www.lifhaus.com.sb

Lifhaus has spent the early parts of this morning reading through the Bills & Legislation Committee's report on the new telecommunications bill.  Certain interesting recommendations were proposed by the committee, mostly favoring Digicel's suggestion for amendment to the Telecommunications Bill 2009.

However, Lifhaus noted with particular interest the submission by Digicel that "the business case already results in a very low return rate when compared with the general expectations of global investors in the mobile sector."  Therefore, Digicel argues that the Solomon Island Government's insistence on a 2% Universal Service Levy calculated as a percentage of the provider's gross revenue is not feasible as "...universal access levy of greater than 0.5% seriously undermines the business case in the Solomon Islands."  The Universal Service Levy was imposed by government to ensure that telecommunication services will still reach the non profitable sectors in the country.  Digicel also strongly argues that the determination of this should be factored according to population and GDP.

Our Telekom, however, stated in its statement that it currently pays 7% of its gross revenue as license fee to government which naturally poses the questions on why Digicel does not see this as a feasible option.  Futhermore, Lifhaus can assume that while competition may provide customer's with better options and services; the ability to influence government policies will be largely affected by the players in an open market and so government must ensure that its regulator is able to protect its interests and that of its people.

Our Telekom has always maintained that doing business in the Solomon Islands is wraught with difficulties "...that are unique to the Solomon Islands."  Many have disagreed and continue to insist on service delivery universally.  Many more view Digicel as a "knight in shiny armour" to the rescue.  True to its word, Digicel will no doubt deliver a quality of service that will be unparralled but it has also admitted that the business environment and the returns it expects do not quite meet its expectations.  This is the reality that Solomon Islanders will inevitably face.

For all its promise of glitz and glamour, it is certainly refreshing to see Digicel admit an obvious truth while promising to deliver "state of the art telecommunications infrastructure" to the Solomon Islands.

In other interesting news, Our Telekom's submission to the Bills & Legislation Committee revealed that the government has been the beneficiary of more than 237M in a myriad of tax, dividends, license fee and duty since 2004.  Shareholders, Cable & Wireless and Solomon Islands National Provident Fund have received more than 93M in that same period.