I actually wrote this post last year and didn’t put it up for various reasons but thought I’d better do it now before it becomes irrelevant and also after seeing the great work being done with WIMAX as reported by our Vanuatu friend, The Red Tank. Most of the heated Hoo-Hagh between Telikom and Digicel has died down now but some questions still remain to be answered about our Information Communications Technology industry.
“I don’t know if you read Sundays Independent [Sunday Chronicle] but one of the writers was going on about satellites and air space and all that. He wouldn’t have won any prizes for outstanding journalism or anything but don’t you think he’s on to something there?”
This got me thinking more about the current governments Information and Communications Technology or ICT policy and where it’s heading for us. You can read them yourself here (in PDF):
- IPBC Covering letter
- PNG Telecommunications Deregulation Blueprint (May 2007)
- National Information and Communications Technology (ICT) Policy
I have read the policy papers, which although sets out some noble goals and aspirations to developing ICT in PNG and the strategies it will take, the policy documents however remain very muddy on the roles of the players in the industry. It would perhaps be fair to say that the current policies do not reflect in anyway the existing Telecommunications laws of PNG. The laws currently support a controlled deregulation of the industry. So that would mean that although de-regulation is to happen it will do so under certain guidelines.
For most of us, how our ICT sector is developing can be easily understood by following the players and their services in PNG. In terms of the players then, what are their guidelines and what are the rules for them to follow under the new ICT policy? This is important as it goes back to the heart of everyones concerns about ‘competition’ being the catalyst for better prices and efficient services.
Now before I continue I want to state clearly here that I am not placing any blame on any player here. Everyone involved has a story to tell and everyone feels that they have a right to the positions they have taken. The main issue here is that there are allot of positions here and someone has to make it clear as to where everyone should stand.
ICT services in PNG fall under 3 major categories:
1. Landlines (PSTN); voice and fax services
2. Data; internet both wired and wireless
3. Mobile; mobile telephony (however this is not clear cut as it can involve data services as well)
Roughly 5 years ago all we had was Telikom which was regulated by PANGTEL alone. The Independent Consumer & Comptition Commission(ICCC) did not exist back then. Telikom was the sole provider for all our ICT needs. When deregulation was ear marked through legislation in the Telecommunications Act of 1997, two types of roles for players were discussed to be allowed to exist in PNG at that time.
1. Carriers: which in our case would be Telikom. The carrier would own the landline infrastructure. It would be the only one that can provide telephony services and it would be the only one that can run the international gateway for both telephony and internet services, and
2. Value Added Service (VAS) Providers: This would be mobile phone companies and internet service providers. For example Digicel has a VAS license which is restricted to mobile services and ISP’s have VAS licenses that are restricted to internet services.
On top of the above allowable roles for players in the ICT sector when deregulation was trying to be introduced, the ICCC came into existence. The ICCC therefore took over the role of regulating pricing of ICT services and PANGTEL was to regulate the technical side of ICT services.
Coming back to the players in the industry, 5 years ago before deregulation was a hot topic, the playing field looked like this; Landlines and Mobile Phones were only restricted to Telikom and Data services were being re-sold from Telikom to customers through ISP’s like Daltron, Datec, Global and Online South Pacific. (There used to be a 5th ISP called Data General but it went out of play around the time it was bought by HiTech Industries from Remington). So the only competition happening at that time in PNG’s ICT sector was at the internet service level. The ISP’s did this through their Value Added Service License for Internet.
However there is one internet player that seemed and is still out of place and this is the high speed broadband internet supply company called NewSat. NewSat entered the internet market to provide internet services to mining companies via satellite and VSAT in areas which were described as ‘remote’ locations. Because Telikom at the time was not at the service levels that mining companies were happy with, they naturally switched to NewSat. The arrangement that NewSat had with Telikom was that because Telikom had no services in these ‘remote’ locations it was a legal right for communications to be available to everyone and so Telikom allowed NewSat to provide their services to their ‘remote’ customers.
Keep in mind that the policy in the last 5 years was to only provide for 2 types of players; carriers and value added services. So if NewSat, (which is still here in PNG today) is allowed to bring in internet from overseas bypassing Telikom’s infrastructure and direct to customers, doesn’t that make them a carrier? How can a company that is not registered in PNG, who pays no taxes to PNG and does not even employ anyone in PNG get approval to provide carrier services?
What this means then is that maybe Digicel should bring in internet on their own accord? Actually speaking of Digicel, you can make and receive international calls with them too so have they taken on the carrier role as well in providing international telephony access? My point is that if anyone with money can bring in carrier grade services into PNG like NewSat and Digicel then how is this regulated? How does PANGTEL and ICCC decide who can take on the big wholesale jobs of supplying telephony and data services into the country?
This is what I mean when I say that the new ICT policy does not clarify the roles of the players in the industry. Although it is in fact claiming that Telikom will take on the lions share of carrier services it does not layout a clear picture of how other carrier grade providers (like NewSat and Digicel) were let in and how they were qualified to be doing what they are doing right now.
As we all know there is nothing wrong with competition but it has to be done correctly so that we know that registered PNG companies are running these carrier services and we need to have a qualifying process for them so that we know that the companies coming in as opposed to others that may have tendered will provide competitive rates with savings to be passed onto us telephony and internet customers.
