OVER the last 12 months or so, Papua New Guinea has witnessed the best that competition can bring into an economy.
Papua New Guineans, these impoverished lot said to be living below the poverty line, were suddenly given the chance to communicate with each other and with the outside world at an affordable rate and from so many parts of the country, which was hitherto thought to be unreachable.
Impoverished or not, the people responded with such joyous enthusiasm and spent with such wild abandon that the growth in the telecommunication industry been nothing less than exponential, registering no less than 39%.
There were 7,700 customers to the B Mobile network in 2001. Today with the introduction of competition, there are said to be some 300,000 customers on the B Mobile network, an exponential increase by any language. The competitor, Digicel, is said to have 400,000 subscribers.
Digicel, the Irish company, which specialises in mobile communications in Caribbean nations, when it decided to break Telikom’s 46-year monopolistic control of the telecommunication sector, could little have realised that its entry into the market could have netted over 400,000 subscribers in the first year.
If this figure were correct, and if 400,000 subscribers to Digicel were each to buy only the cheapest promotional Coral 100 mobile phones at K49 each, which would amount to a staggering K19,600,000 in phone sales alone.
Of course, most subscribers would have chosen to buy phones at the upper end of the market so this amount could only be ever so much bigger.
And if 400,000 subscribers were each to buy one K3 Flex card (the cheapest available) per month, this would total K1.2 million per month and K14.4 million per annum. But of course, the amount would be treble or quadruple that amount because most subscribers spend much more per month on flex cards.
Remember that many subscribe to both B-Mobile and D-Mobile services.
Before the competition, B-Mobile sold some 10,000 handsets. Today it is difficult to keep an accurate count because so many outlets sell the handsets.
Subscribers, companies and the economy have gained from the competition. Mobile services were offered first in PNG in 1995 when Telikom introduced the old AMPS technology. This system has since been de-commissioned and replaced with the GSM system.
AMPS system is an analogue system which is not compatible with newer technology applications such as SMS.
Before Digicel entered the market, mobile phone charges were at an inhibitive K2.50 per minute. After competition, this rate is down to about K1.20 per minute.
Also SIM cards were sold for K125 before Digicel and now these are about K25 and minimum rates for pre-paid cards were K20 minimum but with competition has been lowered also to K3.
Employment has been positively impacted. Every job available with Digicel PNG is new. Telikom PNG has created an entirely new department called the “emerging technologies” division to meet competition.
Businesses have gained. There are those business houses which have rented out space to the two telecommunication companies to retail their wares. There are the young people on the streets selling phone cards.
There are those companies which are selling hand sets of a wide variety and those which design advertising and those media companies which run advertisement.
All round then, competition has been good.
The big question now, with the much awaited interconnectivity between B-Mobile and Digicel and it is hoped G-Mobile (the new Greencom) only a matter of days away, is: Will this be the moment of reckoning for Telikom? Will it suffer such tremendous loss of business that it will become unviable as a business concern?
Subscribers to one or both networks should be ecstatic, of course.
To my mind, Telikom can only gain as it has in the past year. Yes, one would want everything to be ready before competition is introduced but it has happened and Telikom has been thrown in at the deep end. It would be detrimental to go back now when Telikom has just begun to fight back.
Subscribers to B Mobile as well as Digicel have increased. What Telikom might be foregoing in terms of revenue now with separate systems, it could recoup with interconnection. Telikom will be earning extra revenue from traffic generated by Digicel. Telikom has a large network, which can transport or terminate calls from the Digicel network. The technical details, of course, I would expect are being finalised between the two companies.
In the mad rush of the mobile competition, very little has changed by way of quality of servicing or rates for fixed phone services. With interconnectivity and the likelihood that competing companies might set up their own fixed phone services, perhaps Telikom could have a good look at this now.
And Telikom can tackle this competition much better if it were left to compete as a company without support from politics because that is a very easy escape temptation, which does not help our statutory corporations from meeting international competition.
