CLOAK AND DAGGER CLOUD FIJI TELECOM MARKET

By Dioinisia Tabureguci

SUVA, Fiji (Islands Business, August 2006) – The brewing cell war in Fiji's mobile telephony market took the shape of a deadly wedge cleverly twisted into the heart of the Ba province.

So deadly was the poison that it has polarised its echelons of chiefs and rattled the seams of Ba Holdings, the province's commercial arm, culminating in what could be described as a well executed coup d'etat of the investment company's management last month.

As Fiji Islands Business followed the train of events that unfolded, it didn't take long to realise that whatever was going on had many sinister elements to it.

This was cloak and dagger material, aptly described by one of the parties as being "deep, dirty and dangerous".

What should have been a simple and straightforward process of either refusing or awarding mobile telephony licences to interested operators instead turned out to be an intricate web of backhanded politics, clandestine lobbying and propaganda against Ba Holdings Ltd and its mobile operator partner, Digicel (Fiji) Ltd, the local subsidiary of Jamaica-based Digicel.

This running game of furtive manoeuvres has its roots in the now lucrative mobile telephony market within which reigns Vodafone Fiji Ltd, the joint venture between Telecom Fiji Ltd (TFL) and the European-based Vodafone International Holding BV.

In what is now a point of contention that is before Fiji's High Court, Vodafone Fiji was subleased an exclusive licence by TFL in May 1994.

According to information contained in the prospectus of TFL's parent company, Amalgamated Telecom Holdings, when it floated its shares in 2003, "TFL, in exercise of the rights and powers conferred on it, granted Vodafone...the sole and exclusive right and authority to the exclusion of all others (including TFL), to establish and operate a cellular mobile telephone system in Fiji and its surrounding waters."

This "exercise of rights and powers" became an issue in December last year when the government announced its intention to begin its roadmap plan for the industry with the granting of transitional licences to incumbent carriers and new mobile operators through an open and competitive process.

Behind the scenes waiting in the wings were two applications for mobile telephony business. One was from Pacific Connex Ltd (PCX), an IT company that was said to be jointly owned by the Native Land Trust Board's investment company, Vanua Development Corporation, (VDC) and Fiji-born businessman Ballu Khan and his Fiji-registered Tui Management Services Ltd.

Pacific Connex began business in Fiji in 2004, initially as an exclusive reseller of SAP software. In April 2005, it had indicated its desire to operate a 3G mobile telephony wireless network.

Because of the alignment of PCX with NLTB, through VDC, it was put forth by the NLTB as a company that represented the interests of the indigenous people through the 14 provinces by virtue of NLTB's guardianship of the country's native lands.

The other interested party was Digicel, a Caribbean outfit, owned by Irish telecommunications entrepreneur, Denis O'Brien.

Backed by the American Overseas Private Investment Corporation and Citibank as its two major financiers, Digicel ran rampage in the Caribbean where, after a presence of five years, it had toppled incumbent carriers there and had linked 20 countries across the archipelago to its network.

Its main business is the provision of mobile services using Global System for Mobile Communication (GSM), a technology that enables global roaming. It is being described as the fastest growing wireless technology in America.

In April this year, Cabinet approved in principle the two applications.

Minister for Telecommunications, Isireli Leweniqila, told parliament on June 14 (2006) that the approvals "were subject to the outcome of Vodafone Limited's court injunction restraining the issue of mobile licences to the two companies" and did not mean the licences had been issued.

Yesterday, when contacted Leweniqila confirmed the two companies had yet to be issued licences. But government, he said, was awaiting a decision of a pending High Court case to determine whether Vodafone has an exclusive mobile licence before it could issue their Digicel and Pacific Connex licences.

Rumour mills were in full swing yesterday. One such rumour circulating mentioned a meeting in the west of a senior government official with a top Digicel official, in which the senior government official allegedly encouraged Digicel to dump Ba Holdings as its partner and go with NLTB, and if that gets the nod, they could be issued a licence immediately.

When Fiji Islands Business asked Leweniqila about the rumour, the telecommunications minister said: "You hearing too many rumours. They're just rumours."

It was only in the last two months that the pressure mounting behind the scenes in relation to these two applications came to the fore when PCX began a campaign to lobby the government not to give Digicel a licence.

Its argument being that the Fiji market was too small to support more than two operators. If that was a discretion the market would in time be allowed to make, as some believe it would, PCX was not going to let it happen.

Since one of the requirements in the government's approval of applications was that foreign companies should secure local shareholding, PCX's next target was Digicel's local partner, Ba Holdings, headed by former politician Isimeli Bose, who had been instrumental in getting Digicel on board.

Through NLTB's newest board member, Ratu Tevita Momoedonu, a chief from Veiseisei in Vuda and therefore of the Ba province-PCX's "right connections"-saw the publicising of Ba Holding's $16 million debt with claims that the company was facing a financial crisis and therefore needed cleaning up.

Momoedonu had been the chief signatory of a letter dated June 29, 2006, sent to the Minister of Communications, Information and Media Relations asking him, among other things, to withdraw the approval in principle given to Digicel Fiji by Cabinet.

In another letter dated, July 13, 2006 and sent to Prime Minister Laisenia Qarase, Momoedonu had stated that the people of Ba, its chiefs and Ba Holdings were not happy with the Digicel joint venture.

They said the directors of Ba Holdings were not authorised to agree to a joint venture.

The letter also asked Qarase to refrain from giving a full licence to Digicel and grant it only to PCX.

This issue reached a high point when an extraordinary general meeting for Ba Provincial Council held late last month turned into a witchhunt for Digicel supporters in the camp and culminated in the sacking of the Ba Holdings board and the appointment of a new one headed by Momoedonu.

A few days later, Bose was relieved of his duties as chief executive of Ba Holdings.

When this edition went to press, Bose had taken the matter to court and the new Ba Holdings board had yet to make its intention known on whether it will continue its partnership with Digicel Fiji.

For its part, Digicel Fiji indicated it was here to do business and would not like to be dragged into the internal politics of Ba province. However, it was prepared to take legal action if provoked into it.

It also said it had been approached by many other local parties for a joint venture and if its partnership with Ba Holdings fell through, it would consider aligning itself with another party.

PCX, however, had indicated it would continue to lobby for government's support not to grant Digicel Fiji a licence.

August 25, 2006

Islands Business Magazine: http://www.islandsbusiness.com

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