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Telstra has received clear signal of change in policy direction from Canberra
Last week, an unprecedented $43 billion plan to build a next-generation national fibre network was announced by the Australian Government. The announcement is a change in direction by the Government, which is now seeking a public-private partnership to deploy a fibre-to-the-home network covering 90% of Australians in the next eight years. The paper also outlines new measures the Government and regulatory bodies will pursue to foster greater competition. The move has great implications for incumbent operator, Telstra, now facing a very different competition landscape and downward pressure on its stock price.
A key new addition to the toolkit of regulators is functional separation, where the incumbent operator (owner of the network) is required to create a separate network unit which handles essential network services to other providers and to the incumbent’s own retail units at the same prices and using the same non-price terms and conditions and processes.
Making sense of what’s going on in Fiji’s telecommunications sector is very important to understanding the new opportunities that are now presented.
Without much public debate, 13 years ago the government of Sitiveni Rabuka entered into an exclusive access agreement with ATH.
The arrangment gave monopoly status to providers in phone and internet services.
Exclusive license has meant immense profits for shareholders of ATH (which include the government’s minority stake) while chaining users to high prices and terrible service.
With assistance from World Bank officials, the interim administration has negotiated a payment to satisfy the shareholders of the existing companies.
Once this is approved, the government will approve the applications of providers who can offer services in internet, mobile, and phone services.
Already local partnerships are forming and foreign companies like Digicel are gearing up to enter the Fiji market.
Competition in this area will dramatically lower prices and offer new services.
The people of Fiji stand to gain.
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