And despite what may be said, Telikom is meeting this competition remarkably well even while it might have lost all the court battles.
It would be a tragedy to take it back to a monopoly or to lend it political support when it has done so well alone.
There is much to be learnt from this episode and much that can be applied to all other protected and subsidised sectors, which have been costing taxpayers so much over the years.

IN the last days of 2007, former Solomon Islands attorney-general Julian Moti was arrested and put on a plane to Australia, to stand trial for child sex offences allegedly committed a decade ago.
His extradition, long-demanded by Australia, is being seen as a concerted attempt by the new prime minister Dr Derek Sikua, to repair the damage done to the Solomons’ relationship with Australia.
Dr Sikua’s predecessor Manasseh Sogavare had angered Australia over several issues before he was ousted in a vote of no-confidence in mid-last month.
Strengthening ties with neighbouring Australia is one way Dr Sikua hopes to help the country’s development.
But faced with lingering ethnic divisions and a struggling economy, will this be enough to enable the Solomons to enter a much-needed period of political and social stability?
The dispute over Moti’s extradition came to symbolise not only Sogavare’s somewhat belligerent approach to politics, but also the cronyism and elitism which analysts say has hampered the Solomons’ political development in the past.
Professor Hassall from the University of the South Pacific (USP) said the resolution of the issue was an important step towards addressing standards of governance in the South Pacific.
“There is a perception in the region that political leaders sometimes escape legal obligations,” he said.
“Any instance in which a high-profile political figure is brought before the law to answer charges ... helps to build confidence in the efficacy of law in the South Pacific.”
Sogavare’s support for Moti was a major factor in his downfall, leading to accusations by his parliamentary colleagues of bringing the country into disrepute.
According to Sinclair Dinnen, an expert in Pacific issues at the Australia National University, this objection to Sogavare’s actions showed that “the general public is no longer prepared to tolerate brazen corruption”.
“The public expect a quality of governance and the delivery of services that they feel they are entitled to,” he said.
One of the groups that is helping to improve the situation is the Regional Assistance Mission to the Solomon Islands (Ramsi), an Australian-dominated coalition of 15 Pacific countries.
It was originally deployed in 2003, when the actions of heavily-armed rebel groups threatened to devastate the Solomons, but has remained in the country ever since to help develop economic stability and infrastructure.
Sogavare made no attempt to hide his dislike of certain aspects of Ramsi, and his government accused Australia of acting like a regional bully.
But with new governments installed in both the Solomons and Australia, there will almost certainly be a fresh focus on Ramsi’s role in the future.
While many in the Solomons welcome the mission’s presence, others have concerns that it could lead to a dangerous culture of dependency.
“Continuing Australian interference in the Solomon Islands cannot be a good thing in the long run,” Sue Farran, an expert in Pacific islands law from Dundee University, said.
“As long as they are dependent on Ramsi, it will be difficult for them to move on independently”
With or without Ramsi’s assistance, Dr Sikua’s government has many enduring and deep-rooted problems to be resolved, not least that of tensions between rival ethnic groups.
Prof Hassall says that although there has been no overt internal conflict in recent years, “neither has there been a full resolution of the issues causing grievance in the country”.
Fundamental issues remain unaddressed, he said, including the right of Solomon Islanders to migrate to the wealthiest island, Guadalcanal.
Other provinces have seen little economic development and remain poor and isolated, with little mobility, either literal or social.
The lack of income has forced rural islanders to accept the advances of illegal logging companies, which have stripped some areas of valuable timber and devastated the landscape.
If Dr Sikua and his administration are to prevent a repeat of the ethnic violence of the past they must, say observers, tackle the uneven spread of resources and services.
The situation is far from bleak, though.
The Solomon Islands have many natural resources and a youthful population with which to manage them.
The handover of power from Sogavare to Dr Sikua happened without violence – a positive sign of future stability, although there are concerns that it was only Ramsi that kept the lid on unrest. – BBC