Mr. Yee, for those readers who don't know ATH we would like you to give us a brief description. In what companies does ATH at the moment hold a significant presence in Fiji and what is the mission of this institution?

ATH is Fiji's principal telecommunications company and is one of the country's largest companies. Through its investments and provision o direct services, ATH offers a broad range of telecommunications and information services, throughout the Fiji market. The principal activities of the ATH group include: the provision of local, national (trunk) and mobile telephony; internet and data related services; and provision of directory services. In addition, ATH has rights to manage government's 51% shareholding in FINTEL, Fiji's current sole provider of all international telecommunication services. ATH was incorporated as a public company on 10 March 1998 under the Companies Act 1993, and commenced operations on 16 December of the same year. It was set up to consolidate government's investments in the telecommunications sector as part of the public sector reform programme. The government currently owns 34.6% of the issued shares of ATH while the FNPF has increased its shareholding to 58.2%. Telecom Fiji Limited is a 100% owned subsidiary of ATH. Vodafone Fiji Limited is the country's sole provider of a mobile telephony service, using the Global System for Mobile (GSM) standard. It is a joint venture between Telecom Fiji Limited (51%) and Vodafone International Holdings BV (49%). Fiji's telephone directory is published by Fiji Directories Limited, a joint venture between Telecom Fiji Limited (90%) and Edward H O'Brien (Fiji) Limited (10%).

Mr. Yee, ATH has a significant presence in Telecom Fiji, Vodafone, Connect and other companies.. Could you explain to us what is the international presence of ATH and also your future strategy of diversification?

At the end of 2001 we were invited by the government of PNG and its consultants in an international bid, which we made in conjunction with Steamships, a subsidiary of John Swire and Sons. We concluded the deal with the previous government. The new government is developing its own privatization policy. We are awaiting the outcome of that process. In the mean time we are looking at other opportunities generally in the South Pacific Region. This area is our main expansion strategy because we think that perhaps larger companies are not so interested in this area. This group looks at the investment prospect so we will be looking at any business that has a telecommunication component which we think could add benefits to our shareholders. This is how we will try to grow. We were looking at "Content" earlier but now I think it is a specialized business and, learning from others, we are very cautious on "Content". If it creates a new business with real value, we might be interested in it ie, if it can create wealth to our shareholders. We are currently investigating the possibility of "Call Centers" based in Fiji using the availability of the Southern Cross Cable.

Companies establishing a call center in Fiji will find advantages like the time zone, an English-speaking workforce, etc. Would ATH be a partner for those multinationals?

All the benefits to establish a Call Center in Fiji can be further explained by the Fiji Trade and Investment Board. But I agree with most of the aspects that they present as advantages in this area. I think that in the end, we will have to look at the viability of the business. The company would have to be a viable business in the long term and then we would consider being partners. But we are also interested in doing it ourselves if we feel confident enough to do so. Developing model call centers first and offering the services ourselves after we have successfully demonstrated it, would be the approach. It is a potential area to examine but the cost components needs to be managed.

Telecommunications is a sector that has gone through rough times lately. What is your opinion concerning the future deregulation of this sector in Fiji?

I think the world market in Telecommunications speaks for itself. It has been a disastrous year for a lot of Telecommunication companies so we will see how all this turns out because it has been a very interesting year for us. In Fiji, very few people actually entered the market. Perhaps the economy is too small and when you are a big company and you have only a small market it might not interest you too much. This is the reason why we saw this as a good opportunity for us and this is why Telecom Fiji was developed the way it is today. Whilst we welcome foreign investors in various sectors of Fiji's economy and the infrastructure is ready for it, in Telecommunication we think that Telecom Fiji is meeting the challenge but it will take time to develop the communication infrastructure of the country. They are working on a VSAT project for the rural area to provide the access they currently don't have. The telephone penetration rate today in Fiji is around 12% and any competitor will not focus on bringing that access to those areas, as it is not economically interesting for them. How this sector can be further developed must take into account the benefit of both, the people of Fiji and the shareholders. It is a challenge for us to make sure that we will be ready for the moment when Fiji is ready to open up the Telecommunication sector, so Fiji will benefit further from it. But we believe that, strategically, if you control the access you will control the business so we are not apprehensive of any future competition arriving in the country. This sector is complexly structured in Fiji and companies for many years have been controlling segments of the market. For example, the international and domestic are separately licensed. I think ideally these two segments should be merged.

In such a sector that changes very quickly, telecommunications and technology, how is ATH making sure that it keeps being a profitable company?

We do not follow the hype, we keep our feet on the ground. We are realistic, we do not go into high volatile areas. In fact, the company is far less volatile today than many of our counterparts in the world. We have a positive growth and this is very unusual in a time when the analysts are working on the basis that the least lost is the best.

This is very unusual in the telecommunication sector and also in a company in a developing country. ATH is a company in a developing country and in the telecom sector showing positive figures. What is the secret recipe for this?

There is no secret. You have to have a good P/E ratio and a good revenue stream. You do not chase after dreams. The previous telecommunications problem was caused by a lot of dreams, a big hype that never happened. I think that in ATH there has not been too much capital expenditure and no excessive debt.

Is ATH setting a new example of management in Fiji?

Yes, we try to practice good corporate governance. We try to follow capital market principles. We believe that an entity that is well managed will produce good results. One of the main things we are looking at here is the attitude of the people towards a successful business. During previous years, there were too much discussions on benefits to staff against what the company should be trying to do. So you need to get the company to create wealth then discuss about benefits. There was too much argument before creating the cake. As an example, recently we established the employees share option scheme to reward workers for their loyalty and dedication to the company. The higher the value of the share, the more they benefit.

