The Marshall Islands parliament looks set to pass a controversial law that would open up the telecommunications market to competition.
Transcript
The Marshall Islands parliament looks set to pass a controversial law that would open up the telecommunications market to competition.
The Finance Minister Jack Ading strongly backed the bill and the opportunity for the large cash infusion.
Our correspondent, Giff Johnson, told Leilani Momoisea those opposed to the bill say the market isn't big enough for more than one telecom.
GIFF JOHNSON: People who are objecting to the World Bank-driven legislation say that it will simply result in getting rid of the people of the existing telecom and a foreign telecom coming in and taking over and being a similar monopoly and that the people who work for the present telecom, most of them will lose their jobs and so on, so this is what's being debated and the Marshall Islands government has already received $3 million from the World Bank just for introducing the legislation and then stands to receive over $10 million if it continues progress on approving the legislation and then rolling out the requirements of that legislation.
LEILANI MOMOISEA: The legislation essentially opens the door for other telecommunications companies to come in and set up shop?
GJ: Correct. The legislation would end the Marshall Islands National Telecommunication Authority's monopoly on services in the country and there are many issues in this about addressing things like the level playing field for competition, given that NTA, the telecom that exists, is paying a very large loan for the submarine fibre optic cable that the government wanted installed several years ago and the legislation would allow everybody equal access to that and wouldn't require any investment by incoming telecoms, which would pretty obviously place the existing one at a disadvantage given the fact that it's paying off the loan to the US and so on. There are a lot of issues within it that would have to be addressed but it seems that the government is quite keen to move the legislation forward and did pass it on second reading several days ago.
LM: The government is refuting what the people objecting to this bill are claiming?
GJ: Government people are saying that essentially it will improve telecommunications services for the public. There seems to be the argument that it will foster competition and that there would end up being more than one telecom as a result but even the World Bank seems to acknowledge that the market is very small, and if you listen to telecom people they just say look there's no way that two telecoms can compete in this environment, that the population's too small, that there just isn't the business for two telecoms. But the government is quite keen too on the funding because the grant - it's not a loan, it's a grant - essentially comes with no strings attached which means the money can be used for any purpose the government wants and that's a pretty attractive carrot to be hanging out for the government.
Giff Johnson says Digicel has already shown interest, and is positioned to come into the market, should the legilsation pass the final reading.
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