KTHL keen for new digital era

The National Business

KUMUL Telikom Holdings Ltd (KTHL) is poised to rise again by the end of this year as the Coral Sea cable is connected, says managing director Paul Hyde.
That will usher in a new era for the company, which has been dogged by the poor performance of its State-owned enterprises (SOEs) such as bmobile, DataCo PNG and Telikom PNG (TPNG) as well as several TPNG information and communication technology (ICT) subsidiaries.
Internet prices are set to go down by as much as 80 per cent, according to Deloittes Australia, once the Coral Sea cable is opened.
Hyde told the recent leaders’ summit that telecommunications in the country was about to enter a new era that would help shape the future of this country.
“By the end of this financial year of 2019, the Coral Sea cable will make landfall on the shores of Papua New Guinea,” he said.
“It will rise out of the sea and will be connected to the onshore communication that we will call high capacity network.
“I have worked in Telecoms for over 30 years. I have seen this industry develop.
“PNG is about to have the keys to the doors of the 21st Century.
“We can build an information-based society and an economy.”
Hyde said KTHL companies had consolidated, however, lack of underlying direction meant benefits were yet to be realised.
He said by creating KTHL, the Government had sent a strong signal that it was time for the ICT sector to perform.
Hyde said it was a call to telecommunications SOEs to fulfil their obligations to the public and economy, as a spark of change and an enabler of enrichment and prosperity.
The business has been divided into retail and wholesale elements.
The goal is to create an entity that will become Papua New Guinea’s national carrier, at the forefront of delivering affordable and reliable service.
Hyde said lot of the SOEs had liquidity and debt collection problems.
“Of course, people do not simply like paying their phone bills,” he said.
“Within Telikom, we recognise that we have good revenue, but the operating cost of the business is too high.
“That is mainly associated with operating the networks and this has to be reduced.
“The simple fact of the matter is that in the fixed line industry, the chances of getting significant revenue and customer growth are limited. Bmobile have not really been removed since the introduction of Digicel in the market.
“It struggle to finds ways to monetise wireless networks and growth.
“DataCo, a relative newcomer, rose as the international subsea cable carrier.
“Until the domestic cable and Coral Sea (cable) are commissioned, DataCo’s main source of revenue remains a very small satellite business.
“At the moment, it is a small proportion of what we are doing.
“This is a work in progress, however, the underlying problems of the business have been further exposed due to the sudden shift in strategy.
“Telikom chose a wireless growth strategy that the consolidation disrupted, exposing the underlying weakness of all fixed line operators – high cost and limited growth.
“BMobile are distressed and lack the resources to monetise the 4G asset.
“DataCo’s wholesale customers are limited in number.
“Growth will begin with the domestic cable and Coral Sea 2 deployments.”
Hyde said the KTH SOEs suffered from:

  • Excessively high maintenance costs of multiple legacy networks;
  • a flawed procurement process;
  • legacy organisation and culture;
  • dependence upon vendors to run and maintain the network;
  • poor cost control of capital projects;
  • poor commercial capability;
  • underinvestment in staff competence; and,
  • Capability.
    KTHL’s five-point plan will roll financial year 2018 tasks into 2019, which will remain the year of fight back and the start of growth.
    The plan is:
  • Utilise and develop human resources to drive high performance;
  • establish KTHL to enable the group to reduce costs, compete with Digicel and become self- sustaining;
  • focus upon the customers and generate revenue;
  • rehabilitate and build core infrastructure that delivers affordable, reliable service; and
  • More investment and innovation to join the pieces of the KTH jigsaw puzzle.