B Mobile sold

* K130 million deal with Americans and top super funds *

THE Government has sold 50% of mobile phone company B Mobile, owned by Telikom, to a consortium made up of two American companies and PNG’s two major super funds.
The deal, approved by the Telikom board, was given the nod by the National Executive Council last Friday.

The partial sale was for US$45 million (K130 million).
B Mobile owners, Telikom PNG, have been under pressure to upgrade its ailing infrastructure and lift the game following the entry of World Bank-backed competitor Digicel, which controls about half the mobile phone market.

Members of the Telikom board and management and Independent Public Business Corporation officials revealed the complex structure of the sale, under the Government’s private public partnership approach, to the media yesterday.
Under the deal, the mobile phone business will be managed by a company called Black Dolphin Ltd in partnership with Capital Way Consortium in a 50/50 joint venture.
Capital Way Consortium is made up of Trilogy International Partners LLC (20%), General Enterprises Management Services (GEMS) Ltd (20%), Nasfund (5%) and Nambawan Super (5%).

The consortium will own 50% of Black Dolphin Ltd, and Telikom will own the other 50%.
Trilogy is an American company that invests in wireless telecommunications operations outside the US. It has operations in Bolivia, Haiti and the Dominican Republic. GEMS is a US$750 million private equity fund that invests in telecommunications companies around the world.

It had previously been reported to have held talks with third mobile phone company Greencom, which has yet to launch in PNG.

Telikom board members and management spent yesterday morning explaining the deal to staff of both Telikom and B Mobile, and assuring them that no jobs would be affected.
With Public Enterprise Minister Arthur Somare and Telikom chairman Gerea Aopi unavailable, it was left to Telikom board member Albert Veratau to announce the deal.

Mr Veratau admitted Telikom’s infrastructure was old and outdated, and the consortium would bring much needed cash and technical expertise to raise the game to meet world standards.He said the partial sale was much better than two sales in the past that fell through.

“This deal would bring much-needed cash injection, and we still own more than half of a strategic asset in Telikom’s 50% and the 10% held by the super funds,” Mr Veratau said.He said Telikom PNG was fortunate to have the joint venture agreement with these successful companies under the Government’s public private partnership programme as they bring with them a wealth of management and financial capacity to boost B Mobile activities in PNG.

The new venture would be chaired by Telikom director Anthony Smare with representation from the Capital Way Consortium and Telikom.
Mr Veratau also said the infusion of capital and expertise into the B Mobile joint venture would allow customers enhanced access to efficient, reliable and competitive mobile phone services and ensure retention of its position as PNG’s largest mobile phone carrier with the best network.

“The joint venture would serve the dual purpose of enabling Telikom PNG to focus solely on upgrading its core network to world status, realising greater value from its international gateway, and improving and realising greater value from fixed line telecommunications network and internet services.”
Mr Smare said the deal has all the ticks and, in three years time, will list on the Port Moresby Stock Exchange.“In doing so, 10% would be floated for the public to buy shares in the company,” he said.

Mr Smare said the two American firms would make available the 10% from their shareholding for the public to participate.

National Newspaper 2nd September 2008