Come Thursday, we’ll know whether O’Brien’s background impressed the Naypyitaw government more than the stolid, faceless managers of China Mobile.
A woman waits for customers at a “public call office” in Yangon on May 27, 2012. Just a few million out of Myanmar’s 50-plus million population have mobile phones and access to an as-yet extremely limited system
The biggest and most colorful collection of telecommunications companies assembled in years is waiting for the decision bell to ring in Naypyitaw this week on one of the world’s last untapped mobile phone markets.
Twelve international telecom businesses and consortia are on a government shortlist, out of which only two will be awarded contracts to build networks for potentially more than 50 million new telephone customers.
The decision on Thursday will pave the way to propelling Myanmar into the 21st century, at least in telecommunications terms.
Just a few million out of Myanmar’s 50-plus million population have mobile phones and access to an as-yet extremely limited system.
After years of tightly restricted mobile phone ownership through extortionate prices, the government of President U Thein Sein wants wireless telecommunications to be available to up to 80 percent of the population by 2016.
Some of the world’s biggest telephone network companies and some of the most obscure are on the short list, whittled down from about 90 firms.
They are China Mobile Limited and Vodafone Group in a partnership; Singapore Telecommunications; Bharti Airtel of India; MTN from Dubai; the Irish-owned Digicel Group; KDDI Corporation of Japan; Sumitomo Corporation, also from Japan; Malaysia’s Axiata Group; Telenor of Norway; Millicom International Cellular of Luxembourg; Qatar Telecom; and Vietnam’s Viettel Group.
The world’s two biggest mobile phone service operators, China Mobile and Vodafone, have 1.14 billion subscribers globally between them. They have teamed up to make the most powerful bid.
But probably the most colorful is the joint venture put together by the small Digicel, which operates mostly among the small Caribbean islands, although it is owned by an entrepreneur from Ireland.
Digicel’s joint venture partners in the license bid are Quantum Strategic Partners, owned by American billionaire speculator George Soros, and Myanmar’s Yoma Strategic Holdings, owned by noted Rangoon businessman U Serge Pun.
“The challenge for the winners will be recovering the cost of building and maintaining mobile phone networks in one of Asia’s very poorest countries,” said an industry executive with a large Bangkok-based phone company who spoke on condition of anonymity.
“Burmese are just about the lowest paid people in the region and so although the price of SIM cards and phones has become more universally affordable in recent months, the unanswered question is how will these people pay for phone services?”
SIM card prices have plummeted dramatically from US $250 just over a year ago to a mere $1.70 today. But they are not yet widely available. About 350,000 cards were issued in April, many on a lottery basis, and similar numbers will be issued in the coming months.
Can the chosen network franchise holders recoup their investment?
“The opportunity is tremendous, but not without risk,” Nomura Securities’ chief of Asian telecoms Sachin Gupta told Bloomberg. “There are 60 million users potentially, but that needs a lot of network investment.”
Other foreign telecommunications companies are waiting in the wings to offer ancillary services once the network licenses are issued.
Avaya of the US, which specializes in video conferencing and data networking, has teamed up with local firm First Myanmar, which is also in U Serge Pun’s business stable.
“We believe that we are uniquely positioned to offer affordable first-class communications to the people of Myanmar and are looking forward to having the opportunity to do so,” Digicel owner Denis O’Brien told the Irish Independent, which he also owns.
Unlike some of the other bidders which have kept a profile as they quietly lobby behind the scenes to promote their credentials to government ministers and officials, Digicel has pursued a high-profile public image in support of their bid.
The Jamaica-based firm, ranked only 65th in customer size in the global telecoms market, has been sponsoring Myanmar sport, promoting brand awareness among people who don’t yet even have a phone, and surveying sites for transmission aerials across the country.
“The low mobile penetration rate in [Myanmar] presents a significant opportunity for telecoms firms, but the Digicel consortium will face some stiff competition for licenses,” commented the Irish Independent newspaper, pointing out that O’Brien’s telecommunications forays into the Caribbean islands in the past 10 years have made his fortune.
Not bad for someone who started out on his business career selling horse medicines for his father.
The Digicel joint venture is up against the might of the world’s biggest mobile phone service operator, China Mobile, a state-owned enterprise with 97 percent of the colossal Chinese market and over 700 million customers. But perhaps the recent backlash against China’s strong business influence in Myanmar will influence bid decision-making.
Come Thursday, we’ll know whether O’Brien’s background impressed the Naypyitaw government more than the stolid, faceless managers of China Mobile.
Digicel, who is also in the running, is already accepting applicants.
