Telikom PNG ready for broadband and shaping destiny

Dionisia Tabureguci

Telikom PNG, snipped and re-shaped by a market forced to open to new competition not too long ago, is gearing itself to take on Papua New Guinea’s emerging broadband era.

The fully state-owned telecommunications company falls in the portfolio of the Independent Public Business Corporation (IPBC), an entity set up in 2002 to independently hold the majority of state-owned commercial assets and to improve their commercial performance.

Last month, IPBC managing director Glenn Blake met with Telikom PNG management and was told the telco had begun to formulate corporate strategies to capitalise on government initiatives flowing from its ICT policy and plans for a national broadband network.

“It is important for Telikom, the country’s premier integrated telecommunications company, to continue to restructure and grow its business to provide improved services to the corporate sector and the general public,” Blake said.

The government, he added, will support initiatives by Telikom PNG to “capitalise on opportunities within a strongly competitive environment”.

The ball, however, is in the telco’s court with calls made by the IPBC chair, Gerea Aopi, for the company to shape its own destiny, especially with the new broadband network coming online soon and the simply harsh dictates of a fast changing world of telecommunications.

The proposed national fibre optic cable is being built as part of the PNG LNG project and according to the IPBC should be completed by the end of next year.

In December last year, the National Executive Council had agreed to invest in the cable and gave IPBC the go ahead to borrow US$35 million (Kina 92 million) to fund a 41.67 percent stake in it.

The initial cost of the broadband project is slated at US$60 million and other partners are the Southern Highland Government (8.33 percent), Oil Search (16.67 percent) and a 50 percent joint venture between the Esso Highlands Government the Southern Highlands Government (33.33 percent).

“Completion of the 750-kilometre fibre optic cable will provide an unprecedented opportunity for a seamless domestic and international high quality data highway that would bring beneficial impacts for the country,” said Blake.

Telikom PNG indicated it was ready to take on PNG’s new broadband era, and a “Change Management and Transformation” programme was a starting point—it was already underway.

“Much progress was made in all areas last year within the Telikom goal of raising revenues by 20 percent and reducing costs by around 15 percent,” said its CEO Peter Loko.

He added that discrete business units have been set up to tackle specific corporate goals in the three years to 2013.

PNG Telikom’s goals however would depend largely on funds made available to it, as priority projects have already been identified, according to Loko.

The company in the meantime would continue to drive value through its existing copper cable network, which supports the current ADSL Internet services in PNG homes and businesses.

Telikom’s move forward is coinciding with the setting up of a project steering committee within IPBC to drive further progress in PNG’s telecommunications industry, identified as one of the strongest growing parts of the economy.

“Benefits of this process should accrue to the corporate sector and the economy and to the people throughout the country,” said Blake.

“It will help sustain the high economic growth rates the country has enjoyed in recent years.”

Telikom PNG was incorporated in 1955 to own and operate PNG’s telecommunications network.

It enjoyed a monopoly in the industry until 2007 when competition was introduced in the mobile telephone segment of the market.

Its core fixed line business accounts for 50 percent of gross revenue while other revenue streams include data transmission services to the business community and its 50 percent stake in B-Mobile, the cellular telephone business that is fiercely competing with newcomer Digicel PNG.

US company targets PNG’s rare earths

A United States-based company specialising in rare earths was in Port Moresby to hold talks with the Mineral Resources Authority (MRA) on its plan to set up an exploration site for the minerals and related processing facilities.

Rare earths are elements that occur in a range of minerals. They are sought after by manufacturers of electronics and hi-tech items such as cell phones, satellite imagery, military hardware and software and other everyday household and personal items.

Currently, China is the world’s largest supplier of rare earths, producing 90 percent of the world’s supply and has been cutting export quotas, angering the Group of 20 biggest economies.

They have demanded for a market based framework on the supply of raw materials and have criticised China’s quota policy on rare earths.

Karel De Gucht, the European Commissioner for Trade, said the rapid development of emerging nations will squeeze the supply of raw materials and governments need to establish transparent trading rules.

PNG has generated a lot of interest from international mining companies and investors who are seeing PNG as a potential market and production centre of rare earths.

The traditionally mined gold, copper and silver would soon be diversified with nickel and cobalt from the Ramu Nickel Co project and molybdenum from the Yandera project.

MRA managing director Kepas Wali said the interest was encouraging especially with the new shift towards re-entry of more major and exciting prospects to focus on rare earths.

“The prospects for rare earths in the country, while it is a new shift in mineral interest, are no doubt an exciting opportunity to further broaden the mineral sector and it can only be good for PNG.

“The MRA is looking forward to assisting and facilitating the entry of investors willing to diversify our mineral base, thereby creating and sustaining wealth for the nation in support of the national government’s Vision 2050,” Wali said