Econet downplays latest Papua New Guinea setback

Econet Wireless has downplayed the impact of a parliamentary vote that rejected its bid to buy a 51% stake in Telikom PNG.~ ~ The Papua New Guinea (PNG) parliament voted 55-19 against Econet’s bid, which has been endorsed by a couple of the nation’s economic ministers and its privatisation agency.~ ~ Only government ministers opposed the anti-Econet motion, which was sponsored by a government backbencher and supported by the opposition.~ ~ The vote is the latest setback for the beleaguered Zimbabwe-based company, which has seen its executives arrested at home for foreign exchange violations, its Nigerian ambitions derailed by a bun fight with business partners and an unsuccessful attempt by the Kenyan government to strip it of its GSM license there.~ ~ A Papua New Guinea newspaper, The National, reported yesterday that Econet’s proposed ownership of Telikom could be cut back from 51% to 48% to help defuse political opposition to the sale.~ ~ The parliamentary vote does not automatically block the sale, as the final decision is made solely by the Cabinet and the Independent Public Business Corporation.~ ~ Commenting on the latest development, Econet’s Andrew Mikkelsen told Telecom TV News that, “This is a major privatisation in a developing market, so we expect a few more desperate moves to be made before this is all over.” He added, “I think the debate is now shifting away from how Econet is perceived towards how PNG will be perceived if the deal does not go ahead after three years of trying and two failed attempts. But from what we can see, the government is keen to enforce its privatisation policy so we`re confident that they`ll prevail."~ ~ Although Papua New Guinea is a small market by regional standards, the Australian operations of several global vendors are keen to see a resolution of the imbroglio as Econet plans a massive upgrade of the PNG network should it be approved as the new owner. Ericsson is currently the main supplier to Econet.