Q1. Mr. Richards,
FINTEL is a joint-venture between The Fiji Government
and Cable & Wireless UK. As an example for foreign
investors, how would you say a multinational like
Cable & Wireless has benefited itself from entering
in partnership with a Government owned company,
what is the level of satisfaction so far?
A1. Cable & Wireless has been here since
1902 operating the international communications
over the years up until 1976. In December 1976 the
government started participation in the company.
At first it took 20% of the shareholding and gradually
it increased its level to 51%. FINTEL as a company
was established in 1976. I have to say that it has
always been a very good relationship. Cable &
Wireless values the long-term relationship with
the Fiji government and has played a major role
in developing communication facilities in the country.
The main contribution is the power of the Cable
& Wireless group and its world wide reach, operating
in 70 countries. We can use those international
connections with the group to benefit Fiji as a
whole. This company is one of the oldest one in
the country.
Q2. FINTEL is Fiji's only licensed international
carrier. What are the existing facilities FINTEL
uses and what are your plans to improve those
facilities?
A2. At the moment we have access to the Southern
Cross Cable Network, with a full landing here at
our station in Vatuwaqa and a satellite earth station.
The plans to utilize all the capacity is to bring
into Fiji broadband transmissions and all the benefits
associated with broadband. This means all the applications
and the content including ISP, voice, ICT, etc.
We use the satellite for the thin routes around
the Pacific and also for domestic communications
to Rotuma for Telecom Fiji.
Q3. FINTEL invested 45 million FJD in the Southern
Cross Cable Network. What are the main benefits
that FINTEL has got out of this investment so
far?
A3. FINTEL has been able to offer to Fiji and
its users a very high capacity, high speed and high
reliability to international access. Our main customer
is Telecom Fiji as most of our traffic goes straight
to Telecom Fiji. We are the link between the domestic
operator and the world. We offer everything that
any customer might need as we have full access to
the Southern Cross as well as to the satellite in
terms of connectivity. We have so much capacity
available today that whatever the customer needs
we tailor our network to meet their requirements.
Q4. One of the reasons why FINTEL got into
the SCCN is because of the opportunity for multinationals
to establish call-centres, Tele-medicine or other
Tele-services in Fiji. What are the advantages
that Fiji presents for IT investments and what
is the response so far?
A4. We have always had cables running through
Fiji since the early 1900's. The first one opened
in 1903 and then we had the opportunity, when the
COMPAC and ANZCAN cables were taken out of service,
to have Southern Cross landing in Fiji. There was
no technical need for the SCCN to stop here but
we saw the opportunity with the government to ensure
a full landing of the SCCN. Now we can offer a huge
benefit to Fiji. We looked at the future growth
pattern of telecommunications not just in Fiji but
within the region and around the world and we saw
there was a need to bring in the SCCN to complement
the satellite network and also to open an alternative
and a higher bandwidth and a higher reliability
to our network.
A5. And what has been the response so far?
Q5. The response has been quite poor to date.
The domestic carrier has only 6MB of Internet capacity
and up until now there is no international Call
Centre operating in Fiji. We have had discussions
with several potential Call Centre Operators but
as yet nothing has come to bear fruit. We are still
talking with them.
Q6. What is your feeling about those negotiations
and about the future and eventual arrival of Call
Centre Operators into Fiji?
A6. I think that eventually we will get one
to start operating with us in Fiji. I believe that
at the moment there is some uncertainty due to the
2000 coup and due to a perhaps untrained workforce.
They are generally concerned about the infrastructure
and some of the Union activities in Fiji. But Fiji
has an English speaking population and the labour
rates are very low at the moment. We have good communications
in Fiji, high capacity, etc. We have plenty of space
and land available for renting at good rates. FINTEL
itself has lots of land which could be used for
Call Centres. We can provide the building, the land
and the connection to the SCCN very quickly. We
have plans already drawn up, the architect's drawing
and everything ready to be used for Call Centres.
There is no barrier at the moment to settle a successful
Call Centre in Fiji. For the audiovisual industry
that is looking at coming to the Studio City in
Fiji, they have everything, in terms of communication,
almost at their doorstep, including the access to
the Southern Cross over in Yaqara.
Q7. FINTEL is Fiji's only licensed international
carrier but now Telpac has brought in cheaper
costs. There is a controversy concerning this
issue. A telecommunications regulator said recently
that "the course now was to work and not
to fight". How do you think FINTEL should
react?
