Is Digicel going data?

By Emmanuel Narokobi

Read today in the papers about Digicel looking into data services. I don’t think they are talking about becoming an ISP but rather building a high speed data network on top of their transmission towers which space can be leased out to banks and ISP’s as well. Here is the article below:

(22/11/07, Post courier) Digicel faces row

Embattled mobile phone company, digicel’s latest move to provide data transmission is set to re-ignite the mobile phone saga. The company yesterday fended off claims its move to provide data transmission was illegal but that appeared to contradict the National Executive Council’s decision for it to provide only mobile services.

Digicel chief executive Kevin O’Sullivan told reporters on Monday that the company will spend $US25 million (K73 million) to construct SDH (synchronous digitised hierarchy) facilities to provide the transmission of data, something it is understood state-owned telecom company Telikom has the sole right to provide.

“We are going to build a high capacity SDH transmission link. It is like building an eight lane highway all over Papua New Guinea, eight lanes each way from a data transmission perspective. Is Digicel selfish to itself? No, we are going to provide access to this eight lane highway so that this means banks, ISP’s and other businesses can access transmission”, Mr. O’Sullivan said.

The cooled-down saga could re-ignite if that data transmission is constructed because State Enterprise Minister Arthur Somare last month in a media conference said neither Digicel nor Green Communications would provide services except mobile phone services. “When we introduced competition under NEC decision 25, [that] decision was specific that it would be for the mobile segment only”, he said.

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Another war may erupt, but it will all come down to classifications of services and line drawing in the sand. The way I see it Digicel is making the business case of maximizing returns on their investment into communications infrastructure. All the towers being built and setup across the country need to be used to their fullest capacity so how better to do that then to introduce more services on the network.

But just because they build a wireless network running on their towers does not mean that they are selling internet services. Because if they are talking about opening the network to ISP’s and banks to use their network, then technically they are just a pipe and not the source of data. Countless businesses in PNG have Wide Area Networks in place, even the banks with their ATM’s is a form of a data network, but they are all not selling data transmissions. All internet still ultimately comes from Telikom, it then goes to the ISP’s then on to banks, big companies, us etc. So I imagine that will be the same here in that data running off the Digicel network will have been initially bought from an ISP.

If on the other hand Digicel buys an ISP licence to sell internet access, then I can definitely see a war erupting. Even if they are acting like the current ISP’s by buying internet off Telikom first, I can see the ISP’s jumping up and down about this because they will be disadvantaged by Digicel’s reach, (but that will be another argument and we’ll cross that bridge if we get to it).

So what is this SDH?

Synchronous Digital Hierarchy is a data/voice transmission standard that was developed to allow for a more efficient transportation of voice calls along, say for our case, Digicels transmission towers. Which means you should think of SDH as a generic and all-purpose transport container for moving both voice and data, because the basic format of an SDH signal allows it to carry many different services because it is bandwidth-flexible. The main advantages of it are as follows:

1. High transmission rates
Transmission rates of up to 10 Gbit/s can be achieved in modern SDH systems. SDH is therefore the most suitable technology for backbones, which can be considered as being the super highways in today’s telecommunications networks.

2. Simplified add & drop function
Compared with older systems, it is much easier to extract and insert low-bit rate channels from or into the high-speed bit streams in SDH. Which means cheaper and faster access for say banks linking to the system if they were to use it for their ATM’s

3. High availability and capacity matching
With SDH, network providers can react quickly and easily to the requirements of their customers. For example, leased lines can be switched in a matter of minutes. The network provider can use standardized network elements that can be controlled and monitored from a central location by means of a telecommunications network management (TMN) system.

4. Reliability
Modern SDH networks include various automatic back-up and repair mechanisms to cope with system faults. Failure of a link or a network element does not lead to failure of the entire network which could be a financial disaster for the network provider. These back-up circuits are also monitored by a management system.