“We now started accepting job applications for our company
They seem pretty confidant that they will receive a licence
Competition between foreign telecom companies intensified as many begin recruiting local employees less than a week before Myanmar‘s government is due to announce the winners of two lucrative operating licenses.
Experts say that this is one of the most competitive international bids in what is regarded as one of the world’s last untapped mobile markets. The government is expected to announce the two winners on June 27.
“We will employ local and foreign workers fifty-fifty at the beginning. Later there will be more local employees at our company but monthly salaries for them will be according to the national rules,” said Andy Chong of Axiata Group, one Asia’s biggest telecom companies.
Although many foreign companies in the bidding for the two mobile licenses have started recruiting, qualified professionals in Myanmar are scarce. Digicel, who is also in the running, is already accepting applicants.
“We now started accepting job applications for our company. We will choose those who meet our required qualifications,” said an official from Digicel.
Singapore‘s Singtel, who has teamed up with Myanmar partners KBZ and M-Tel, are also seeking employees. Though other bidders have yet to start recruiting, many companies have been promising jobs for Myanmar workers.
And the winner will be the one who can deliver the biggest brown envelope
I am putting my money on Digicel to get a license
Competition has intensified between the remaining telecom companies who are competing for a lucrative license to operate in Myanmar. Many have recently announced how much they intend to spend should they win the bid and are busy advertising their services in local media.
“We have more than 195 million users in 22 countries. The selection committee will see that we can provide an important service in Myanmar if they review our proposal and background history. Some countries we have worked with are rather similar to the Myanmar communication market,” said Mr. Simphiwe Cele, General Manager at MTN, one of the contending companies.
Another contender, Digicel has said they plan to invest US$9 billion if they win the license while France Telecom Orange has announced that they plan to invest US$1 billion in installing communication towers. Upping the stakes, Ooredoo, formerly known as Qtel, has said they would invest US$15 billion to expand their telecommunication services across Myanmar.
Most companies acknowledge that they will have to spend a large amount on infrastructure as Myanmar currently lags behind its ASEAN neighbours in the mobile phone market due to the restrictions placed on telecom communication by the military government in the past. Less than 10 percent of the population currently use mobile phones and experts predict that the market has potential to grow rapidly in coming years.
The Norway based Telenor said they are confident about winning the operator license because they have 35 percent of market shares in Thailand which is a comparable with market in Myanmar. They believe that they have enough experience to win the license.
Many Myanmar citizens are hoping that services provided by the mobile providers will be better if the competition between the companies is intensified. Eleven overseas telecommunication companies are currently waiting for the government to announce the two remaining operator licenses. The announcement is expected on June 27.
PORT-AU-PRINCE, Haiti (defend.ht) – Two citizens and lawyers rebuffed a request for an apology from Digicel and instead retaliated by filing an injunction against the telecommunications giant for it to disclose information on the circumstances and contracts that led to the sending of mass text messages to its clients in the early morning hours of May 14, 2013.
Digicel, on Thursday June 13, requested a public apology from Citizens and Lawyers, Newton Louis Saint Juste and André Michel by sending a court order for them to submit their apology within 24 hours of the notice.
The two lawyers had accused the telecommunications giant of being part of a vast money laundering, drug trafficking and kidnapping operations with the Haitian government, which helped fund the May 14, 2013 two year anniversary event of the President of the Republic.
Michel and Saint Juste retaliated by declaring a writ, Friday, June 14, 2013, to the Executive Director of Digicel in Haiti, Damian Blackburn, to make an invitation to the Tribunal of the jurisdiction. They requested that in a PERIOD OF ONE (1) DAY, Digicel is to communicate to the Central Financial Intelligent Unit (UCREF) the identity of the persons who signed the contract for messages to be sent to customers of Digicel, where no legal standing was in place, and invite them to visit the streets on May 14, 2013 to celebrate two years of “Tet Kale” in power. The injunction also requires that Digicel disclose the amount of the contract and other terms.
After this time, the lawyers request that the facts be at the behest of the two lawyer plaintiffs to be brought to the Prosecutor and with bodies involved in the fight against money laundering and organized crime.
The complaint reads:
That the applicants are surprised that Digicel would assume the right to send messages to citizens, called clients, with which it maintains no legal link from mafia contracts with unknown amounts for which origin is unknown.
That the applicants remind you that the Minister of Economy and Finance, Trade and Industry, Wilson Laleau said to the Honorable Members, that the festivities of May 14, 2013 to commemorate the second anniversary of Tet Kale in power, which Digicel is associated, were funded by supporters of President Martelly, whose names and addresses are unknown.
It is of dubious origin mobilized funds contrary to the law of 21 February 2001 on laundering of assets derived from illicit drug trafficking and other serious offenses.