A7. We are the licensed operator to operate
international telecommunications and Telecom Fiji
is licensed to operate the domestic telecommunications,
both are exclusivities. That is the situation today.
Other players come in and start operating without
licenses and this contravenes the local laws and
regulations. We have to work closely with the government
to make sure that our license is observed and respected.
I think there is plenty of opportunity for competition
but I believe the network should be protected for
the time being because of the huge investment that
Telecom Fiji and FINTEL have made building and maintaining
the networks. We believe there is room for competition
in the ISP, potentially in the mobile market and
in the supply of customers equipment, that is already
liberalized and that has been liberalized for two
decades. Nobody rejects the competition as long
as it is "controlled". There's no point,
in the South Pacific Islands, in simply opening
the markets completely overnight. The markets are
very small and the cost to operate in the region
is higher than in Europe or in Asia so we should
be careful of how the competition is brought into
the market. We will welcome competition as long
as it is managed properly and it is in accordance
with certain processes and with the regulatory framework
in the country.
Q8. And what should be the government's reaction
taking into consideration the consequences that
this issue might have from a foreign investor point
of view?
A8. I think the government has to actually uphold
exclusive agreements. It is not good for the government
to open up to competition overnight when there are
still exclusive licences in operation but we are
happy and willing to talk to them and to work together
towards a managed path to competition. We have invested
tens of millions of dollars, Telecom Fiji has invested
hundreds of millions of dollars in networks and
we need some time to recover those investments.
Nevertheless I think both parties will be willing
to talk to the government to come up with a solution.
The market is small in the South Pacific. Fiji is
a bigger market place than Samoa, Tonga or the Solomon
Islands. In those smaller countries the competition
may not be the best way for them for the time being.
Fiji will welcome competition as long as it is managed
correctly by both the government and the foreign
investor. Because of the huge investment, we need
time to recover, and nobody will re-invest if you
overnight open up all the market. People invest
under certain conditions. If those conditions are
broken that would send a bad signal, the international
image deteriorates and people lose confidence in
investing if licences are broken. It sends out a
very bad message. But I will say again that we are
happy to negotiate and to discuss competition, ahead
of the termination of our current exclusive licence.
It must be an agreed process between the license
holder and the government of the day.
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Q9. Is there any
a technological improvement strategy that FINTEL
is planning towards rebalancing the tariffs?
A9. It has to take place anyway but at the moment
the domestic rentals are probably the lowest of
the South Pacific. One of the reasons is that FINTEL
effectively cross-subsidizes the domestic side from
its relatively high international tariffs. 53% of
FINTEL's net revenue goes straight to Telecom Fiji
Ltd. That effectively makes the domestic tariffs
cheaper. The long-term idea is to reduce the international
rates and on the other side you must increase the
domestic rates to balance National and International
communications. By balancing the domestic and the
international rates there could be a domestic increase
but that could be put in an attractive package.
Q8. Fiji, as compared to similar economies
countries like Jamaica or Mauritius, shows a low
investment rate. What are the reasons for this?
A8. Because of the political events in the past
there has been a concern about Fiji. This has a
long term negative effect on the economy and it
takes a while until the investors' confidence is
restored overseas. The economy is starting to recover
now, it is showing positive signs. Straight after
the coup there was a negative growth in the economy
but now it has turned around. We are now seeing
something like a 5% growth in the economy. It is
very important for investors' confidence to see
some economic growth. Tourism is coming up nicely,
getting back to pre-coup levels. The textile industry
had a heavy hit after May 2000 and it is recovering
and now showing strong signs. The sugar industry
is perhaps a point of concern at the moment but
it is being addressed by the government by the restructuring
program and hopefully it will turn around. This
has been the main sector in Fiji for many years
and there is still a future for it but I think it
has to work more as a private sector activity. Perhaps
it should be restructured as it is in Mauritius,
a very successful producer now in the sugar sector.
Mahogany is meant to play a vital role in the economy.
There is a huge potential in the hotel industry,
as a matter of fact there are a number of projects
in the pipeline that have already started or about
to start. All these things will determine an increase
of the economy in our country. Fishing is still
an industry with an enormous potential and the government
should increase the fishing licenses. But tourism
is definitely the sector that will keep the country's
economic growth.
Q9. "FINTEL Talks to the world".
What does FINTEL want to tell to the world, to
the International Business Community, about the
new investment climate in the country?
