by Dionisia Tabureguci
IS FIJI's Internet Service Provider market really deregulated or is it still showing signs of a hallucinating monopoly haunting the living daylights out of existing and potential newcomers?
One must not ask Lionel Yee a question even closely resembling that because he will only politely direct your attention – and in a very rhetorical way - to the decision made by that previous government which chose the model of deregulation for Fiji’s telecommunication industry.
As chief executive officer of Amalgamated Telecom Holdings (ATH), holding company of Telecom Fiji Limited (TFL) which is the majority shareholder in Vodafone Fiji, Yee is often heard to express to the media how peeved the conglomerate is at the way the telecommunication industry had been handled and how short people’s memory seemed to be when it came to acknowledging that.
If ATH has become a beast that people love to hate, then the beast was created not by its management, but by past decisions that loiter around like a bad smell that wouldn’t go away.
“We didn’t get into this space for free,” says the veteran corporate manager who is also chairman of the Vodafone Fiji board. Yee’s foray into telecommunication began immediately after the Fiji National Provident Fund bought 49 percent of ATH from the Fiji government in 1998. He had taken over the role of ATH CEO after serving at the top management level of the pension fund for a number of years.
“We paid close to F$250 million for this and don’t forget, part of the agreement when we bought it was that we have five years of status quo. But we never had one minute of peaceful existence. Every five seconds, we have people trying to barge into us.”
Yee made another classic side step during a press conference in Suva last month when asked about Vodafone Fiji’s ISP license status, since the company has now begun to offer Internet based services to the general public.
He mumbled something about the country’s sole mobile telephone service provider going into wireless Internet and the rest was inaudible.
While announcing its US$15 million partnership with Ericsson Australia for the upgrade of its mobile network to a 3G standard – which its release says will cost it a total US$50 million over a five year period - this affiliate to the country’s biggest listed company had nothing to say about its procurement of a license to provide what would now become new revenue sources among its range of services.
“High speed web surfing and data access while mobile will become a reality so the experience will be the same whether you are in the office or outside. Speeds of at least 1MB/s and up to 14 MB/s should become the norm,” Yee announced. “The new technology will allow Vodafone Fiji to launch a whole host of new infotainment services such as Vodalive!, multimedia messaging, video telephony, location-based services and high speed wireless Internet.”
Behind the grand design however, no one is in a hurry to talk about levelling the playing field where licensing is concerned. There are people in the industry who are confused about this. Does Vodafone Fiji need an ISP license to operate or does it not?
...ATH CEO and Vodafone Fiji chairman Lionel Yee announces the Vodafone Fiji/Ericsson partnership in Suva, Fiji, November 2005.
If it needs a license and does not have it, why has it been allowed to provide Internet services? Another subsidiary question pops up: where is the industry regulator in all this?
What has been labelled as “one hell of a messy confusion” does not end there. Both TFL and its subsidiary, Internet Services Fiji Ltd (trading as Connect) do not have ISP licenses, a point that was raised by the Commerce Commission in its recent ruling on the price of telecommunication services in Fiji. If, under Fiji laws, companies are required to be licensed in order to provide Internet services, as has been required of the new independent ISPs, why are Connect and Vodafone Fiji exempted from this rule?
The Department of Communication, which is the industry regulator and licensing authority, had referred all queries to its ministry’s chief executive officer.
The Ministry of Information, Communications and Media Relations is silent on this issue and did not reply to questions sent to it.
In all fairness, it may be pointed out that telecommunication is a complex industry where problems are not solved overnight. But ISP licensing has been a sticking point since the Internet was introduced into Fiji in 1995. Local media reports at the time had pointed out that there was no mention of the issuance of an exclusive ISP license to Telecom Fiji. Ten years on, this point remains unclarified despite the huge change in Internet and Internet technologies since then.
Yee later reiterates what TFL has consistently argued over the years. That the exclusivity clause in TFL’s telecommunications license is all-embracing and covers all forms of communication in the domestic market, whether transmitted via telephone, telex, telegraph or in data form.
This same rule applies when TFL transferred the part of its license that deals with mobile communication to Vodafone Fiji when the latter was incorporated in 1993.
The conglomerate’s deep conviction with this argument has, over the years, seen it reluctant to allow new players into the market despite government moves to gradually deregulate certain parts of the industry. To illustrate the incumbent’s reluctance, one ICT specialist pointed to the fact that despite the number of ISP licenses that has been issued by the government since it opened the ISP market in 2000 – and this amounts to more than 10 licenses – not one new player has entered the market until this year. If those who had applied for those licenses had banked on some brilliant ideas that they could bring cheap connections to their customers by buying bandwidth directly from offshore resellers or directly from FINTEL (Fiji International Telecommunications Limited), they were greatly disappointed. TFL waived its exclusive licence and emphasised its right of control in the domestic telecom kingdom. No one was going anywhere if they did not go through its network. That being one part of its argument, it then moved to dub itself an ISP and created Connect in 2002 to trade its Internet business. As the Commerce Commission highlighted, both still do not hold an ISP license. But as Yee and TFL managing director Josaia Mar have often argued, every move that TFL makes is catered for in the company’s telecommunication license.
This argument has never been legally challenged however and there are those in the industry who still wonder about how this license, issued in1989, could have foreseen the advent of the Internet when this medium of communication was still a budding cocoon at the time and the world had yet to come on line.
But if the unclarified issue was swept under the carpet, as some commentators believe, then it has been flushed out again as the ATH Group of companies, particularly Telecom Fiji and its subsidiaries Vodafone Fiji and Connect, are forced to compete in a business that is rapidly reinventing itself.
As this edition went to press, it is understood that Connect has finally applied for an ISP license but Vodafone has yet to make an application.
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NOTE: This article was published in the Fiji Business Magazine (www.islandsbusiness.com) as: Vodafone Fiji US$50 million 3G upgrade...But where is the ISP license? pp 7,8, December 2005 edition.
Fiji Business is a publication in the Islands Business International portfolio and sold only in the Fiji islands as an accompaniment to Islands Business Magazine.
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