In an effort to improve its telecommunications coverage, Myanmar had announced its intention to grant two mobile licenses in January of this year, and received 22 application bids from 18 international mobile providers. Last month, Myanmar’s telecom ministry reduced the initial list of approved bidders to 12, which included the Vodafone and China Mobile consortium.
In advance of the June 3 deadline to submit formal proposals for one of the two 15-year licenses, the Vodafone-China Mobile consortium has decided “not to proceed with the process as the opportunity does not meet the strict internal investment criteria to which both Vodafone and China Mobile adhere,” the company said. The consortium’s decision to withdraw from the bidding process follows a review of Myanmar’s final license conditions released on May 20.
According to the announcement, Vodafone and China Mobile will, “continue to watch Myanmar’s progress with interest and will give due consideration to any future opportunities that would meet the companies’ investment criteria.”
Cellular operator Digicel Group Ltd jumped into Myanmar early and big, hiring staff, funding local sports, negotiating land deals for thousands of cell tower sites and signing up hundreds of partners for retail outlets.
The strategy helped propel it onto the shortlist for a mobile license in one of the world’s last mobile frontiers, putting an operator that ranks 65th globally in terms of customers up against giants such as Vodafone Group
Whether its strategy pays off or not, industry insiders say, Digicel, largely unknown outside the Caribbean and some Pacific islands, has shaken up a usually conservative industry.
“They have been a disruptive force,” said Roger Barlow, a Hong Kong-based telecommunications consultant who has worked in Asia for more than 25 years. “Some of the big guys tend to look down their noses at them but they shouldn’t because they’re becoming a credible player.”
Myanmar this month short-listed 12 consortia for two licenses it plans to grant foreign operators in late June. The government wants to expand mobile penetration from less than 4 percent to up to 80 percent by 2015-16.
While Digicel is up against behemoths such as Vodafone, China Mobile Ltd and Telenor ASA, several other big players failed to make the list – among them South Korea’s SK Telecom Co Ltd and Egypt’s Orascom Telecom Holding SAE.
It’s a vindication of sorts for Digicel’s long-term approach. Business development director Frank O’Carroll led the charge into Myanmar in 2009. In early 2012 he persuaded the company to commit funds to build a local brand and prepare the ground so that if it did get the go-ahead it could roll out a service in a matter of months.
That entailed deploying hundreds of workers across the country to negotiate thousands of leases for base station sites, months before the government had even begun the tender process.
“There’s not one square inch of the country we haven’t been in,” O’Carroll said in an interview in Singapore.
Its sponsorship of the national football federation has built brand awareness – of sorts. Lots of locals have heard of Digicel, O’Carroll said, though at least initially they were as likely to think it’s a brand of battery as a cellphone operator.
It’s a strategy, he said, that Digicel has been pursuing in much smaller markets for more than a decade.
“What we are doing in Myanmar is not unique to Myanmar,” said O’Carroll. “The first country that Digicel as a company looked to get a license was Trinidad and Tobago. We did very the same thing. We were there, we leased the land, we rented local offices, we started a local team, sponsored big sports.”
SMALL AND NIMBLE
Digicel has since set up shop in 31 markets, gaining 13 million customers. While none boasts a population above 10 million people, the company has taken on some major rivals, including America Movil SAB, Vodafone, Telefonica and Cable & Wireless.
“I don’t think there’s any fantastic science to it, but I do think it’s our ability to move fast because we’re small, we don’t have this complex machinery that takes months and months to make decisions,” said Vanessa Slowey, Singapore-based CEO of Digicel Asia Pacific, in an interview.
Making those decisions is Digicel owner Denis O’Brien, an Irish billionaire who first focused on small markets in the Caribbean after noticing that spectrum was being auctioned off in Jamaica. Eventually the Pacific beckoned.
Telecoms executive David Borrill recalls meeting O’Brien in his office after three years working for the incumbent operator in Samoa. “He went straight over to his library and opened the biggest atlas he had, turned to the Pacific and said, ‘Tell me about this, where would you put an office here?'”
A few weeks later Borrill was back in Samoa, this time working for Digicel. The company bought out Telecom New Zealand’s stake in the incumbent operator in 2006, and within six months had more than doubled its customer base.
Last financial year the company reported revenue of $2.5 billion, year-on-year growth of 14 percent and EBITDA of $1.08 billion, up 13 percent. It has 87 percent market share in Haiti, at least 75 percent in Jamaica and 92 percent of Papua New Guinea, according to Bank of America Merrill Lynch.
“Digicel is very astute in selecting the markets it enters,” said John Hibbard, an Australia-based telecoms consultant. “It has to be convinced it will win a reasonable market share.”