Will ATH be providing infrastructure for improvement?

We cannot invest in every area. We only invest in the area where we attach strategic importance. If a competitor comes around in a small economy like Fiji it would be very costly to put up another infrastructure. In that situation, ATH will have a big advantage if it has the infrastructure and this is a strategic consideration. One of the things that is of great concern for the people of Fiji is the ability to have cheap telephones. We cannot see any competitor providing it at the cost we are able to at the present time. Fiji has one of the lowest local telephone calls and access rates in the region. ATH is proud of this. For national and international, the rates could fall on the tariff being rebalanced. Other players should all contribute equitably to a universal service fund to maintain these cheap below cost rates.

Generally speaking about Fiji's economy. If we compare Fiji with countries like Jamaica or Mauritius, we can see that they have grown to achieve the 25% of GDP investments a year desired for a developing country while Fiji presents a flat growth rate. What are the reasons for this?

The Government has previously worked on the basis of high recurrent or operational costs so they haven't had the opportunity to improve the country's infrastructure. I think that the current Prime Minister is in the right track to address this issue. We have seen more emphasis on capital expenditure in recent budgets. Pressure from staff unions has increased disproportionately to the amount allocated for salaries and remuneration. The current government is sending a positive signal by trying to redress this.

How would you describe Fiji as an investment destination and as a place to do business and is the cost of telecommunications a hurdle to doing business in Fiji?

We are proud of Fiji's good communication to the rest of the world and within the country and the cost is very comparable. Many years ago people used to say that if you wanted to build a house, the cost of cement was too expensive. Then people started pointing fingers at the only cement company in the country. Then, the cement company put on every bag of cement, the percentage of cost of the cement which goes into the total cost of the house and it showed people that the cement component is actually very low. What is happening here is that the business community is very vocal. Currently, they focus on all the components of cost in business that are rising and they make it out as the reason why they are not investing. In my view, the cost of telecommunication is not the reason for not investing. They are now getting more value. Perhaps that is why they are spending more. They would look at the cost of electricity, water, etc. and the interest cost as costly components as a reason for not investing But interest cost has now come down from the time when they used to say that it was high. So that argument is gone. They then focus on something else like Telecom cost. What goes into the investors mind; what makes them decide to invest or not, is quite complex. Some invest in Fiji because they like the life style. That is a big consideration, I think. But in the case of the telecommunication costs, we have to run the business profitably for our shareholders. To invest, we must get a return for our shareholders. We cannot do it for free. For instance, what is happening is that a lot of people expected the Internet to be for free. Because it may be free or cost less overseas, it does not mean we can make it free here. We do not have the resources of a huge Universal Services Fund to subsidize this. Unfortunately the traveling business people compare what they get in Australia, New Zealand and in the US and they expect the same rate to be here. We try our best and I think we have done quite well in terms of the ability to provide high technology at a reasonable cost. If you look at the growth of people using Internet or the email it shows that the technology is working and is being used. They hoped that deregulation would help but in regard to Internet services, many licenses have been issued, but none of them have started so far.

Fiji is a nice place. I have lived here all my life. I have been to Canada, Australia and the US and I came back. I love this place, it is a good country. It is a very safe place. The risk is very low despite the coup. My father said that this is the safest place on earth because fierce conflict is unlikely in this place. There are certain sectors that offer good opportunities for foreign investments like call centers. I would welcome them but I do not like to hype this. The infrastructure development is going through the right phases but there is still room for improvement for potential investment. There are good opportunities in the Internet related arena and there is certainly room to bring in expertise from abroad.

What would ATH add to a partner and what would they ask the partner in exchange for instance in the case of Call Centers?

In the case of Call Centers we would provide the building and the seats. The partner could bring the software and the business contracts. We are open to the various proposals that can add value to us. We are committed to improving the telecommunications structure towards the development of Fiji and there is a major project to cover all the rural and remote areas of Fiji that will increase the penetration rate dramatically.

Can you give us a general overview of the last 5 years of the Telecommunication sector in Fiji and of yourself?

It has a lot to do with the Public Sector Reform. I have spent many years trying to reform the public sector. I believe in helping to stabilize the country by having a larger middle class people who own shares. The telecommunication sector is the one that took the final step to privatization. At first we were a government department of Post and Telecommunications. This department used to receive allocations from the public budget. Every time they wanted to extend the network they had to apply to the government for capital expenditure allocation. Then, the Public Sector Reform came and Telecommunication was one of the first candidates. There was a lot of unhappiness amongst the staff to the changes. They perceived their interests were not protected, they thought they were going to lose their jobs. I went in to stabilize the situation and took it forward. The company later on went into mobile phones with a joint venture with Vodafone. In 1998, the final step was taken and we actually sold shares and early last year the government shares were further sold so the public ownership of the sector became more widespread. We are very optimistic about the outlook of the sector. We hope to bring more efficiency gains and more value to our shareholders. The selling of the shares and privatization has been achieved in the last five years. One of the huge success stories that actually sends a positive message to the international business community.

And how do you see yourself in the next 5 years?

. We are very stable. We will be able to deliver to the shareholders a steady dividend. We do not expect a spectacular growth, just a little. More growth depends on the opportunity we have with foreign investors. Compared with other telecom companies, this one is stable.