Issues emerging in merger process

Business

By CLARISSA MOI
THE merger of bmobile and Telikom into a single retail operator is expected to be completed by December or early next year, Kumul Telikom Holdings Ltd (KTHL) acting chairman Reuben Kautu says.
He said the National Executive Council (NEC) had approved the merger as part of KTHL’s reform agenda.
However, he said legal, corporate governance, technical and commercial areas were yet to be completed.
Kautu said the process commenced in 2018 when bmobile was relocated to the Telikom Rumana Building with Telikom, however there were a number of issues that were impacting swift transition.
“There are also a number of dependencies that need to be overcome before the actual merges into a single entity, namely around legal and corporate governance but several areas around the technical and commercial fronts have now been progressed and are subject to certain approvals,” Kautu said.
“Hence, if everything goes well as planned, we are expecting the technical and commercial merger to be completed by December this year.
“Thereafter the legal and corporate governance could then commence and it is also subject to third party consent so timing of this will only be ascertained when we consult these third parties.
“We are now seeking approval as part of the normal State-owned enterprises compliance processes to implement the technical and commercial merger of these two entities.
“We are anticipating the decision by end of this month if not early next month from the NEC,” he said.
Kautu said the merger would reposition PNG DataCo as the wholesale carrier so KTH would have a wholesale business of which would eventually own all the network infrastructure and a retail company (Telikom-bmobile merger) with a mobile, fixed line and internet service provider businesses.
“The reforms undertaken will take us into the NetCo model that has been pushed at the moment as a condition of funding but at KTH we are focused on stabilising our entities and merging them to reposition into profitability enabling us to compete at the retail level before the end outcome of the reforms towards a NetCo model starts to kick in.”
While commenting on the new mobile network operator that would be rolling out its services soon, Kautu said: “We have an open market policy for competition in the telecommunications market and so we welcome the new mobile operator and seek opportunities to collaborate with them to serve better and add value to our customers.”