DIGICEL PRESS RELEASE: Amended Telecommunications Act introduces monopoly on the international gateway

Digicel, the fastest-growing mobile operator in the Pacific, expressed disappointment at the amended Telecommunications Act passed by Parliament yesterday. The amended Telecommunications Act seeks to take away Digicel’s right to operate its own international gateway and grants Telikom a total monopoly over the right to operate an international gateway. This will result in substantially higher rates for international calls as well as a lower quality of mobile service.

According to Kevin O’Sullivan, CEO of Digicel Papua New Guinea: “Digicel advocates a regulatory environment for telecommunications including legislation which is pro-competition and one that places the interests of customers first.”

“The amended legislation is a clear step backwards for Papua New Guinea. The consumer will suffer and will experience higher international calling rates and a lower quality of service due to network congestion,” he said.

A staggering number of people have voted in an ongoing text message poll (330,000 text messages to date) saying that they support Digicel operating its own international gateway.

“The people have tasted the benefits of competition and have the right to continue to enjoy them. Lower prices, better quality, increased coverage and introduction of new services such as being able to use your Digicel mobile phone in 91 countries would not have occurred without a fair and competitive mobile market,” Mr. O’Sullivan said.

In support of Digicel’s commitment to offer affordable international call rates and a high quality mobile service to its customers through its own international gateway Digicel has sought orders from the National Courts and the hearing is scheduled for 21 May 2008 (OS No. 156 of 2008 – copy attached).

On 18 March 2008 Telikom requested that the ICCC arbitrate on the international gateway. Digicel welcomes the fact that the ICCC will determine the question of the international gateway.

The ICCC has also been requested by Digicel to arbitrate the final few outstanding commercial matters on domestic interconnection, such as pricing. The final technical preparations for domestic interconnection are being made and the ICCC is expected to set interim rates by the 5 May 2008 with domestic interconnection expected to commercially launch in the second week of May 2008.

The government’s decision to implement the amended Telecommunications Act comes only weeks after a report ( Pacific Economic Survey 2008 ) from AusAID on economic progress in the Pacific. The report highlights the positive impacts Digicel and a competitive mobile market has had on Papua New Guinea. Digicel remains confident however that through a positive working relationship with the Government a practical solution may be reached so that the consumer will not have to suffer from the negative consequences of the amended legislation.

See the Originating Summons here: originating-summons-no-156-of-2008-filed-01-april-2008