New rates for interconnection

THE Independent Consumer and Competition Commission (ICCC) is drafting a decision on the wholesale mobile termination rates for interconnection between Telikom PNG Ltd and mobile phone companies bemobile and Digicel (PNG) Ltd.
ICCC’s arbitration review was due in June, a year after it set the interim rates in June last year.
The current interim rates were believed to have an “imbalanced regime” on the network favouring Digicel than bemobile and Telikom.
This meant more calls were being made from Telikom’s fixed telephone lines to Digicel phones and so Telikom was paying substantial amounts of money to Digicel for the calls made.
A Digicel spokesperson said this was because it had wider network as it had invested about K1 billion in the past two years in rolling out its network.
“The imbalance is really due to the scale of the rollout and, hence, a lot more people call from Telikom to Digicel simply because they can.”
He said ICCC arbitration should take into consideration the different mobile networks.
“Bemobile’s stance is that we would like to see mobile termination rates reduced to be in line with international best practices,” a bemobile spokesperson said, adding common global trend now were for mobile rates to be reduced and the last arbitration was based on bench mark of countries like PNG and the use of cost Modelling to determine what rate should be.
“So we really believe the new rate should be based on like markets … because of the economic advantages of the country.
“It promotes competition, which then reduces call costs and just allows the whole economics of the country to grow,” bemobile said.
ICCC officers also said on anonymity that the process involved looking at submissions and counter-submissions from the parties, and maintained the announcement would be made when it was ready.
Both bemobile and Digicel said they expected ICCC’s decision up to last Friday and the delay was causing uncertainty as to how soon the decision would be announced.
The uncertainty was worsened when the Phase 2 Review into the Information and Communications Technology (ICT) policy was not tabled in Parliament when it was scheduled for the July session.
The ICT policy was supposed to be implemented in December.
“There is no guarantee on the ICT policy,” an ICCC officer said, adding that since the policy had not made it as far as Parliament’s endorsement, next year’s National budget appropriation would not cover it.
Digicel and bemobile had made submissions and counter-submissions to the arbitration for consideration on the termination rates.
“We would like to see the market continue to develop and PNG has very low mobile penetration rates.
“One reason is high call costs, people are not able to make calls from mobiles and the only way to see that is if termination rates decrease.
“Its very uncertain and it’s a major issue for us because it does have such a large impact on where rates will go in the near future.
“And we’re really hopeful the ICCC will support the growth of telecommunications in the country,” bemobile said.