When it isn’t, it’s prepared to abort. In East Timor, for example, Digicel went so far as building cell towers, and assured the government that if granted a license it could cover more than 90 percent of the population within four months.
But, Digicel said, the government dragged its feet and ignored advice to issue only one license. So when it did eventually win one of the two on offer last year, Digicel turned it down. “Why would we invest $50 million to compete with two other operators, for the 40 percent that is left? It’s crazy. So we handed our license back,” said O’Carroll.
Digicel sold its assets to the other licensee Telin, a unit of Indonesia’s PT Telkom. The company broke even on its Timor investment, said Digicel’s Slowey, without giving details.
Such an approach is at odds with the industry’s more conservative approach, where investment decisions must be highly rational and based on certain outcomes.
“Digicel doesn’t have the institutional memory of other telcos,” said Rob Bratby, a Singapore-based telecoms lawyer with Olswang LLP. “It’s an example of a company with a different mental framework.”
Digicel, however, has not had a free ride in Myanmar. The government turned down its proposal in 2012 to set up a joint venture with the incumbent operator, Myanmar Posts and Telecommunications, in favor of an open tender.
That has meant facing the diplomatic and financial muscle of some of the world’s biggest and best-connected operators, prompting Digicel to take on its own partners: Yoma Strategic Holdings, owned by Serge Pun, a powerful businessman who, unlike many tycoons in Myanmar, isn’t entangled in Western sanctions. The other member of the consortium: Quantum Strategic Partners, owned by financier George Soros.
The Soros-funded Open Society Foundations have long worked with exiles, refugees and dissidents, according to its website. Last year Soros said he would set up an office in Yangon.
Digicel shrugs off criticism that it lacks the experience of working in big markets like Myanmar, arguing that it’s harder to work in lots of countries, whatever their size. Among the shortlistees, only France Telecom SA matches Digicel in the number of markets covered.
“Whether it’s the smallest country in the world you deploy in or the largest, it’s still the same building blocks, still the same issues that you must go through,” said O’Carroll. “A lot of those same things, whether it’s Nauru’s 9,000 people or Myanmar’s 60 million, we think are going to be identical.”
Where Lies the Morale Compass of Denis O’Brien
In Relation to the Moriarty Tribunal, the cards are on the table.
Judge for yourself
March 2010, a judicial tribunal found that a former minister for communications, Michael Lowry, “secured the winning” of the 1995 mobile phone license competition for Denis O’Brien’s Esat Digifone. The tribunal also found that O’Brien made two payments to Lowry, in 1996 and 1999, totalling approximately £500,000, and supported a loan of Stg£420, 000 given to Lowry in 1999. In his 2,348-page report, Mr. Justice Michael Moriarty found that the payments from O’Brien were “demonstrably referable to the acts and conduct of Mr. Lowry” during the licence process, acts which benefited Esat Digifone. In effect, O’Brien was trading in influence or ‘legal corruption’
Did O’Brien and Lowry behave in an ethical way in this matter
Let’s step back in time
The telecommunications company has been accused of giving gifts to a senior Antiguan government adviser who, along with an ambassador-at-large, have been suspended for allegedly making improper contacts with the tender’s board which is considering bids for the sale of the mobile department of the state-run utility company.
Senior adviser to the Minister of Communications Dean Jonas and Ambassador-at-large Dr Isaac Newton were suspended last month after Communications Minister Wilmoth Daniel said they met with the tender’s board in [an] attempt to influence the members to accept Digicel’s bid.
Once again, we see controversy in obtaining a licence from an O’Brien company
Where lies the moral compass of Digicel?
The licensing of mobile network operators has occurred in an unstructured, random fashion that defies explanation. Ownership has been obscure and one suspects deliberately so with the aim of concealing nepotism and corruption
Prosecutors in the USA identified smaller operators, which had been bribing politicians and officials at Haiti Teleco, by way of shell companies, in order to get cheaper rates for calls. A series of convictions has resulted in over forty years of jail sentences. By means of money laundering charges, some of the recipients of the bribes have since been extradited and convicted resulting in jail sentences of up to 40 years.
In May 2006, Comcel and Haitel had about 500,000 subscribers – a cell phone coverage rate of 6% for a population of 8.2 million. Digicel entered the market in May 2006. After one year of operations, May 2006-May 2007, Digicel went from zero to 1.4 million subscribers. The two other cell phone providers in Haiti, Comcel, and Haitel, responded by cutting their prices and offering new services. As a result, Comcel and Haitel increased their subscribers from 500,000 to 1 million. As of April 2012, Digicel has about 3.5 million cell phone subscribers in Haiti. In May 2007, Digicel started offering two BlackBerry services with the Internet, one for enterprises and one for individuals. On March 30, 2012, Digicel has made the acquisition of Comcel / Voila, its main competitor in the Haitian market.
