Thursday, February 4, 2010

WHY BEMOBILE? Digicel lelebet!

Dear Editor,

 After seeing a lot of views being shared in the media regarding the issue surrounding the right to provide mobile telephone services to Bemobile instead of Digicel by the Telecommunication Evaluation Committee (TEC), it became obvious that the decision was one that does not go down well with many Solomon Islanders, hence I too would like to share my views on the issue.

If I can recall correctly, the main reasons leading to the demand to open up the telecommunication market was three-fold. Firstly there was this issue of unreliable telecommunication services, especially with mobile telephone services and mainly mobile network congestions and so forth. Secondly there was this issue of cost, where the service provided was so costly and expensive that user talk time in Solomon Islands becomes relatively one of the most expensive in the world. The third issue was regarding the issue of accessibility to mobile telephone services, as the service was centralized only within urban areas, leaving out the rest of population residing in the rural areas. In Solomon Islands most people live in the rural areas and it is at the rural areas that the real economic base of Solomon Islands lies. Hence, there was this realization and recognition that the mobile telephone service must also be extended to the rural areas. 
So due to those three major issues, the ordinary people of Solomon Islands demanded a change of legislation so that another service provider is allowed to compete with the existing provider, which is none other than Our Telekom. The Telecommunication Act was consequently reviewed after some negotiations between the government and Out Telekom and the ordinary people were able to contribute their views in the process. During that time, an interested investor, Digicel was also very much involved in the process, even presenting as a party in the parliamentary review of the Telecommunication Act hence demonstrating its seriousness and genuine intention to invest in the telecommunication sector (mobile) in Solomon Islands. It even set up office in Honiara and went out on its own survey missions to identify best sites to set up mobile telephone infrastructure, equipment and facilities. Its commitment to invest in Solomon Islands therefore was unquestionable and unwavering regardless of the hostile environment it had found itself in, exacerbated by Solomon Telekom's tense dislike to free up the market. A brief look through the Bills and Legislations Committee's Hansard reports of the review will confirm this situation.

Consequently the Telecommunication Act was amended by Parliament and therefore a call for submission by tenderers was made. From what I gathered, and I stand to be corrected on this, only three companies responded, and out of the three only Bemobile and Digicel made genuine submissions. The TEC comprising all prominent Solomon Islanders, with the guidance and advice of the government-hired legal counsel from New York and elsewhere assessed the submissions and made their decision and as we all know the bid to provide mobile telephone service in Solomon Islands was won by Bemobile, a company that is based in Papua New Guinea.

 Bemobile, from my knowledge, which is subject for correction, has been based in Papua New Guinea for some time now and when it first came into operation in Papua New Guinea, its products were sold under PNG Telikom. In fact, some facts even show that Bemobile is a remake of B-mobile a defunct division of Telikom PNG. When its shares were sold, Telikom retained 50% while the other shares were divided among NASFUND (5%), Nambawan Super (5%), and the US-based Trilogy International Partners LLC (20%) and GEMS Ltd (20%). When this deal was announced in 2008 the PNG State Minister then described it as a "historic milestone for PNG's telecommunication industry" and indeed it was. But is the decision to have Bemobile instead of Digicel to provide mobile services in Solomon Islands also a milestone in Solomon Islands telecommunication services industry, especially for ordinary mobile service users?
Well the answer depends on how you look at it. However, looking back at the three main reasons as to why there was the need to open up the market, I strongly believe that it will never be the case at all for Solomon Islanders. The keywords in the whole equation are efficiency and reliability, two things that Bemobile has never been close to achieving in Papua New Guinea. As far as mobile service user's are concerned Bemobile has never made any great impacts in PNG's mobile services since its establishment. It has been described as highly ineffective providing a service that is expensive but very unreliable. On the other hand, no one can say those same sentiments about Digicel since it has entered PNG Telecommunication industry. All comments and feedbacks about Digicel have been very positive and encouraging. In addition, Digicel has wide experience in the industry, having operated in many other countries around the world hence its proven track record of success around the world. Bemobile is untested even around the region and its only hope is to bank on the experience of its Trilogy partners who are providing mobile services in New Zealand as 2 Degrees. However, even 2 Degrees remains greatly unpopular in New Zealand as it cannot compete with the might of other service providers such as Vodafone and Telstra. Having subscribed to their service myself at one point I have found it very costly and their promotion tactics misleading. I only used their service for a week to realise that I had made a wrong choice and had to switch back to Vodafone which is much more affordable and reliable.
The odds in the tender process in Solomon Islands therefore, taking into account the three basic issues mentioned earlier which gave rise to the need for an open telecommunication market were against Bemobile. Digicel was the stronger competitor and there was no logical reason that its bid was going to be turned down. As it turned out these odds were defied and the result was totally the other way round. The question now is, why did the TEC came up with the decision it made?

