EAP - The Pacific Infrastructure Challenge - World Bank (2006).pdf

Ownership Arrangements
We observe the following ownerships arrangements in Pacific countries:
Privatization and private sector involvement is being introduced gradually to
telecommunications sectors for the provision of mobile and internet services.
Most of the remaining service providers operate as commercial corporate entities
Governments have retained control of the provision of basic telephony services
Private participation is much less extensive than in the Pacific than it is in the
better performing telecommunications markets of the Philippines and the
Caribbean.
Incumbent operators have been corporatized in three of the Pacific countries. In Fiji,
Telecom Fiji Limited is a government-owned limited liability company with an exclusive
license to provide domestic telephony for a 25 year period (from 1989). Kiribati
Telecommunications was divided into two companies: Telecom Kiribati Limited and
Telecom Services Kiribati. Telecom Kiribati Limited is a fully government owned asset
holding company that collects lease fees from Telecom Services Kiribati for Government
funded facilities. Telecom Kiribati Limited also advises the government on regulatory
matters. Telecom Services Kiribati (TSKL) is the national telecommunications service
provider. It was established as a Joint Venture between the Government of Kiribati and
Telstra, Australia in 1990. This Joint Venture agreement was terminated in May 2001 33 and
TSKL has been operating under full ownership of the Government of the Republic of
Kiribati ever since.
Cable and Wireless Pacific ended its involvement in Tonga in 2000. International and
domestic telecommunications services were combined under the government-owned Tonga
Communications Corporation (TCC). TCC is licensed as the only full range
telecommunications service provider. It has a universal access commitment throughout
Tonga
In Papua New Guinea Telikom PNG Ltd was established in January 1997 and given
exclusive rights to provide all telecommunications and value added services. Mobile services
are provided by Pacific Mobile Communications, a wholly owned subsidiary of Telikom
PNG Ltd. Papua New Guinea is currently privatizing this state monopoly. Until two years
ago, the preferred operator has been Fiji Telecom, but the government has recently switched
to negotiating with Econet, an African-based group. Econet has paid for 51% of Telikom in
a deal negotiated with the Independent Public Business Corporation, which now only
requires formal cabinet approval for completion. The remaining 49% will stay in government
control.
The deal requires Econet to introduce telephony services to 1400 villages throughout the
country under a community service scheme that will be funded through tax credits. Econet
expects to invest around AUD$200 million 34 in Telikom. The deal is yet to be finalized. In
September, questions were raised about Econet’s financial viability and the entire deal has
come under severe criticism from both the public and private sector in Papua New Guinea 35 ,
33 Anecdotal evidence suggests that Telstra terminated this Joint Venture due to low revenue generating
capacity
34 “The African Connection” in Fiji Islands Business, August 2004
35 “More Twists and Turns in the PNG Telikom Sale” Fiji Islands Business, September 2004
87