The question is was all of this possible without backhanders.
It was interesting to see that one of the witnesses who appeared in the High court defamation trial against the Irish Daily Mail was the Former Minister for Social Affairs in Haiti Ms. Josefa Gauthier she told the High Court she does not believe businessman Denis O’Brien’s relief work following the earthquake was an act. She said that Mr. O’Brien never sought to publicise his aid work.
Ms. Josefa Gauthier is also a former director of the Digicel Foundation (1)
The disappearing millions
MIAMI, USA – President Michel Martelly told the Haitian Diaspora community in Miami that the National Fund for Education, established in May 2011, had accumulated $16 million [US] and not a penny of it had been touched. Although in January of 2012, Digicel CEO Denis O’Brien said the fund had collected $20 million [US], and in October 2011, the then-Minister of Education said the fund had $28 million [US].
In this instance the magnetic field appears to be giving the compass some problems nevertheless the signs still point to dollars
The background of Josefa is rather interesting.
*Ms. Josefa Raymond Gauthier is the daughter of Adrien Raymond a former minister under Duvalier Government a regime well known for corruption and heavy-handed treatment of its citizens.
On the return of baby doc. Jan 16 2011 delegation of former officials who had served under his regime was waiting at the airport including the former foreign affairs minister Adrien Raymond and former presidential guard commander, the former Colonel Christophe Dardompré.
Current Haitian government links to old regime would bear scrutiny … Thierry and Gregory Mayard-Paul, whose father Constantin Mayard-Paul was a lawyer for Claude Raymond, a feared army lieutenant general under “Baby Doc.” Etc
It is interesting to note that Laurent Lamothe the current Prime Minister has a background in telecommunications
*Min. of Planning & External Cooperation 07/11/201
(1) Many large corporations have charitable foundations and no doubt do good work. It should also be noted that some of the most corrupt companies in the world also have charitable foundations which leads to an illusion that they must be on the road to the
Digicel has won a LTE spectrum auction in Turks & Caicos. After a two-stage bidding process that ran for 6 months, the Turks & Caicos Islands Telecommunications Commission has awarded Digicel LTE spectrum in the 700 MHz frequency band.
Under the terms of the license agreement, Digicel will provide free internet service to all public/government schools, subsidized 4G LTE devices and data bundles for all students and teachers in the country, and each public/government secondary and post-secondary school with a Digital Classroom free of charge.
It may be of interest for readers to know that n August 2009, the United Kingdom suspended the Turks and Caicos Islands’ self-government after allegations of ministerial corruption. The prerogative of the ministerial government and the House of Assembly were vested in the islands’ governor, Gordon Wetherell, and his successor, Ric Todd, pending the report of a Commission of Inquiry and the drafting of a new Constitution of the Turks and Caicos Islands. Home rule was restored in the islands after the November 2012 elections.
Digicel have been quietly angling for a license in Myanmar since early 2010, back in the days when Aung San Suu Kyi was still shut in and the junta was jailing people for dissent. Since then, up to a dozen Digicel officials have been staying at the luxury hotel and working out of an unmarked office in Yangon’s Sakura Tower. They are reportedly providing technical assistance to MPT and even sponsoring a local soccer team—an attempt, says a Yangon-based former consultant to the company, to get into the same room with regime cronies and government officials.
Well now we know as of the 3rs Feb Digicel Group has officially thrown its hat in the ring to be considered for a telecommunications licence in Myanmar, formerly known as Burma. The company said that it submitted its expression of interest in a bidding process, which is expected to yield two new licenced operators within the next five months.
What the selection committee will use to decide who gets the licences are still not clear, but the country will require the winners of the two nationwide telecommunications licences to “meet or exceed specified population and geographic coverage targets”.
What is clear to me is Myanmar is one of the most corrupt countries in the world and to do business in that country you must grease some palms.
However if short on manpower he can always call on Bert the Drumcondra drunk for assistance or else get the Bonox to lobby Amnasty International and Suu Kyi, to help him out with a slice of the cake….
Singapore’s SingTel, Norway’s Telenor, Malaysia’s Axiata Bharti, and India’s Airtel are also named among the bidders.
Telecommunication company Digicel is to head to court on Tuesday to make its case in the ongoing issue with the Tax Administration Department (TAJ).
However, Digicel had secured a court injunction barring the TAJ from extracting information from its servers.
Digicel is contending that it has been supplying the required information to the tax officials over the past months.