The Prime Minister made a public statement and emphasized that they (TEC and the legal counsel) had made careful assessment of the bids and based on their specified criteria selected Bemobile instead of Digicel. From his statement it was obvious that the decision swayed greatly from the original issues that needs addressing, namely efficiency and reliability, affordability and accessibility. These were the original concerns raised by ordinary Solomon Islanders which resulted in the review of the Telecommunication Act. I am sure you do not have to seek legal counsel from US-based experts to have a complete picture of the situation. These are people from developed countries who do not experience the everyday frustrations of ordinary Solomon Islanders in relation to the high cost of mobile services as well as its inefficiency and unreliability. Moreover, who would guess the independence of the US-based legal counsel when Bemobile is partly owned by two US-based Telecommunication companies?
Hence, in all regards, while I will not question the wisdom of TEC in regards to the decision it has made, I for one sees the decision to engage Bemobile as a highly economical and political one between Solomon Islands and Papua New Guinea governments. It was a decision highly influenced by the economical situation of both countries (due to the global economic crisis and the ailing economic state of especially SIG) and the bilateral relations of the two countries (through MSG) both politically and economically. 
This was clearly highlighted in the Prime Minister's statement when mentioned that Bemobile was willing to provide around SBD$10 million (or some money amounting around that) as a show of their genuine intention to invest in Solomon Islands. I find this as a very lame excuse because Digicel has shown its intension to invest in Solomon Islands and has already been pouring money into the economy long before the million dollar guarantee was made by the untested and little-known Bemobile. Even the name itself, Bemobile, is not market-friendly in Solomon Islands as it can be used to mean various things that are insensitive to our normal day to day language (pidgin).

On the perspective of the TEC, definitely Bemobile will be the best competitor for Our Telekom because it is weak compared to the mighty Digicel. Hence, Our Telekom will be able to stay in the market and may be increase its revenue base which is good for Solomon Islands economy. As we all know SINPF is the biggest shareholder of Our Telekom and SIG owns SINPF. Thus an increase in the earning of Our Telekom will be a direct bonus to SIG. On the other hand PNG Government will also benefit because Telikom PNG, which is partly owned by the PNG Government will also expand its revenue base. This is a very simplistic view of the situation but the list of trickle-down effects of the economic returns of the deal can go on.

The biggest concern however will remain that the ordinary people of Solomon Islands will be the biggest immediate losers of the deal. While Bemobile has made many mouth-watering promises, from the PNG experience I am quite certain that there will still be limited competition and therefore mobile services in Solomon Islands will remain highly ineffective and unreliable, unaffordable and inaccessible. Until another service provider like Digicel enters the market this situation will still remain unchanged.

Above all, while I will refrain from questioning the wisdom of the TEC in reaching their decision, I wish to reiterate that it was a decision made based on reasons that swayed greatly from the original issues that have contributed to the need to open up the telecommunication industry of Solomon Islands. I may be tempted to say that it is a bit selfish of them to sway away from the original cries of ordinary Solomon Islanders, but I am also mindful that the real economic returns of such a deal are yet to be fully realized. However, it is undeniable that the decision will have no positive effect on the mobile telecommunication services in Solomon Islands unless another strong competitor is allowed to enter the market.


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