4 OBLIGATIONS OF THE CONCESSION HOLDER
4.1 Rendering of Basic Services
The CONCESSION HOLDER shall be obligated to render the Basic Services without interruption and efficiently, according to the terms and conditions of this Agreement and obligations imposed on it by international treaties signed by East Timor.
The CONCESSION HOLDER may render some or all of the Basic Services in any part of East Timor by employing a subcontractor of the CONCESSION HOLDER. The use of a subcontractor does not relieve the CONCESSION HOLDER of any of its obligations under this Agreement and the CONCESSION HOLDER is responsible for the activities of the subcontractor as for its own activities.
4.2 Intentional Service Suspension or Interruption
Indefinite suspension of the rendering of any of the Basic Services may take place only with the prior authorization of the Government.
The CONCESSION HOLDER may temporarily interrupt the rendering of any of the Basic Services in, or to and from, a specified geographic area, when necessary to install, repair or change equipment, after the publication of a notice thereto in the local or national press or making a relevant announcement over the radio or TV, as the case may be.
4.3 Application of the Laws of East Timor
The CONCESSION HOLDER shall observe and comply with the TINSET REGULATORY LAW of East Timor other laws applicable in East Timor, as well as other normative acts.
If new applicable laws and other normative acts substantially alter the economic and financial equilibrium of this Agreement, the second paragraph of Section 5.8 Modifications Of Terms And Conditions Of The Concession, shall be applied.
4.4 Operation, Expansion and Modernization of Public Telecommunications Networks
Within nine (9) months following the Effective Date the CONCESSION HOLDER shall submit to the GOVERNMENT two (2) plans for the development of its activities, namely
1 a three (3) years' plan, and
2 a ten (10) years' plan
each of which shall be updated annually. These plans shall include a Basic Services expansion strategy in rural areas and remote population centers and for residential subscribers.
The CONCESSION HOLDER shall consult with the GOVERNMENT to enable the GOVERNMENT to comment on the plans and propose amendments to the plans before they are adopted. The CONCESSION HOLDER shall in good faith consider such comments and proposals and amend the plans, adding such proposals it considers feasible.
The CONCESSION HOLDER may give priority to the expansion of Basic Services in certain urban areas or production centers. However, in the expansion strategy, the CONCESSION HOLDER may not establish unjustified discriminations among different regions.
The CONCESSION HOLDER shall properly account for market demand in developing and reviewing the network modernization expansion strategy.
4.5 Prohibition on Unfair Competition
The CONCESSION HOLDER shall provide the Basic Services in a fair and competitive manner according to normative acts and the conditions and terms of this Agreement and must not, during the period of limited competition (Section 5.5 Period Of Limited Competition) cross-subsidize services provided competitively with revenues from the Basic Services.
After the period of limited competition, the CONCESSION HOLDER shall not engage in practices obstructing or restricting free competition in the Basic Services that others may provide.
4.6 Quality of Services
Within the nine (9) months following the Effective Date, the CONCESSION HOLDER shall submit to the GOVERNMENT a service quality plan, giving the initial indices for quality of the Basic Services. The said initial indices reflect the status of the network, and the CONCESSION HOLDER'S goals for quality improvement.
The service quality plan shall be reviewed and updated annually by the CONCESSION HOLDER and submitted to the GOVERNMENT by December 1, at latest, taking into account the previously reached levels, needs of and requirements for rendering the Basic Services, and the rights of the CONCESSION HOLDER.
4.7 Reporting
The CONCESSION HOLDER shall annually, by March 31, at latest, report to the GOVERNMENT, in the manner and details, required by the GOVERNMENT, on the results in the field of the Basic Services.
The CONCESSION HOLDER shall submit to the GOVERNMENT its audited financial statements within four (4) months following the conclusion of the fiscal year.
The GOVERNMENT may at any time request from the CONCESSION HOLDER additional information it reasonably deems necessary or appropriate for the proper exercise of its powers of inspection and supervision. At the request of the CONCESSION HOLDER, the said information shall be treated as confidential to any third party.
4.8 International Agreements
The GOVERNMENT shall establish the overall framework of policies the CONCESSION HOLDER shall follow regarding international agreements. Within this framework, the CONCESSION HOLDER shall be entitled to enter into the agreements it considers desirable for providing the Basic Services.