In a statement issued late last evening, however, Digicel provided no specific word on the nature of the information it has been providing the tax authorities.
Digicel has also strongly refuted any form of wrongdoing emerging from what it calls a blatant witch-hunt and fishing expedition on the part of the TAJ.
It has also warned that it will use every possible legal avenue to pursue those involved in this matter whether directly or indirectly.
Originally Published: Saturday May 5, 2012 | 10:59 am
Tomorrow: Ten things to know about the Denis O’Brien/Siteserv transaction
Despite all the groundwork that was put in place to open up Papua New Guinea’s mobile communication market, there are those who still think of the interest shown by Irish-owned, Jamaica-headquartered GSM giant Digicel as a war that is being waged.
To incumbent carrier Telikom PNG, this is a war that it believes is being fought in a playground where unethical tactics and cleverly executed manoeuvres would be employed by the newcomer in order to get what it wants.
In August, Telikom PNG warned its workers through its corporate newsletter of “an opponent who might play by different rules”.
By last month, Digicel and competition in general had become to it as “enemies at the gate”, and in an attempt to motivate patriotic sentiments against these “enemies”, called on its workers to “stand together”.
“Telikom has many enemies at the gate at the moment and the last thing we need as a family is enemies within,” urged PNG Telikom acting CEO, Peter Loko.
He went on to implore the increasingly agitated workers to “look at the forces lined up against us at the moment”.
“We have competitors who do not always appear to act ethically. While we follow the laws of PNG, others do not always seem to feel the same responsibility. We have regulators who make decisions that go against us, although we are obliged to act under the laws and regulations of the country. This sometimes does not seem fair, especially when others seem to be able to break the rules without penalty.
“We have some people in positions of influence in the media who seem to take delight in showing up our faults. They may be acting honestly and in the public interest as they see it, or they may be influenced in some way to write against us. We should not give them gossips or backdoor stories. There are already enough lies told about us. We will continue to be honest and ethical, and try at all times to tell our side of the story factually and hope for fair treatment, letting the public decide.
“We are being physically attacked. There is evidence on all sides that a war of criminal sabotage is being waged against us, cutting our cables, destroying our network, disrupting our services, stressing our staff and costing us money…there are enemies at the gate. Let us fight them as a family.”
Having abruptly “awoken from a deep sleep and found that they suddenly had the spectre of some competition looming on the horizon” as described to this magazine by an industry observer, Telikom PNG is going all out to take on the new force in what is increasingly looking like a David versus Goliath showdown.
Except this time, it looks like God has left town and the actual battle is being fought in the middle of serious allegations of corruption, criminal activities, accusations of favour-buying and industry uncertainty as government proceeds to put in place a new ICT policy that would nationalise all networks and liberalise service.
War started: “This war has just started,” Loko told ISLANDS BUSINESS. “We have had cable cuts (by vandals) where we have never had it before and strangely, they just cut it and leave it there. We had to ask why? Why are they doing this?”
It couldn’t possibly be Telikom PNG, he argued, for “why would we go and kill ourselves?”
Earlier on during mid-month, PNG’s Ombudsman Commission issued a press release and expressed concerns over “allegations that a certain telecommunications company is issuing bribes to lure political support at the national parliament to promote its business interest in the country”.
“Elected leaders have a duty to conduct their public duties as required by the Constitution,” said chief ombudsman Ila Geno in a statement he jointly signed with ombudsman John Nero and acting ombudsman, Roderick Kamburi.
“On the same token, the commission appeals to business enterprises, foreign or otherwise, not to approach the decision-makers and leaders of this country in this alleged manner. If the allegations are true, it is a serious corrupt conduct and a serious threat to good governance, good leadership and democracy in PNG. This country is battling with corruption. What is the political party in government doing with this company? What right does this company have to approach PNG’s elected leaders in this alleged manner?”
The relevant licensing and regulatory authorities have also been roped in and are teetering at the edge of being polarised by the politics of this war. On one corner is the Independent Consumer and Competition Commission (ICCC), a victim of its own doing when, in 2005, acted upon the gazetted notice by the Somare government to introduce competition in the mobile telecommunication market after March 2007.
“The ICCC is required by law to ensure that government policies, which are approved by the NEC (National Executive Council, the government cabinet) and notified to ICCC, are carried out. And we did,” said ICCC commissioner and CEO Thomas Abe in his speech to the Port Moresby Chamber of Commerce and Industry early last month.
“Unfortunately, not every government agency apparently felt the same way. The IPBC (Independent Public Business Corporation—created by government to support the commercialisation of public enterprises), as the sole shareholder in Telikom, continued to advocate a position that would have prevented the introduction of mobile competition from March 2007. Telikom, from about mid-2006, also tried to frustrate the policy by instituting multiple legal actions against the ICCC, several of which were dismissed by the courts as an abuse of process,” said Abe.
