Q1. Mr. Thompson,
you were Managing Director of Fiji Post and
Telecom Ltd. back in 1996 when Telecom separated
from Post and you became CEO of the renamed
Telecom Fiji Ltd. in March 1999. Four years
later, what would you point out as the most
significant or more challenging moments of
the company so far?
A1. The separation itself was the most
significant event. Before that, we were part
of the colonial Post and Telegraphs department
that became Fiji Post and Telecom Ltd. in
1990 and then split up in 1996. Telecom Fiji
Ltd (TFL) was a 100% Government-owned Company
and it became incorporated into Amalgamated
Telecom Holdings Ltd (ATH) in early 1998.
Amalgamated Telecom Holdings was a wholly
owned government corporation until the FNPF
bought 49% of ATH in December 1998 after an
international bidding process. Another significant
moment was the coup of May 2000, which caused
a lot of strain within the country and like
any corporate citizen, TFL was not immune
from the event that took place.
Q2. At the end of the year 2002 Telecom
Fiji achieved a telephone penetration rate
of 11.7 per hundred populations. This figure
is close to the 13-14 per hundred population
observed in developing countries like Fiji.
What is your objective for 2003 concerning
penetration?
A2. We hope to achieve 12.5% Tele-density
by the end of this financial year, which is
March 31st. I think we will probably get from
12.3% to 12.4%.
Q3. Telecom Fiji turnover increased 4%
above previous year but the Net Profit even
more, what are the reasons for this growth
in profitability?
A3. Better cost control. Our revenue did
not increase so much but we were able to improve
our cost control. This was achieved through
more effective processes, better response
to installing lines and also to repairing
faults more quickly.
Q4. Turning the company into more agile
entities is important, as the business environment
will eventually move into deregulation.
What are the diversification and the specialization
strategy of Telecom Fiji for the near future?
A4. Last year we created the Internet
Company, Connect. Further back in time, when
we were still FPTL, in 1993 we separated out
the directory operations and created the Fiji
Directories as a separate subsidiary. In 1994
Vodafone Fiji Ltd was set up as a joint venture
with Vodafone UK to pursue the development
of the mobile cellular business. We are now
in the process of developing two further companies,
one to handle the (CPE) Customer Premises
Equipment, this company is registered as XCEED
Pasifika Ltd. and will formally start operating
as a separate company from 1st April this
year. We have already recruited a Chief Executive
having gone through the process the last two
months. The other company is the Card Services
Company, which will be called Transtel, a
Chief Executive Officer has also been already
appointed. That will also formally start operating
from 1st April. Those are the two immediate
changes that will take place. Particularly
the CPE Company, XCEED Pasifika Ltd., will
remove quite a big part of the operations,
all the customer premises equipment. It handles
all the equipment used to connect to the network,
PABX, telephones, all the key systems, what
you need to make use of the network, it is
a whole range of equipment that is quite a
big business in itself. That one has been
a deregulated business for the last twelve
years, anyone could provide that equipment
and service. It has not been an exclusive
business, as is the business of operating
the network. There is an exclusive monopoly
given in the domestic network and another
monopoly for the international traffic which
is with FINTEL. The equipments used to enable
all this to happen have been a deregulated
area for many years. Both companies, XCEED
Pasifika Ltd. and Transtel, will set up their
own boards to manage each business. XCEED
Pasifika Ltd. will be able to sell to anybody.
They have been set up to do business in Fiji
but there is nothing that stops them from
seizing opportunities available in the Pacific
region. They will be able to decide for the
future themselves. Transtel operates the pay
phone business, all payphones on the streets.
It also operates the prepaid cards. That equipment
is housed in the telecom premises. All the
information is stored in their platform housed
in the TFL exchange and Telecom will continue
to manage that on behalf of the card company
but they will actually own it. You can buy
a card from many retailers for denominations
ranging from F$3 to F$50 and make calls on
it using any telephone on a pre-paid basis.
It is a very popular commodity worldwide now.
We tendered it out and at the moment our supplier
is an Australian company that manufactures
the cards for us.
Q5. How would you describe this government's
will towards improving the telecom Infrastructure
in Fiji?
