Principles and objectives of telecommunications licensing policy

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1 Principles and objectives of telecommunications licensing policy The broad principles and objectives of the Government s telecommunications licensing policy are: promoting competition and open market policies; facilitating the ability for an end-user in Vanuatu to communicate with any other end-user in Vanuatu, no matter what network they are on ( any-to-any connectivity ); flexibility in providing telecommunications services under the licences and promoting the ability for future developments in telecommunications (e.g. technology neutrality); transparency of the licensing process; promoting regulatory certainty for licensees; and consistency of terms across licences. Scope of telecommunications licences The new telecommunications licenses will authorise licensees to: provide telecommunications services (except mobile telecommunications services, prior to March ) to end-users in Vanuatu; and provide international telecommunications services to end-users in Vanuatu, and to persons outside Vanuatu, and any other telecommunications services that are supplementary to those telecommunications services. For these purposes, telecommunications services will not include broadcasting. Licence eligibility Each person who wishes to receive a telecommunications licence must apply in writing to the Minister for the grant of a licence. The 1989 Act requires that, before the grant of a licence, the Minister must satisfy himself that the applicant is capable of providing the telecommunications services it has applied to provide. Each applicant will have to describe which types of telecommunications services they intend to provide and set out why they believe they have the capability to provide telecommunications services in their licence application form. In making his 1 This exception will not apply to licensees that are subject to universal access obligations (pursuant to any universal access policy referred to below) in those parts of Vanuatu that are the subject of those obligations.

2 decision, the Minister may take into account the broad business and technical experience of the applicant. The Government also notes that the 1989 Act does not require persons providing value added network services to hold a telecommunications licence. 2 Examples of services expected to fall within this exception include internet cafes and village phones. See the section below ( Process for the grant of a licence ) for further details on the licence application process. Key provisions of the licence Term of licence The term of each licence will be 15 years, although there will be powers for the Regulator to amend or revoke the licence in certain defined circumstances. Non-exclusive licence Each licence will be non-exclusive. That is, there will be no limit on the number of licensees able to provide telecommunications services in Vanuatu. Telecommunications Licence Fees The Government intends that licensees will be required to pay a small percentagebased fee in order to meet the administration costs of the Regulator. Each licensee shall, within 20 working days following the end of each calendar quarter after the date of its licence, pay to the Regulator an amount of 2.25% of Net Revenues in relation to that calendar quarter (the Licence Fee). Net Revenues will mean the gross revenue (including all interconnection and other wholesale revenue) received by the licensee from the provision of telecommunications services under its licence during the relevant period, less the sum of: the interconnection and other wholesale charges paid by the licensee to another licensed operator during that period; the out payments made by the licensee, on an arm s length basis, to any person outside Vanuatu for the carriage of telecommunications traffic that originates in Vanuatu to destinations outside Vanuatu during that period; and any general business licence fees (not including the Licence Fee itself or any UAP Fund Levy (see below)) paid by the licensee to the Government or the Regulator during that period. If a licensee has a business providing non-telecommunications products and services as well as telecommunications services, they will need to provide a separate set of accounts for their telecommunications costs and revenues. 2 Telecommunications Act 1989, section 19(1)(c).