Value Added Service (VAS) Providers
In the VAS role we have our ISP’s, Digicel and Green Com. The ISP’s in the past enjoyed the clear distinctions between Telikom being a carrier and them being re-sellers for internet via the Tiare Gateway. With the above mentioned introduction of NewSat and possibly Digicel (for internet on their mobile phones) this poses a a number of questions again about regulating competition in the market.
Firstly with NewSat, they are not a registered PNG company and so another question besides why PANGTEL let them in is what ICCC is doing about it? Why are they not paying taxes? If they are not a registered PNG company then how can ICCC regulate the rates that they are offering in the country? NewSat still operates today through their agents Hitron and you only have to look at the Hitron website to find out what services they provide. So from a regulatory point of view is NewSat a carrier and is Hitron a re-seller to NewSat? Do we have the regulatory framework to classify what they are doing?
On top of that comes Telikom with their wireless internet service being sold directly to the customers called Telinet. Now if Telikom is a carrier then why is it bypassing registered ISP’s with licences who are already re-selling internet for Telikom? Isn’t that anti-competitive? Haven’t we been crying about competition all this time? Of course if it is an efficient and cheaper service then I’m all for it and I’d break down my door to get to it, but again, what is the process for Telikom qualifying to do that? Because if they do that then why can’t Digicel do the same since it already acts as a Carrier why can’t it just get an internet gateway too and start selling internet to it’s mobile phone customers?
The potential problem is this, if Telikom controls all roles of providing the internet both wireless and via ADSL (which it has started but is waiting ICCC approval), then do we want to be stuck with a huge demand for the services when their linesmen (especially for ADSL since it runs on copper wires) cannot get to you because they are busy? They have failed miserably with landlines for years so how do we know if they can improve with their implementation with the potentially huge demand for these new Telinet and ADSL services?
Value for Services in the long term
One cannot ignore Telikom’s huge drop in prices for their Telinet service. I currently use Daltron’s wireless broadband and I’m hit with a bill of roughly K2,600.00 per month (Daltron’s rates have since dropped). Telikom can give me a 1.5MB service with a 1000MB cap at K119.00 per month. I have to applaud Telikom there, I am as excited as the next man about prices like this. From asking a couple of friends about whether they would jump at this, it was all a resounding ‘Definitely!!!…the ISP’s have ripped us off for so long’. The majority if not all the businesses and anyone else who spends allot on internet will no doubt switch over because it makes plain business sense.
I know some people may not care as to why ISP’s have been so called ‘ripping us off’, but if we are to develop ICT in PNG then all the players must have protection for their investments. PANGTEL threatening Digicel is a perfect example of this. From what I can gather our ISP’s have also been faced with fighting on an uneven playing field.
ISP’s have invested allot of money in the past several years especially on wireless internet and so how will their investments be protected?
Where to from now?
The splitting of Telikom into 2 companies will be an interesting exercise. It makes sense in some ways in that the infrastructure part is handled by one company and the actual services by another. But you have to wonder if our economy is large enough to adopt such a strategy? It seems like a first world strategy for a developed and robust economy, because I would’ve thought that all we needed to improve in Telikom was it’s management. I would hate to think that perhaps splitting the company is a way for dressing up one of them for an eventual fire sale.
If the Telikom split is to go ahead anyway and if that is what we will be living with for the rest of our lives then lets do this properly and lets clarify the roles. The roles of the 2 purported Telikom companies and all the players in the industry need to be classified and regulated appropriately because what we all need is a vibrant ICT industry where all service providers know what they can and cannot do in PNG.
The ICT Policy reads:
“At the heart of this Strategy is the recognition of the importance of three interrelated enabling conditions:
- Connection: Affordable access to viable ICT infrastructure such as telecommunications networks, computers, internet signal, mobile phones and other devices.
- Confidence: Developing the necessary skills at all ages, in all parts of society, to use and participate in ICT effectively. Such skills include functional and digital literacy and the ability to take part in an interactive electronic environment. Confidence also encompasses the dimension of trust in using ICT and addressing the challenges that may erode trust in electronic commerce such as spam and electronic crime.
- Content: The information which can be made available through digital networks includes national heritage collections, goverment information, local language resources and research databases. Trough effective uses of the internet, the people of Papua New Guinea can gain access to online facilities for entertainment, learning and business as well as information generated by government, businesses and community organisations.
These three dimensions reinforce one another. Being connected provides the means, confidence provides the skills and trust and content provides the reason for engaging in the ICT age.”
Being dynamic in the services you can provide is one thing but being dynamic in how you deliver and have your services paid for is a totally separate issue. So I believe that the three C’s as provided above are admirable, but for my argument here in this post, who will build the connections? The players of course. They are the ones who will provide the efficient and competitive delivery of content that will determine confidence.
It is a mammoth task for all players to develop our ICT industry and Telikom and the government need to learn how to work with the private sector and know how to make concessions when implementing their ICT strategies. Everyone in the ICT industry has the potential to catapult all our dreams into the future if they are all simply given clear roles and a level playing field to play in. In the end that is where proper competition will bring the results we all want.