EAP - The Pacific Infrastructure Challenge - World Bank (2006).pdf
EAP - The Pacific Infrastructure Challenge - World Bank (2006).pdf
EAP - The Pacific Infrastructure Challenge - World Bank (2006).pdf
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Ownership Arrangements<br />
We observe the following ownerships arrangements in <strong>Pacific</strong> countries:<br />
Privatization and private sector involvement is being introduced gradually to<br />
telecommunications sectors for the provision of mobile and internet services.<br />
Most of the remaining service providers operate as commercial corporate entities<br />
Governments have retained control of the provision of basic telephony services<br />
Private participation is much less extensive than in the <strong>Pacific</strong> than it is in the<br />
better performing telecommunications markets of the Philippines and the<br />
Caribbean.<br />
Incumbent operators have been corporatized in three of the <strong>Pacific</strong> countries. In Fiji,<br />
Telecom Fiji Limited is a government-owned limited liability company with an exclusive<br />
license to provide domestic telephony for a 25 year period (from 1989). Kiribati<br />
Telecommunications was divided into two companies: Telecom Kiribati Limited and<br />
Telecom Services Kiribati. Telecom Kiribati Limited is a fully government owned asset<br />
holding company that collects lease fees from Telecom Services Kiribati for Government<br />
funded facilities. Telecom Kiribati Limited also advises the government on regulatory<br />
matters. Telecom Services Kiribati (TSKL) is the national telecommunications service<br />
provider. It was established as a Joint Venture between the Government of Kiribati and<br />
Telstra, Australia in 1990. This Joint Venture agreement was terminated in May 2001 33 and<br />
TSKL has been operating under full ownership of the Government of the Republic of<br />
Kiribati ever since.<br />
Cable and Wireless <strong>Pacific</strong> ended its involvement in Tonga in 2000. International and<br />
domestic telecommunications services were combined under the government-owned Tonga<br />
Communications Corporation (TCC). TCC is licensed as the only full range<br />
telecommunications service provider. It has a universal access commitment throughout<br />
Tonga<br />
In Papua New Guinea Telikom PNG Ltd was established in January 1997 and given<br />
exclusive rights to provide all telecommunications and value added services. Mobile services<br />
are provided by <strong>Pacific</strong> Mobile Communications, a wholly owned subsidiary of Telikom<br />
PNG Ltd. Papua New Guinea is currently privatizing this state monopoly. Until two years<br />
ago, the preferred operator has been Fiji Telecom, but the government has recently switched<br />
to negotiating with Econet, an African-based group. Econet has paid for 51% of Telikom in<br />
a deal negotiated with the Independent Public Business Corporation, which now only<br />
requires formal cabinet approval for completion. <strong>The</strong> remaining 49% will stay in government<br />
control.<br />
<strong>The</strong> deal requires Econet to introduce telephony services to 1400 villages throughout the<br />
country under a community service scheme that will be funded through tax credits. Econet<br />
expects to invest around AUD$200 million 34 in Telikom. <strong>The</strong> deal is yet to be finalized. In<br />
September, questions were raised about Econet’s financial viability and the entire deal has<br />
come under severe criticism from both the public and private sector in Papua New Guinea 35 ,<br />
33 Anecdotal evidence suggests that Telstra terminated this Joint Venture due to low revenue generating<br />
capacity<br />
34 “<strong>The</strong> African Connection” in Fiji Islands Business, August 2004<br />
35 “More Twists and Turns in the PNG Telikom Sale” Fiji Islands Business, September 2004<br />
87