3 UAP Fund Levy The Government intends to implement a universal access policy to assist in the provision of telecommunications services to remote areas that may not otherwise receive services. The Government intends that all licensees will have to contribute to the Universal Access Fund (the UAP Fund), to fund the provision of services to these areas. The TVL and Digicel licences both contain this obligation to contribute to the UAP Fund. There will be an annual levy on all licensees for the amount reasonably estimated as being necessary for meeting the actual or forecast allocations of the UAP Fund for that year (a UAP Fund Levy). This is separate from, and in addition to, the Licence Fee. There will be a limit on how much each licensee has to contribute. No licensee will have to pay a UAP Fund Levy that is greater than 4% of its Net Revenues in any single year. Exemptions and authorisations under the new Telecommunications Act The Government intends to introduce new legislation which will provide the ability to grant exemptions from the requirement to hold a licence. This would mean that, among other things, persons subject to an exemption or authorisation would not be required to pay the Licence Fee or a UAP Fund Levy. The Government plans to establish a policy under which small business operators (whose income falls below a minimum reporting threshold) may receive an exemption or authorisation in order to reduce the regulatory burden on those businesses and individuals. Interconnection Every licensee has the right to interconnect with other licensees in Vanuatu. This means that a licensee will have the right to require any other licensee that has an access network in Vanuatu to negotiate in good faith an agreement for interconnection with the network of that other licensee. Also, upon receipt of a request from another licensee, a licensee will have to enter into an interconnection agreement in the form of a Reference Interconnection Offer (the RIO). The form of the RIO will be available from the Regulator s office. Relationship with other telecommunications policies Radio spectrum licences Some telecommunications services may require the use of radio spectrum for the provision of the service; for example, for the provision of wireless internet services. If a licensee needs to use radio spectrum to provide telecommunications services under its licence, it will have to get a separate radiocommunications licence. The Government wishes to facilitate access to radio spectrum, but notes that the grant of a telecommunications licence does not automatically entitle the licensee to a radiocommunications licence. Radio spectrum is a scarce resource and radio spectrum in the bands sought by the licensee may not be available, or available only in limited quantities.

4 The licensee must apply separately to the Regulator for a radiocommunications licence, in accordance with the radio spectrum policy. 3 There will be additional annual fees for the use of radio spectrum under a radiocommunications licence and a use it or lose it requirement, which will result in the termination of the radiocommunications licence if the licensee is not using the radio spectrum efficiently. Numbering Some telecommunications services may require the use of numbers, to allow their customers to be called by others. If a licensee needs access to numbers, the licensee will have to apply separately to the Regulator for an allocation under the national numbering plan. Again, the Government wishes to facilitate access to numbers, but the grant of a telecommunications licence does not automatically entitle the licensee to access to numbering resources. Numbering is a scarce resource and numbers in the ranges sought by the licensee may not be available, or available only in limited quantities or non-contiguous blocks. Transition to a new Telecommunications Act The Government intends to update and modernise the current telecommunications legislation in light of the recent liberalisation of the telecommunications market. The Government anticipates that a new Telecommunications Act will be passed into law in due course, and will replace the existing 1989 Act. The Government plans to consult with the public and receive feedback and comments from interested parties on the draft new Telecommunications Act, prior to submitting a Bill to Parliament for consideration. In the case of any licences granted under the 1989 Act, it may be that a replacement licence or an amended licence, or an authorisation or exemption, will be issued by the Minister or the Regulator to the licensee, in order to ensure consistency with the requirements of the new Telecommunications Act (and any regulations, rules or orders that may be made under the new Telecommunications Act). It is the Government s intention that any such replacement licence or amended licence, or authorisation or exemption, will not result in the licensee being materially disadvantaged as compared to its position under the licence granted under the 1989 Act. Digicel s amended licence The Government intends that Digicel s current mobile and international licence will be amended to authorise Digicel to: provide telecommunications services to end users in Vanuatu (i.e., not just the provision of mobile telecommunications services); and 3 The Government is currently preparing a radio spectrum licensing policy which will set out the principles, objectives and processes for the grant of radiocommunications licences and the allocation of radio spectrum in Vanuatu.

5 provide international telecommunications services to end users in Vanuatu, and to persons outside Vanuatu, and any other telecommunications services that are supplementary to those telecommunications services. For these purposes, telecommunications services will not include broadcasting. Process for the grant of a licence All persons wishing to apply for a licence will need to complete an application form, which will be available from the office of the Director General of the Ministry of Infrastructure and Public Utilities (MIPU). The standard form of the telecommunications licence will also be available from the office of the Director General of MIPU. (As the form of the application form and the form of the licence may change from time to time, all applicants need to check with the MIPU office to confirm the most up-to-date version). All applications for licences made under the 1989 Act will need to be submitted to the office of the Director General of MIPU. Once applications are submitted, they will need to be approved by the Minister. For applications which relate to the provision of telecommunications services to the public, these applications will first need to be approved by the Council of Ministers, and then by the Minister. Once all necessary approvals have been given, the Minister will then grant the licence in the name of the licensee. The Government intends that the applicant will be notified as to whether it has been granted a licence as soon as possible, and in any event within 30 days of the submission of its application to the Director General of MIPU.