A9. Fiji is a country where it is easy to live
in. I have been here for three years now and I have
been in the region for around 20 years having lived
fourteen years in the South Pacific. Fiji has a
very high potential to attract investors. The English
speaking nature of the population and their easy
going nature. It is not difficult to set up a business
and the business climate has improved. The process
to get working permits and licenses has improved
significantly and there is plenty of space available
to start different businesses. About the land ownership
issue, the current government is actually doing
its best to improve the situation and there are
very good signs so far. FINTEL is helping the country
and the South Pacific region in telecommunications
development.
Q10. In what ways? You are going to Manila to
meet the Asian Development Bank, what is the purpose
of this trip?
A10. I am going there to hold high level meetings
with the Asian Development Bank because we are looking
at introducing a Fibre Optic Cable around the South
Pacific to link up the major Pacific Island countries
coming back into Suva to join the Southern Cross
Cable Network. This will give the South Pacific
countries a lot of capacity on global applications
like all the tele-services, tele-medicine, tele-education,
ICT, etc. Everything will be complemented by the
satellite networks which will also be used for domestic
distribution. The project is very ambitious. It
is estimated to be a US$ 450 million project to
link up 10 countries. We obviously need funding
for this project and we are active in pursuing this
as an infrastructure development for the South Pacific
Region. It is conceived as a development project.
We will need funding for it and one of the key players
we hope will be the Asian Development Bank. We have
already spoken to the European Investment Bank and
other potential funding agencies. We obviously also
need to consider local governments, telecom carriers
and telecom operators to contribute financially
to the project. It is still in a very early stage
and we are developing the whole concept. Very soon,
people could be really interconnected around the
South Pacific. This will engage all the governments
and will take their interests to another stage.
Q11. Is this the biggest project in your career
so far?
A11. I was in the Philippines, before coming
to Fiji, as the Project Director for a telecommunications
Service Area Scheme project costing over US$ 300
million for Eastern Telecommunications. This project
was for the installation of 300,000 landlines and
associated equipment and buildings in part of Manila
and north-east Luzon. I was also part of the team
which installed Mercury Communications' optical
fibre network around UK in the 1980's. However,
our project in the South Pacific is the biggest
project I have been involved with as it could cost
about F$ 1,000 million. It is a very ambitious project
and it will help to put the South Pacific on the
map as it will link up many countries in the region.
The reaction so far has been very positive, I have
spoken to a number of telecom carriers in the South
Pacific and some governments and the feedback I
have is quite affirmative. A Project Proposal Paper
will soon be distributed to governments and telecom
operators/carriers in the South Pacific to formally
seek their views on the project. Preliminary discussions
with the Asian Development Bank (ADB) were positive
but the ADB will require financial and traffic projections
before the next stage discussions are held.
Q12. This sounds like the summit of your career,
Will you retire after this, what else would you
like to do?
A12. No, I still have a good number of years
left so I hope to carry on. I have been involved
in telecommunications my whole life, or at least
during the last 32 years. I am employed by Cable
& Wireless from U.K and I have worked in eleven
countries around the world. This project in the
South Pacific is very exciting and I will be encouraging
it for the next few years. We will see how it develops
with the funding agencies' response. The key is
to get a number of high profile funding agencies
to help us as we cannot ask for the Pacific Islands
to pay the US$ 450 million. It would be too much.
We will try and share the cost around and get some
good funding in Europe and in Asia. There is potentially
a lot of money available for developing projects
in small countries and the South Pacific is no exception.
Europe is very active in helping smaller developing
nations to develop and this is part of that process.
I am sure that the Europeans, the Asian Development
Bank and other agencies are more than positive about
assisting us in the task to bridge the digital gap.
Q12. Mr. Richards, Could you tell us a little
bit more about your personal background?
A12. I joined Cable & Wireless in 1971 and
I have worked in Kenya (East Africa), Mauritius
& Rodrigues, Bahrain, UK, Solomon Islands, Diego
Garcia, Cook Islands, Thailand, Vanuatu, Philippines
and Fiji. One of the most challenging moments was
the building of the optical fibre network in UK
and also the project in the Philippines, where we
planned to install 300,000 telephone lines in Manila
and in north-east Luzon. That was a very difficult
project. Once the South Pacific project comes out
it will be the most exciting of my career so far.
Winne cannot be held responsible for unedited
transcription.
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MR PHILIP
RICHARDS
