MINISTER EXPLAINS RESTRUCTURE IS ONLY WAY TO SAVE TELIKOM PNG, OWES BANK K800M

The Papua New Guinea Government’s decision to transfer certain portions of Telikom businesses, network infrastructure, and staff to bmobile and DataCo Ltd respectively is to save the company, says Papua New Guinea Minister for Public Enterprise and State Investment William Duma.

Duma told The National that Telikom was “broke” and the only way to save it was to restructure it.

Responding to questions on the workers currently protesting the merger of the three companies (Telikom, DataCo and bmobile) under Kumul Telikom, Duma said there would be no termination of workers. “Considering the tough economic times, we will not have any more termination of workers on the streets. Their jobs are secure.

“As it is now, Telikom is broke and it is not making any money and to save the company from the banks, restructure is the only way.”

PNG Communication Workers Union president Nug Mamtirin said they had written to the board and management of Kumul Telikom requesting that the decisions to transfer portions of Telikom businesses be put on hold. Members of the union held lunch-hour meetings last week and on Monday began their protest after learning of the agreement signed between the three companies.

Mamtirin said the board of Kumul Telikom passed certain decisions last Thursday which included the ceasing of the Mobile Virtual Network Operator (MVNO).

He said there was an agreement signed between Telikom PNG Limited, bmobile and DataCo to transfer portions of Telikom businesses and network infrastructure including the staff.

Meanwhile, about K800 million(US$248 million) (FJ$499m) is owed by Telikom PNG to a commercial bank, which is an issue the Government is trying to manage in the entity’s merger with bmobile-Vodafone and DataCo, it has been revealed. Minister for Public Enterprise and State Investment William Duma told The National that the merger between the three State entities was to “combine their strengths and collectively address weaknesses such as debts”.

“This process was made even more urgent with the progressive inability of the state companies to make money while delivering quality service to its shareholders, the people of PNG,” he said. “Eventually we will have one telecommunication company that will be able to compete effectively with Digicel.” He said Telikom took a loan from the ANZ Bank for about US$240mil (K780mil) (FJ$486 mil).

“So that means we are in debt at about K800 million (FJ$499m),” he said. “They (Telikom) owe a lot of money to ANZ Bank. And if it is not paid back, they will come for what is owed and a lot of people will lose their jobs and we will have a massive social and economic problem on our hands if we do not restructure now.” He said bmobile too had its own legacy issues inherited from its previous structure.

“It may not be as much as Telikom but they also need to make money as well,” he said.

He said the Government was trying to combine the various strengths of each company and work collectively towards reducing the loans and providing better service to the people.

“The chief financial officer of each company can say whether they are making money,” he said.

“But I can tell you now that the answer is no, they are not. I get periodic reports on their performance and each of those don’t paint a good picture of where they are heading.”

Duma also said the Government was committed to ensuring that employees of the three State telecommunication companies were not disadvantaged.

“Our job is to put in place an effective structure so that employees are able to do their jobs better so we can make full use of these companies,” he said.

“The merger is what we need to be able to be competitive in the sector and contribute to the development of our country,” Duma said.

The National