5. Future-proof platform for new services
Right now, SDH is the ideal platform for services ranging from POTS, ISDN and mobile radio through to data communications (LAN, WAN, etc.), and it is able to handle the very latest services, such as video on demand and digital video broadcasting via ATM that are gradually becoming established.

6. Interconnection (yes that’s the one, the big question on our minds)
SDH makes it much easier to set up gateways between different network providers, like (yes you guessed it), Telikom. The SDH interfaces are globally standardized, making it possible to combine network elements from different manufacturers into a network. The result is a reduction in equipment costs for everyone from Telikom to GreenCom to Banks etc.

[For techies out there, you can download more details here]

So what’s in it for us?

Well better, efficient banking systems hopefully, so that we can use EFTPOS cards in small towns without the system ever going down. Maybe accessing internet in the villages, so that PNG can finally get on board the information superhighway in a BIG way. Internet on mobiles, iPhones, ringtones and so on and hopefully all at prices that don’t send us to the poor house.

28 thoughts on “Is Digicel going data?

  1. Hey Manu
    This is going to a a real challenge if Digicel goes data. Last I heard, the ICT policy will be pushed to prevent Digicel and GreenCOm going data but allow them only for mobile communications.

    Its a tough decision but I’m sure Digicel has the financial capability to go to courts and put a stay order to the Government and letting not to remove their data communication network.

  2. Yeah I think it will depend on 2 general issues:

    1. How far mobile communications is defined legally, especially since you can technically access internet on a mobile phone, and

    2. In terms of actual loss of revenue from data sales, the other issue will be how Digicel sources internet access. As I mentioned above if they resell internet from Telikom then it shouldn’t effect Telikom financially and in any case would be a benefit to Telikom. If however Digicel sells internet sourced directly from overseas and by passing the Tiare gateway, then a fight is sure to erupt.

  3. This is nothing to do with the subject. I am in Dubai and am trying to contact anyone in the Lagos Rugby Football Club, The Leopards. Can anyone give me an e-mail address or telephone number.

    Cheers, Ron.

  4. Manu
    Is digicel mobile communication going thru Telikoms Tiare gateway?? If they are not going that way…then I assure you that their data communication will follow thier mobile communication and bypass tiare.

    Now the next issue is the Government. They are hell-bent on leavn a big chuck of the revenue generated in the country. And I can assure you they want a wholly national owened company to do run. If there is none who can set-up, they will set one up..

    As they say, “As long as its Nationally owned”

  5. Hi, I am a reporter in Fiji keeping a tab on PNG’s telecom developments.
    Interesting move by Digicel over there. What if this enhanced data transmission allows Digicel to offer anything over IP on their mobile network?

    I mean, the future is voice, video, whatever else over the IP…if you can’t really do this over the GSM network, why not enhance it? Which is what Digicel has done…makes sense because if you are building a telecom network today, you might as well build it to be able to offer the kind of services that will be relevant in the immediate and foreseeable future, maybe ten, twenty years….so if VoIP, etc opens there, there is no need to build anything else.

    What I find curious is PNG’s new ICT Policy – that in two phases, during 2nd phase, they put in place Netco/Servco, PNG Telikom automatically takes over all network assets, including those of Digicel and other ISPs….Digicel and Greencom then are issued licenses to provide mobile reselling services (“resale-based competition” – National Gazette No. G165 – 25 October, 2007; although this is not expected to continue indefinitely and National ICT Policy has been amended to reflect this intention)…curious thing is will Digicel and other current network operators be compensated for the investments they have made into their network? If so, how much will PNG govt pay out in compensation and where will it get money from? Also, whether this particular compensation will become an issue…

  6. Hi Dionisia and thanks for commenting on my blog.

    To the first part of your comment, yes indeed I mean it’s plain business sense to build scalable infrastructure for ICT services now and the foreseeable future. It’s like building highways and roads across the country that will last long enough and are big enough to take on the future growth of vehicle traffic.