A5. The government expects the Telecom
Company to promote and develop the proliferation
of the telecommunication system in Fiji. There
are areas of the country that are expensive
to service because of remoteness so beginning
from the days when we were a government department
there has been a system of cross-subsidization
in its operation. We have an arrangement where
the urban users, both business and residential,
tends to pay a higher price in order to make
it possible for telecom to service the periurban
and rural areas. We have something like 350
rural stations, which we operate in but most
of which are unprofitable. This is being made
possible because of this cross-subsidization.
This is one of the issues that have to be
addressed before we go forward with the deregulation
and we are dealing with the government about
it. There has to be a rebalancing of the tariffs
because at the moment the provision of the
telephone access line to homes and businesses
is presently not being charged at its cost.
It came from a time when it was a government
policy to encourage lines to be made available
to homes and businesses, now it needs to be
raised to a more cost-based level and at the
same time the price of the call can be brought
down. It is a sensitive issue and we need
to work very closely with the government.
We have made submissions and they are being
considered at the present time. It is an arrangement
that has to be completed to establish a 'level
playing field' before you open up the market
for anyone to come and compete.
Q6. Telecom Fiji, in partnership with Fujitsu,
made a great investment into Easytel back
in year 2000. How did the collaboration with
Fujitsu start? Can we expect or are you looking
for a new partnership in the near future?
A6. Fujitsu has been a supplier of equipment
to Telecom and its predecessor for many years.
We have been using Fujitsu wireless equipment
so their involvement in the supply of CDMA
Wireless Local Loop is nothing out of the
ordinary. We needed to have a Wireless product
and Fujitsu at that time was developing one
using CMDA technology, a more modern system.
Because of the type of business we are and
we have always been closely involved with
foreign companies. All of our technology is
imported. We have Ericsson, the Swedish company,
that provides all our exchanges, that is many
millions of dollars of investment. We have
used equipment from Fujitsu, Nokia, NEC, etc.
We have IBM equipment in our computer system.
If you look at the equipment that operates
our network it is the same equipment used
worldwide. We have had this for a long time
so we have had a good relationship with these
organizations. We are undertaking a satellite
project at the moment and that is taking us
into a new area of telecommunications. We
have not been closely involved in satellite
technologies before although we have a station
in Rotuma (the northernmost Island of the
Fiji Group). The only way to get there has
been through satellite but we used Fintel
gateway to handle that. This time we are actually
putting up our own hub station to be able
to go through satellite and link with remote
islands, the Eastern islands particularly.
For that we will be using equipment which
we have not used before.
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Q7. Telecom
Fiji supports the locally based tourism infrastructure
with AprisaTM to provide high-speed Internet
to many islands throughout Fiji. What are
the next steps in Telecom Fiji's network expansion?
A7. The main one is the satellite network
because the AprisaTM project is really to
give much more bandwidth and higher speed
connectivity to these resorts. There are resorts
that will still be beyond the reach of this
AprisaTM equipment and here is where the satellite
project will come in. Our biggest expansion
area will be through the use of the satellite.
It is the biggest project we are on at the
moment.
Q8. Concerning Fiji's economy. Fiji needs
to achieve 25% of GDP investments a year.
Fiji presents a flat growth rate of investment
in the last two decades. What do you consider
are the reasons for this?
A8. We had a couple of disruptions in
our growth pattern in the events of 1987 and
May 2000 coups. Not that these are entirely
responsible for the flat growth rate but it
seems to me that in the early 80's growth
was moving along quite well. When the coup
happened in 1987 what took place was a considerable
dent in public confidence and investor confidence.
I think that if you look at the period of
1980-2003 and take the average, the growth
will be low but if you look at the position
prior to 1987 the investment growth was fine.
1987 had a negative effect taking it back
down and it took us some time to get it back
up again and by the time it got back up onto
a better level many years had passed and then
the May 2000 coup took place and knocked it
back down. At periods when things were going
well the investment was also reasonable.
Q9. Fiji's negative reputation among
foreign investors is difficult to change.
What would you like to tell to the International
Business community about the new investment
climate in the country and about the opportunities
they can find here?
A9. I think Fiji has been making strong
efforts in the last few years to make the
investment climate a lot more attractive.
