August 07, 2013

Vodafone pull out

Differences with BeMobile and Fijian telco sees contract ripped up
By Alexander Rheeney

VODAFONE Fiji Limited has pulled out of Papua New Guinea, just four months after agreeing to manage the country’s second mobile phone carrier BeMobile.

The withdrawal of the Fijian subsidiary of the global telecommunications company dashes hopes by PNG mobile phone users for another carrier to directly compete with Irish-owned Digicel (PNG) Ltd and reduce phone and data rates.

Sources within the telecommunications industry told the Post-Courier yesterday that the plug was pulled due to ongoing differences between BeMobile and Vodafone over the use of a contractor to roll out the joint-venture’s new infrastructure.

Prime Minister Peter O’Neill confirmed the split yesterday when asked by this newspaper at a media conference to confirm the report, saying governance issues relating to a contractor could not be resolved.

“Yes as you know we have signed an MOU with the Fiji National Provident Fund for them to become partners with the state, through IPBC, in developing the BeMobile network in the country. Unfortunately, let me say this, the negotiations have been difficult in the sense that there were management issues about some contractual obligations that we as a country felt needed to be negotiated properly because of governance issues. Unfortunately those issues were not able to be resolved,” he said.

“We have an issue with a contractor who has got issues with government in Papua New Guinea and that contractor needs to be cleared properly before it conducts further business in this country. We have an existing contract with that contractor.

“At present it is going through some legal issues, both here and in Singapore. Those governance issues need to be resolved properly.”

The FNPF has been advised of the PNG Government’s decision not to proceed with the joint-venture through the office of the Fijian Prime Minister according to Mr O’Neill.

Vodafone’s premature exit from PNG’s growing telecommunications market opens the door for potential investors, however the PM has indicated that the job to resurrect BeMobile’s fortunes will now go back to the IPBC and the State-owned Telikom PNG Limited.

When pressed by reporters to give more details on the contractor at the centre of the disagreement, Mr O’Neill said he did not want to expose to State to potential litigation and would rather leave it to the lawyers to sort out.

The Fiji National Provident Fund has a 40 per cent stake in the joint-venture with the State-owned Independent Public Business Corporation retaining 51 per cent.

The other nine percent is held by other smaller shareholders including the PNG Sustainable Development Program, Nambawan Super, Nasfund and GEMS (PNG) Ltd.

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