“Earlier this year, the ICCC was on the brink of agreeing with Telikom, at the most senior levels, to settle all legal proceedings and work towards a sensible introduction of mobile competition. Telikom was instructed to stop talking to us and not to agree to anything.”
Coming in as a counter force is PANGTEL (Papua New Guinea Telecommunications Technical Authority), seen by critics as being influenced by special interests after its failed attempt to withdraw Digicel’s radio spectrum license in July.
As tension and uncertainty in PNG’s telecommunication industry slowly gathers pace. Some fear it could snowball into something unpleasant. It is also clear that this is also a war of technology and one where PNG Telikom has been caught napping.
“Digicel has ‘been there and done that’ so they are experts in the art of fast rollout of network that I think Telikom vastly underestimated the opposition’s ability to get things moving that fast,” said Terry Griffiths, PNG-based radio frequency consultant and former manager of Pacom, distributors of radio equipments in PNG.
“When Digicel launched its system a few weeks ago, it immediately commenced very aggressive advertising and pricing of its products and services and again, this caught Telikom offguard. Now the two companies are trading advertising blows in the local papers and billboards around the country,” Griffiths told ISLANDS BUSINESS.
Major upgrade: “The Telikom infrastructure is also very tired and in need of a major upgrade.This includes all the remote sites they are using for the GSM system as well as their microwave backbone and fixed line cable system. It is obvious that the excessive spending on advertising has resulted in them having problems funding any real upgrades at this stage. In comparison, the Digicel system is all new, latest version system and the coverage and general operation leaves Telikom for dead. The only real issue is the restriction on Digicel to interconnect into either the Telikom fixed line or mobile network and this appears to be a political issue rather than any real technical reason. It obviously means that Telikom is missing out on a lot of revenue through their networks because of the restrictions. In essence, the competition has woken Telikom up, increased the connection of the Telikom GSM phones on to their network and made them a bit more market-oriented, which is long overdue.”
The issue has all the makings of a very difficult problem for the Somare Government, who is now perceived to have changed course from its initial intention to open up the mobile communication market. Whatever picture it had in mind when it envisioned that, liberalisation was obviously far removed from what became of the industry in 2007.
Last month, Somare made it clear in the country’s parliament that competition was welcomed but any telecommunication infrastructure, its management and its control must remain the sovereign property of PNG and its people, as will be the result of the new servco/netco model that the PNG Government has now adopted. And among the hues and cries against this, there are those who seriously believe that something should indeed be left behind in the liberalised industries for Pacific people to own.
“I support the major telecommunications network remaining in the hands of the government, as well as power and water for that matter. But if, as has been agreed you are going to let competition in, then give them a fair go and meet them with a vibrant and competitive operation,” Griffiths said.
Politics aside, the ball is now in Telikom PNG’s court.
Tomorrow: Digicel to fight tax raid in court – Jamicia
A GATE for Whom | CARIBARENA ANTIGUA
The recent announcement of the GATE project was marketed as a “major”, “historic”, “game changing” initiative that would change the face of Antigua and Barbuda forever. However, just how effective and significant the GATE project will really be needs a more detailed breakdown.
The backbone of the GATE project is Digicel‘s soon-to-come 4G LTE network. Basically, 4G LTE is a network that allows phones, laptops, and any compatible device to get high speed internet anywhere. Whether you are at home, on the road, or at the beach, you can get high speed internet (assuming the provider has good coverage).
The primary advantage of 4G was for social interaction. Watching youtube videos, uploading photos to Facebook, and calling on Skype all from a smartphone drove the market appeal in the United States, giving birth to the 4G LTE technology. So all 4G LTE really does is provide fast access to the internet anywhere.
At Thursday’s announcement, the Government Assisted Technology Endeavour (GATE), consisting of four components, was basically various ways of implementing and leveraging Digicel’s 4G network.
One of the major components of the GATE program was “e-Education computer tablets and e-Education connectivity”. Putting big words aside, the Government are buying thousands of Tablets (like the iPad), hooking them up to 4G, and giving them to students. Minister of IT Dr. Edmond Mansoor said during the press conference that Digicel had donated $6.75 Million towards the Tablet fund, in which 6,000 tablets will initially be purchased.
This raises two important questions. Firstly, why Tablets, and secondly, why 4G?
The Minister said that the Tablets will be manufacturered by Samsung and compatible with 4G. However, tablets still do not support the same level of word processing, ease of use, and compatibility with e-learning programs that laptops do.
