Digicel gets wings clipped
The national regulating body for information and communication technology in Papua New Guinea (PNG), NICTA or National Information and Communication Technology Authority (phew, that’s a mouthful) is placing a restriction on the prices that Digicel can set on its products and services. This was made public in a determination by the Minister for Communication and Information Technology (ICT).
In a press release from the Minister responsible, Hon. Jimmy Mirintoro, said the move is in the “best interest of consumers” in the country, and that it would constrain “the extent to which Digicel may discriminate in the prices for pre-paid mobile voice calls made by its customers on its network and customers on other networks.”
The determination forces the Irish mobile company to be able charge a maximum 40% of its on-net (Digicel – Digicel) price for pre-paid voice calls to other networks. This follows complaints that calling from Digicel to other networks is very expensive and some of the mobile company’s prices exceed the differential. Digicel will now have to revise some of its tariffs. However, exceptions can be made if and the company may charge more if:
- It has a cost justification that has been accepted by NICTA, or;
- It is running a promotion which has been cleared beforehand for price setting by NICTA.
Miringtoro said that “discrimination is generally a bad thing” but pricing in the communications industry was complicated and has both pros and cons.
NICTA will be responsible for monitoring the determination which will be reviewed after two years.
The Minister’s determination is based on a recommendation from NICTA which justified their decision by stating that other countries like Namibia, Paraguay, Thailand, Turkey and the United Arab Emirates (UAE) have introduced similar restrictions.
They also said the price discrimination can be “anti-competitive” by deterring subscribers to call other networks and “fosters a lock-in effect” that deters them from switching networks.
A public inquiry was called into whether or not the regulatory body should recommend a determination to the Minister.
Further information regarding this determination can be obtained from Kila Gulo-Vui, the Director of NICTA’s Economics, Consumer and International Affairs on phone (+675) 303 3228 /303 3200.