Interview: Charles Punaha
In which ways have NICTA’s market liberalisation policies affected the telecommunications sector?
CHARLES PUNAHA: The telecoms industry has gone through substantial upheaval in recent years, moving from a state-run industry into an open and lean environment where competition is being actively encouraged. This has been the clear government goal for NICTA since it was established 14 months ago: to be a one-stop shop regulating the industry, to liberalise and open up the telecoms sector to competition, to ensure accessibility and affordability of ICT services. This has been done against the wishes of the established players, which have been opposed to legislation that would enable new entrants to use the existing infrastructure.
The cost of the infrastructure as opposed to the size of the market in Papua New Guinea is a major concern that deters new entrants. There remain considerable barriers to entry for new competitors, not least of which is the high cost of doing business in PNG. Therefore by forcing the existing players to share the infrastructure this barrier will be removed and we should see a fourth player come onto the market shortly. We have already seen a lot of serious interest in the PNG telecommunications sector from many international companies, including some of the biggest global brands.
What recent changes have been made to the legal environment in the country?
PUNAHA: The biggest change that has positively affected the telecoms industry in PNG is the structural changes that have been introduced to the licensing environment. This has been drastically altered in accordance with the government’s wish to open up the market, and PNG now offers one of the best licensing models in the entire world. Only Malaysia and Ireland offer the same licensing agreement that we do, where one licence will enable an operator to conduct all their activities.
Typically, licensing agreements are broken down into specific activities, making it obligatory for a provider to take out a number of separate licences. In PNG, on the other hand, operators can come into the market at the level they are most suited to and interested in rather than having to vertically integrate their activities in order to fit the licensing structure.
It is essential that PNG continues to cut as much red tape as possible from the business environment, and the telecoms industry is leading this charge.
Where does the telecommunications industry fit in the government’s Vision 2050?
PUNAHA: The telecoms industry will play an important part in the continued development of the country, as is clear in the government’s Vision 2050 plan. While telecoms does not form a single pillar of development by itself, it is included in all seven major areas of our economic development. However, it is crucial that the government improve international connectivity and begin to invest in a national fibre optic network. These jobs would be far too capital intensive for the private sector to undertake, but it will be needed as the economy and country continues to grow and develop.
How do you see the development of the mobile phone telephony sector in PNG?
PUNAHA: The mobile telecoms coverage across PNG is now well over 95% in terms of area thanks largely to the introduction of Digicel to the market. With each new licence that is approved, stipulations are put in place to ensure that the new entrant to the market is ready to invest in the infrastructure. For example, Digicel completed in just two years what they had agreed to do over six. They had a clear strategy of getting to every possible area first as quickly as possible to attract subscribers. However, costs are still high and it will be critical to the continued roll out of mobile telephony to the public that these costs are reduced. One clear example of this is the high connection charges that are incurred between different mobile operators. International roaming is another area that must be studied, and appropriate decisions will be made to reduce costs.
Read More from OBG