One Laptop per Child is a global organization, from which programs like the GATE project can receive fully capable laptops that are built tough and designed for educational purposes for the price of $200 USD. With $6.75 Million ECD, the Government could purchase approximately 12,500 such laptops.
So why use Tablets? Tablets are easy to break, incompatible with most if not all e-learning systems, and limited in terms of word processing and ease of use. Tablets are also expensive when compared to the One Laptop per Child Laptop, and offer less compatibility and features.
And now for the second question, why 4G?
Internet is not something new to Antigua and Barbuda. The Government do not need 4G technology to equip schools with laptops and internet, even if the entire campus has to be covered. Why didn’t the Ministry instead implement this solution with APUA‘s ADSL technology? Or LIME’s wireless internet?
Why did the Government choose to leave the schools without internet and devices, and wait for Digicel’s 4G network in order to purchase tablets that will work on Digicel’s network, when the technology has already been in Antigua and Barbuda for years?
Putting laptops in the hands of students, and giving them internet connectivity, is a fantastic initiative. But why has it been so delayed? Also, why is the Government building so heavily on Digicel?
After the Government experience with APC, in which many officials, notably Prime Minister Dr. Baldwin Spencer, promised that the Government would never rely on private groups for essential services, why is Digicel being given such a huge project?
Why isn’t APUA instead being harnessed? APUA have $15 Million worth of 4G LTE equipment awaiting installation in Antigua and Barbuda. Why don’t the Government instead support APUA’s attempts to establish a 4G network, and then the Government and people will “own” the 4G network?
The Minister said that, “the connectivity on an annual basis to these 6,000 students is valued at $14.3 million, and over the 5 years, the connectivity will be worth $71 million.” These Millions of dollars are going to Digicel, and by extension, leaving the country, when instead they can be payed to APUA, and circulate within the economy.
And Digicel’s services are not only being harnessed in schools, but also in “the Passport Office, Immigration Department, Lands and Survey Department, High Court Registry, Mt. St. John’s Medical Centre, and District Medical Clinics”.
While there is still debate about Private vs. Publicly-owned essential services, the Government took the position that essential services should be owned and controlled by the Government. So why are the Government deliberately breaking their own policy for Digicel, particularly in crucial areas such as the Immigration Department, Passport Office, and MSJMC?
“This is a major, major, major, major development in how Government partners with the private sector to propel Antigua and Barbuda forwards ladies and gentlemen,” were the exact words used by Minister Mansoor during the announcement.
Also, who is paying Digicel the $14.3 million a year for students to have 4G connectivity? The Government seem to be the party responsible, as the Minister said that this connectivity had been “pre-negotiated” between the Government and Digicel.
And if the Government fail to pay Digicel, will Digicel disconnect the students and various Government departments? Business is Business, and there is no reason or indication that Digicel will donate this connectivity.
Beyond the e-Education, there are more interesting points made by the Minister during his speech. He said, “1000 dongles will be provisioned, Mr. Minister of Finance, with 4G LTE connectivity, and we will make sure the top 1000 people in Government get trained in the use of this technology and more importantly will have access to the Government platform and have access to the internet 24/7, 365.”
A dongle is a device that looks like a USB flash drive, but allows you to connect to network or information. So what the Minister is saying that 1000 of these small devices will be given that will allow Government officials to connect to the 4G network and access the internet at any time.
There is very little complication in the use of dongles. Modern dongles are plug-and-play devices, requiring no interaction from the user. So what training the persons will need to receive, beyond connecting the dongle to a USB port, is unclear. Further, all these devices do is give Government officials or workers access to the internet, so unless there is a powerful online platform for them to work on, the dongles will probably be used for Youtube and Facebook.
The term “e-Government“, which was tossed around carelessly during the announcement, doesn’t refer to Government officials having 4G on their laptops or devices. e-Government solutions involve computerizing of whole Ministries. Why isn’t the police force computerized? The DCA? Is this Ministry of Finance computerized? Why can’t people go online and see all the active projects and costs that the Government is currently involved in?
These are some example of true e-Government technology. Why don’t the Ministry spend time in developing and computerizing the Government and deploying real-world, effective solutions? It seems the Ministry is too busy finding ways to get people on Digicel’s 4G network to engage in any of these crucial development tasks.
The Government seems to be over-stressing and exaggerating the uses of 4G networks, and while it could be said that the GATE initiative is a good concept, there are many issues and questions that need to be answered.
I wonder does a little bit of corruption enter into the equation somewhere along the line ?
Tomorrow: O’Brian and Digicel Never far from Controversy Islands Business – Business: ENEMIES AT THE GATE –PNG TELIKOM