ICT in­dus­try shake-up con­tin­ues with merg­ers and ac­qui­si­tions

All­com PNG and mcr PNG have be­come the lat­est tech­nol­ogy ser­vices com­pa­nies in Pa­pua New Guinea to con­sol­i­date, af­ter an­nounc­ing a merger that will see the en­larged en­tity re­alise a num­ber of op­er­a­tional syn­er­gies.

Business Advantage Papua New Guinea - - Technology -

Grow­ing de­mand for in­for­ma­tion and com­mu­ni­ca­tions tech­nol­ogy (ICT) in Pa­pua New Guinea pro­vided All­com PNG and mcr PNG with the in­cen­tive to merge into one of the coun­try’s largest ICT ser­vice providers, All­com MCR PNG.

The merger fol­lows Te­likom PNG’S ac­qui­si­tion of in­ter­net ser­vice provider (ISP), Datec PNG in early 2014, and Dig­i­cel PNG’S pur­chase of ISP and ser­vices com­pany Dal­tron in late 2013.

It also marks the first in­volve­ment by ei­ther com­pany in merger and ac­qui­si­tion ac­tiv­ity in PNG and, ac­cord­ing to Luke Byer, Man­ag­ing Direc­tor of the new en­tity, it comes at an ap­pro­pri­ate time in the devel­op­ment of the coun­try’s ICT in­dus­try.

‘Since we have been es­tab­lished in PNG, there has been a shake-up in the in­dus­try—there is ra­tio­nal­i­sa­tion hap­pen­ing.

‘I think our merger was timed to give us a bit more size in the mar­ket at this very im­por­tant time in the evo­lu­tion of the in­dus­try in PNG,’ Byer tells Busi­ness Ad­van­tage PNG.

Tech­ni­cal ser­vice

All­com PNG and mcr, which have been op­er­at­ing in PNG since 2008 and 2009 re­spec­tively, have com­bined with the aim of de­liv­er­ing a stronger tech­ni­cal ser­vice to their clients, which sit in broad range of in­dus­try sec­tors, in­clud­ing re­sources and gov­ern­ment, Byer ex­plains.

He adds that the two com­pa­nies had a ‘fairly com­ple­men­tary skill set’.

‘We did com­pete in a num­ber of ar­eas [be­fore the merger] but found over­all that it was more of a com­ple­men­tary vi­sion if we merged the two com­pa­nies to­gether,’ Byer said.

‘Our main area of over­lap is in our net­work­ing prac­tice, as we are both Cisco (Sys­tems Inc) part­ners and we both have Cisco en­gi­neer­ing ex­per­tise.

‘We also saw that as an ad­van­tage. At dif­fer­ent times, we strug­gle to pro­vide the level of en­gi­neer­ing sup­port re­quired in PNG, given it is a grow­ing mar­ket. Now that we have a big­ger team of en­gi­neers with dif­fer­ent skill sets, we have a big­ger team to utilise.’

Fu­ture op­por­tu­ni­ties

The merged com­pany, whose clients will in­clude Bank of South Pa­cific, In­teroil Cor­po­ra­tion, Air­lines PNG and Par­adise Foods, will have around 30 staff, pre­dom­i­nantly made up of ICT en­gi­neers, with fo­cus on devel­op­ment of PNG lo­cals.

Byer was con­fi­dent of ex­pan­sion for the new com­pany, say­ing that while PNG’S eco­nomic growth was be­ing driven by the PNG LNG project, there were op­por­tu­ni­ties for ICT com­pa­nies in not only oil and gas, but also other sec­tors.

‘PNG, even be­fore the LNG project, was an emerg­ing mar­ket,’ Byer said. ‘In­fra­struc­ture may lag be­hind what we would ex­pect in coun­tries like Australia, but cus­tomer ex­pec­ta­tions are not far be­hind.

‘It is up to com­pa­nies like us to come up with in­no­va­tive ways of pro­vid­ing a cus­tomer ex­pe­ri­ence that would also be ex­pected some­where like Australia.’

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