Mobile phone market threatened

EFFECTIVE competition in Papua New Guinea’s mobile telecommunications market could potentially be set back by years, following a ruling by the Independent Consumer and Competition Commission (ICCC) that set network-to-network interconnection rates at excessively high levels.
As bemobile launched an appeal against the ICCC ruling, chief executive officer Roger Blott said the proposed fees represented only a slight decrease on the previous rates set by the ICCC – despite international trends towards much lower rates.
The ICCC last Friday released a determination regarding mobile termination rates – the fees that mobile network operators pay one another in return for interconnecting mobile phone calls between their networks.
“All around the world we are seeing these kinds of charges decrease, in order to encourage greater competition and cheaper prices for mobile phone users,” Mr Blott said.
“Termination rates are only supposed to compensate network providers for the cost of handling incoming calls from other carriers – the rates announced today mean that phone users will continue to pay a high price for their calls to colleagues, friends and family.”
Mr Blott said for this reason, among others, they had appealed the ICCC’s decision, in the hope that these matters could be given more thorough investigation.
He said Digicel had been arguing for a continuation of high mobile termination rates, mainly because such fees helped Digicel pay for the continued development of  its network.
“Our own expansion plans are as extensive as Digicel’s, yet our cost calculations revealed a far lower actual cost for the provision of interconnection than they suggest,” Mr Blott said.
“Digicel currently has over 80% of the mobile telephone market in PNG, which puts them in a unique position to manipulate their retail pricing and take advantage of excessively high mobile termination rates.”
“Consumers in PNG should be aware of this risk, and I am surprised that the ICCC appeared not to have taken these factors into account in making this ruling,” he said.