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Business |
Overhaul of telco policy ‘in
order’
Digicel, GreenCom will be
at Telikom’s mercy under ICT Policy, says expert
By SHEILA LASIBORI
UNLESS the current
telecommunication policy of the Government is overhauled,
Digicel, Green Communication and other potential telco service
providers will be at the mercy of Government-owned Telikom PNG.
This was pointed out yesterday by Ogis Sanida, acting head of
Economics Studies at the National Research Institute (NR), at a
seminar discussing the effects of the Information Communication
Technology (ICT) to the local telco business.
Digicel is the second mobile phone company in the country while
GreenCom is expected to enter the sector shortly as the third
service provider.
Mr Sanida stressed that under the policy, Telikom would be split
into two entities – the NetCo and ServCo – which the Government
said “the most appropriate telecommunication model for Papua New
Guinea”.
Here, NetCo will be the sole owner/maintainer of the telco
infrastructure and wholesaler (monopolist), while ServCo will
make up the retailers/service providers that will include
Digicel, GreenCom and Telikom.
In short, Telikom, the owner of the infrastructure, will compete
with Digicel and GreenCom.
Telikom NetCo will also dictate on how much rate to charge the
users.
The Government’s main rationale for having this set up is “to
avoid infrastructure duplication (and maintain Government
control), and that competition will result in reliable,
efficient and cheaper telecommunication service,” Mr Sanida
said, quoting from ICT policy.
However, there were major issues of concern under the policy.
Mr Sanida said the performance of ServCo players and benefits to
end-users would be tied to the performance of NetCo represented
by Telikom.
It was stressed that because the rates being worked by the NetCo
telcos were to be dictated by Telikom ServCo, the telcos would
have a hard time bringing down their rates to make service more
affordable to the customers because it would be impossible for
them to go below what Telikom had set.
And if Telikom failed to improve or upgrade the technology, the
consumers will suffer directly because the NetCo telcos, under
the arrangement, cannot do any upgrading.
“For instance, if Telikom NetCo builds within a year and
maintains the network effectively thereafter, then no worries,”
Mr Sanida said.
However, if the problems (due to monopoly) that have plagued
Telikom PNG over the last 52 years persisted – that is failure
to do network upgrade, “then we have a big problem … hence,
ServCo telcos performance will be adversely affected.”
Mr Sanida also pointed out that Telikom NetCo has all the power
to favour Telikom ServCo to the detriment of competitors Digicel
and GreenCom.
In short, everything will be decided by Telikom whether it
involves the rates or the entry of new technology.
Mr Sanida said the policy was inadequate in addressing
interconnection issue where for consumers there would be wider
call destinations and origin of calls option to ‘hop’ between
networks increases competition and benefits.
He noted that service providers would increase call traffic and
sales (profitability), which would be good for B Mobile, Digicel
and GreenCom. “Interconnection improves communication for social
economic activities,” Mr Sanida said.
Because of this prospect, the ICT Policy must set clear
guidelines for interconnection among the networks, he said.
Mr Sanida had also strongly stressed that the revised ICT policy
“must allow for competition in both wholesale and retail
sectors”.
“The present crisis in the country’s mobile phone sector was
brought about by the lack of meaningful consultation between and
among the stakeholders, resulting in serious flaws in the
policy,” he said.
In fact, NRI director Dr Thomas Webster said NRI was never
consulted prior to the drafting of the ICT policy.
Dr Webster said on the issue of mobile phone licensing, under
the current arrangement, the Independent Consumer and
Competition Commission (ICCC) has the authority to issue and
revoke mobile licences.
This was provided under Telecommunication Act 1996 and
regulatory function (ICCC Act 2002), he said.
“Under the ICT Policy, the Minister for Public Enterprise
(Communications) has the final say.
“The rationale is to highlight regulatory role of ICCC,” Dr
Webster said.
“But ICCC is not just regulator … it is a promoter of
competition. Licensing power of ICCC was vital for its role as a
competition provider.
“Vesting final say with minister renders the process to
political interference. Even licensing committee may become a
‘rubber stamp’,” Dr Webster stressed.
 
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