Incentive packages have been provided, incentives
that for instance in the Audio Visual industry
are good if not better than in any other part
of the world. Fiji has other advantages in
terms of its location, the type of climate,
the environment, the people, etc. We have
the ingredients and now the legislations in
place, with the Fiji Audio Visual Commission
itself and our staff, with competent people
doing promotions and going around getting
themselves familiar with the industry. We
see already that there is quite an encouraging
interest. In fact, this week there has been
a visit by quite a prominent person to see
what the situation is here. On the general
front, the government has also improved the
FTIB and various other means to publicize
what we have and there has been far greater
interest and projects gotten off the ground,
particularly in the tourism area and the manufacturing
as well. That indicates that things are moving.
All our institutions certainly are doing what
they can to encourage this process. We have
all the ingredients, it is just a matter of
getting them together, and packaging them
and it will be able to drive its own sort
of attraction. In many other areas, traditional
industries like Sugar; things seem not to
have such a bright prospect for the future.
We do have many opportunities in forestry.
The forestry potential is very good with Mahogany
and Pines and possibly others. The Fishing
industry does have good potential. Gold has
its ups and downs although there are some
good prospects there. The garment industry,
which came up very quickly after the coups.
The Audio Visual area in particular is one
that we think has the greatest potential.
Q10. Do you think Mahogany will take over
Sugar in the near future?
A10. I do not think it will be that large
of an industry, the role of those industries
is a bit exaggerated. The sugar industry,
even in its difficult position, is still substantially
more important than tourism for instance.
Tourism now earns gross foreign revenue about
twice as much as sugar but sugar involves
22,000 farms and the people associated with
and dependent on the sugar industry is probably
three times as much as with tourism. We have
cane workers, cane cutters and all sorts of
other related jobs. When you look at the dollar
that the sugar industry earns compared to
the dollar that the tourism industry earns,
the sugar dollar multiplies many more times
through the economy, it goes through many
more hands than the dollar of the tourism
because most of that dollar remains in local
hands, farmer to worker to cutter to mill
operator and so on. I would say that 70 %
of the tourism dollar immediately goes overseas
for all costs that are necessary to sustain
the tourists here. The difficulties the sugar
industry is going through has much more serious
consequences than any other industry.
Q11. How do you see Fiji in the next
5 years?
A11. Very good prospects. We have a good
government; Mr. Qarase is a very capable and
dedicated person who has a good team. They
are very much focused, they have a good plan
and they are trying to address the issues
that have tended to disturb our development
path in the past. They are not easy things
to do but they are seriously trying to do
it. They recognize that the driver of the
economy has to be the private sector and they
have their weight behind that even against
some very strong opposition from people who
do not appreciate the way an economy works.
The necessary infrastructure, policies and
legislations have been put in place. Investors
have been encouraged to invest and are being
rewarded for that investment. There are investors
coming in and developments taking place that
should help the economy very significantly.
The effects of the coup are still being felt
but the momentum of positive development is
building. Employment remains a serious issue
and many new jobs will be created with these
developments.
Q12. We read that if you ask senior students
what company they prefer studying for a
school project, nine out of ten answers
"Telecom Fiji". What kind of labor
force will a foreign investor find if they
come to Fiji to invest in it?
A12. For a country of our size, we have
a reasonably well-educated work force, literate,
increasingly able to use modern equipments,
computers, etc. Any one wanting to invest
in this area will find a ready source of workers
who are able to do the work. On the communication
front we have been upgrading our network.
We have tried to incorporate those features
that make connectivity and dealing with businesses
much more efficient and cost effective. Recently,
we launched the ISDN product, which gives
high-speed connection Internet connections
to businesses. We are in the process of installing
an optic fiber network in the city, in the
central business district of Suva, and over
the next 18 months we will complete the connection
between this side and the Western side with
the optic fiber link. We are upgrading our
main network transmission systems. Any business
operating here will be able to do business
with anyone else in the world. We will not
be disadvantaged in terms of our technology
capability and this is where the ISDN comes
in.
Q13. Mr. Thompson. You are Deputy Chairperson
of FAVC, You have been Permanent secretary
of various Ministries in the past. Could
you tell us more about your background?
A13. I am a graduate in agriculture and
have worked in government in the departments
of agriculture, finance, public service, foreign
affairs and tourism. I joined Telecom in 1995
and it has been a fascinating eight years
in a dynamic industry which has been repeatedly
transforming itself as new technologies have
emerged.
Winne cannot be held responsible for unedited
transcription. |
V.I.P. INTERVIEWS
