market.

Since the conglomerate listed in 2002—where the Fiji public bought shares at F$1.06—the stock had spent most of its public life at between F$0.70 and F$1.

After four years of trading below its offer price, ATH finally made it back to F$1.06 last month, much to the relief of the company executives and the handful of institutions, including Fiji’s national pension fund, which had all bought ATH shares at that price.

“I think investors are now reading that we will still be able to maintain our market even with competition there and this confidence is being reflected at what’s happening at the stock market,” Vakatora said.

The coming into effect of the Telecommunications Promulgation 2008 is seen as a further boost to certainty at the share market.

Meanwhile, at the other end of town, FINTEL is obviously taking a more guarded approach, being a very new kid on the block in the domestic market.

Traditionally an exclusive international carrier and wholesaler of international telecom services to domestic service provider, Telecom Fiji, FINTEL had only recently entered the local retail scene through its fully owned ISP Kidanet. The deed allows it to also go into the mobile telephony business—an option it was seriously considering.

“As an interested party to the process that facilitated the liberalisation roadmap for the industry, FINTEL is currently preparing itself for the new competitive environment and hopes to be able to inject a refreshed impression to the Fiji market as a key stakeholder and contributor to the national development objectives of the country,” said FINTEL CEO Sakaraia Tuilakepa.

“FINTEL expects the new promulgation that provides the regulations for a competitive environment will be administered in the real and true spirit of the enabling infrastructure that will drive all the economic sectors of the country to new reform directions and hopefully better outcomes for all stakeholders.”

Previously bedfellows ATH and FINTEL now have a siamese-type relationship with the only thing holding them together being ATH’s rights to manage government’s shares in FINTEL.