    My personal opinion is that if it can be built then nothing should stop PNG from seeing what is possible for now and our future generations with ICT. We just cannot afford to remain in the dark ages with ICT.

    On the point about the ICT policy, it is a curious topic as to how the PNG government intends to finance the purchase of all these network assets. I can see three possible scenarios:

    1. The govt doing it outright, or
    2. The govt in partnership with a private company buying the assets out, or
    3. The govt raising funds through a public raising so that citizens and Super funds can participate in the ownership of the assets.

    The only issue for us PNG citizens is to watch who exactly is going to own these network assets, especially if the govt. is not going to be to doing 100% of the financing for the assets.

  7. Hello Emmanuel,

    I love reading your blog – very informative and also great to see telecom developments being thrashed out here. We’re going through telecom liberalization in Fiji as well and so, I guess everywhere is the Pacific, this is going to happen as interest is being expressed in the region and new technologies are making it cheaper and possible to connect difficult terrains.

    I agree with you that PNG cannot remain in the dark ages and I think the PNG government has made a very good move with its ICT Policy.
    I have read through this document and think the plan is very good – as a country, PNG is taking the lead in the development of its ICT sector. But in order to maximize and produce results, it needs to bring the cost of communication service down so, important to have competition. Choosing the model for competition though is where we stump here in Pacific because we are pressured by people like Digicel who aggressively pursue their plans to set up operations in the region. In a way, we are to blame because we have not actively set in motion the environment for a deregulated environment.

    I think PNG government would have not had problems if it had considered the advise given to it that there was a need for a “transition phase” when liberalizing the market.

    It now wants to have this phase by taking over all networks (and it has gazetted intentions not to monopolize network indefinitely) but it already has given Digicel and GreenComm the full network operators license as well as spectrum licenses…so I think PNG government will meet more difficulties when it is time to tell Digicel and Green Comm to relinquish these licenses and instead get a service reseller license.

    I don’t know whether Digicel will allow itself to do this, especially when there are concerns that if PNG Telikom takes over network, there are risks of the quality of service as well as expertise.

    I read a paper by Mr Ogis Sanida of NRI titled: ICT Policy: The need for Review (Spotlight With NRI, Development Issues, Policies, Trends, October 2007, Vol.1 No.5) and I thought he had made a very valid point: “If Telikom NetCo, as a monopoly, inherits the problems of the current Telikom PNG Ltd, such as deficient infrastructure, and an inefficient costly service, as has been the norm for the past 52 years, then the ability of Telikom NetCo to deliver is seriously in doubt.”

    Maybe the infrastructure problem will be solved because Telikom NetCo will take over the state of the art networks by Digicel and existing ISPs but what about “unreliable service delivery and costly services”…how will this be dealt with?

  8. True true Dionisia, Telikom’s record over the last couple of decades does not translate into allot of trust.

    what are things like in Fiji? Who do you think will be the likely winner in the mobile phone bid going on at the moment?

  9. Hey Emmanuel, how is Digicel’s customer care over there? I live in El Salvador and it is terrible. I cant wait for my contract to end with them. I think it is great Digicel is investing in new technologies here also, but it is useless if you cant use your device and you cant fix the situation because customer care here only wants to charge you and charge you again if you have any problem with your device. Last time I escalated my case to Jamaica and I got and exchange for my wife’s cellphone, but right now not even that seems to work for my own cellphone which it is borken.

    It is not the first time I hear an Alcatel cellphone fails but now I can tell that the quality is not good at all, because both, my wife’s and mine, were Alcatel.

  10. By the way, I forgot to mention that I had to wait hours because they lost my phone when they sent it to the repairment place they have, and I counted just that day 20 people having the same issue

  11. Hi Emannuel,

    Fiji…the market is now open. We are going for an open licensing regime which means anyone can operate in whatever market they choose to operate in. Fiji had been on the deregulation path for quite sometime with the only difficulty over the years being: how to compensate the incumbents for having to prematurely end their license?

