NICTA Finalizes Licence Rights

The National Information and Communications Technology Authority (NICTA), has given its final and formal written consent to the transfer of license rights as a result of the proposed acquisition of Digicel Pacific by Telstra Corporation.

NICTA is the government agency responsible for the regulation and licensing of Information Communication Technology (ICT) in Papua New Guinea, 

ICT Minister, Timothy Masiu, in a media conference today, said an initial decision to grant consent was given last month, but following further dialogue between NICTA, Telstra and Digicel, a final and unconditional consent has now been granted by the NICTA Board. “We therefore expect the sale to proceed” the Minister said.

In October 2021, Telstra and Digicel advised the Government and NICTA of the proposed acquisition of the Digicel Pacific business. Digicel PNG Limited and Hitron Limited are part of the group which also includes operations in Fiji, Tonga, Samoa, Vanuatu and Nauru.

Masiu explained that Telstra subsequently sought consent from NICTA under Section 52 of the National Information and Communications Technology Act 2009 (the Act). “Section 52 requires that NICTA's prior written consent be given before there can be a transfer of licence rights, and the transfer of a quarter or more of the ownership (voting rights), whether directly or indirectly, is considered to be also a transfer of licence rights.

“It is intended by Telstra that the direct share ownership of Digicel PNG Limited will remain now, but that 100% of ownership rights further up the corporate chain shall pass to Telstra when the acquisition is completed.”

Minister Masiu further added that there are many individual operator licensees on NICTA's licensee register, and Section 52 consent occurs regularly. “The specific Section 52 consent in the present case is significant because Digicel PNG Limited has a mobile retail market share of over 90% in PNG and is by far the largest operator in retail ICT markets in the country.

“What happens to and who owns Digicel PNG Limited is therefore very important. It is also important to note that Telstra has made it clear that, under its ownership, Digicel PNG will continue to maintain all existing services and networks, and to continue the charitable work in early education through the Digicel PNG Foundation.”

The Minister also clarified that NICTA considered a whole range of matters before agreeing to give its consent. One concern was the effect on competition and NICTA contributed to the recent consultation by the Independent Competition and Consumer Commission (ICCC) on whether the proposed acquisition would have the effect or likely effect of substantially lessening competition in the PNG ICT market.

The ICCC determined that it would not, and the ICCC formally cleared the acquisition on February 15, 2022.

NICTA also considered a number of proposals and plans for the Digicel PNG business that Telstra and Digicel presented to it.

The Minister said that it is clear that Telstra intends to grow the business and its representations in this regard have been formally noted by NICTA. The Minister said that NICTA expects these proposals to be implemented after the transaction is finalized, and this will be part of an ongoing dialogue NICTA and Digicel to suitably amend Digicel's licence conditions. He added that it is important to note that, when the acquisition is finalised, Digicel PNG Limited will be the same company, subject to the same licence conditions, as now.

The final approval acknowledges and noted further capital investments in PNG by Telstra to the tune of about K200 million over the next two years to improve rural connectivity and network reliability.

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