    Last month, the Fiji interim govt and the incumbents reached an agreement over this so, maybe by next year, the exclusive licenses will be officially revoked and then, licensing begins under the new licensing regime.
    The govt has decided that Fiji can only accommodate three GSM 900 mobile network players due to available space on this frequency range so, any more than that might have to lease off existing networks.

    We already have Vodafone Fiji operating so that means, two more can be accommodated. I have been told there are 15 companies that applied and govt will have to choose two. One of them, Digicel Fiji is already building its base stations around the country and it has a very good chance of getting an operators license. Not sure who the third company is likely to be.

    But all these would be taking place by the new-year. Well I wish PNG best of luck in the new-year regarding its plans for opening up its market.

  12. Thanks Dionisia, well sounds like things are more stable at your end with licencing etc…I heard Carpenters are having a go too for a mobile licence, well may the best cell phone company win.

    Ohla Roberto, Comestah? nice to hear from someone all the way from El Salvador. Digicel has been quite good with us and their service, but it obviously sounds like they’re not doing right by you there.

    How many other mobile phone operators do you have in El Salvador? And when did Digicel come into your country?

  13. Manu,
    You sa’e, Telikom has the capacity and the bucks to make it bigger and match Digicel ah? But telikom is moved by a bunch of obsolete Cunts that think that 2 tin cans and a string is still the latest tech in use.

    People should stop saying bullshit like ‘..the money stays back in the country’ and shit. I have not seen any changes since the day I started investing back into the country through Tax and paying for such local services and shit!!

    Telikom should come off their high-horses and submit to the fact that they are incompetent and can’t match the comp in this hi-tech age. I just can’t blame the cunts: they are just a bunch of x-Public Servants turn business-man-wannabes.

    Living standards in PNG is sooo fucked!!, the average pig-dogg will sell the National Pride just to get by. Whatever is cheaper, IS THE CONVENIENTS for the day.

    Ol dis’la ol Executive Management blo Telikom ya, ol money-face-kaan-arsehole-greedy-kokpekpek…. Arseholes!!!

    PS// Best Blog Ever!!!

  14. Manu i will have to agree wit pig-dogg on dis 1 (even though i tink he could use better language.) Telikom PNG should do two thins:
    1 Stop playing da same ol PNG owned song and improve there services
    or 2 go private and not have any influence from the government

  15. @zoggy

    Yeah I thought about removing the comment but I figured the language indicated the type of frustrations that are around.

    So in terms of interconnection, how do you mean? As in if I think it’s a good idea or as in if I know when it will be happening? I don’t know when it will happen though. Both companies had begun talks last year for it but have not heard since.

    Although Green Com and Digicel will be interconnecting, that much I know.

  16. Thanks all. My belief is that somewhere along the line they will still do the interconnection, even if a new government comes into place. But that is if Digicel or Greencom survive through.

    What is unfortunate is that today’s generation, the last year and this year, is suffering to put things together and make sense out of their communication aspirations. It’s a pity and also funny to see many wantoks having two phones (or SIM cards) at the same time.

    Let’s just hope that the Lord gives some peace of mind to Telicom. I sometimes have pity for Telicom coz, it looks “drunk” now than ever.

  17. Interconnection is not just a good idea, it is a right that we consumers have. ICCC has stressed this and it is not some option to be considered by these mobile companies it is a feature of mobile communications in this country that must be implemented.

    The Telecommunications Interconnection Code of Practice can be obtained from ICCC. See, http://www.iccc.gov.pg/publications/indexA.htm (I had problems downloading the Code of Practice though).

    ICCC needs to set deadlines and then impose sanctions if breached.

  18. Digicel going data is a welcome news, this development is being followed closely by allot of Telikom DSL, SHDSL, ATM and E1 subscribers. Hopefully Digicel SDH network can be used as a backup to the currently unreliable that has “always been here”.

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