The CONCESSION HOLDER shall have the right to initiate and participate in negotiations regarding international treaties on telecommunication services. The GOVERNMENT shall consider and evaluate all proposals made by the CONCESSION HOLDER for entering new treaties or amending the existing treaties.
Unless authorized in writing by the GOVERNMENT, the CONCESSION HOLDER shall not be permitted to enter into any agreements on behalf of, or in a way binding upon, East Timor.
4.9 Purchase of Equipment and Contracting of Projects
The CONCESSION HOLDER shall use reasonable efforts to promote competition in the procurement of each acquisition and installation, or each series of purchases or installations of communications equipment, plants and systems and for the contracting of projects.
The CONCESSION HOLDER shall give due attention and consideration to all competing offers made to provide the aforementioned products and services, in accordance with the internal procedures it establishes and may not unjustifiably discriminate between the candidates.
The CONCESSION HOLDER may not impose exclusivity conditions that unfairly lessen free competition on suppliers of goods or services unless the goods or services in questions are patented under the CONCESSION HOLDER'S name.
4.1 Technology
The CONCESSION HOLDER shall use such technology as, in accordance with the objectives of this Agreement and considering the CONCESSION HOLDER'S ability to finance, is in the CONCESSION HOLDER'S opinion the best for promoting the interests of subscribers and for maintaining and improving the quality of services provided and is not incompatible with norms, applicable in East Timor.
4.11 Measuring and Quality Control
For invoicing and quality control of the Basic Services and other services, the CONCESSION HOLDER shall only utilize measuring devices of high precision and reliability, the use of which is compatible with international standards.
4.12 Interconnections
The operator will have the authority to negotiate interconnection agreements, subject to approval by the Regulator.
The CONCESSION HOLDER shall, on terms and conditions to be agreed between the CONCESSION HOLDER and the party interested in interconnection, allow, facilitate and effect the interconnection to its network of the Basic Services and systems of other telecommunications operators, according to the Telecommunications Act of East Timor, and established international standards.
Notwithstanding the provisions of the preceding paragraph and Section 7.1 Principle of Equal Treatment, the CONCESSION HOLDER, during the period of limited competition provided in Section 5.5 Period Of Limited Competition, shall not be required to permit direct or indirect interconnection of other telecommunications networks to the network for the Basic Services or any other network of the CONCESSION HOLDER otherwise pursuant to Section 5.3 Local Public Networks/Independent carriers.
The interconnection charge for each type of service requiring connection with the network for the Basic Services shall be such that it ensures the CONCESSION HOLDER a reasonable profit margin, and may include a monetary contribution for basic residential service. This contribution shall be of the same proportions as that the CONCESSION HOLDER would have given, rendering the same service in free competition.
4.13 Assignment of the CONCESSION
The CONCESSION HOLDER may not assign or transfer all or part of the CONCESSION granted herein without the prior permission of the GOVERNMENT.
The CONCESSION HOLDER shall, however, be entitled to sell shares in other entities to third parties and form enterprises with other persons within the scope of the CONCESSION, provided it does not require a separate CONCESSION or involve any restrictions of the CONCESSION HOLDER'S responsibility and obligations under this Agreement.
4.14 Restrictions on Disposal of Assets of the CONCESSION HOLDER
The assets, equipment and facilities allocated to the rendering of the Basic Services may not be transferred or removed from their assigned purpose in a manner, which is prejudicial to the continuity and efficiency of the rendering of the Basic Services or is incompatible with any applicable normative acts. The CONCESSION HOLDER shall preserve and maintain the aforementioned assets, equipment and facilities until the termination of the Agreement, including any extensions of the same, except in the events of defect, obsolescence, wear and tear due to their normal and appropriate use, as well as in cases of loss or damages not imputable to the CONCESSION HOLDER.
The restrictions, provided in this section shall not, however, preclude any alienation (sale), pledging or other assignment of assets to guarantee the normal economic activities of the CONCESSION HOLDER, provided the ability of the CONCESSION HOLDER to meet its obligations under this Agreement is unimpaired thereby.
4.15 Pre-Emption Rights
In the case of a sale of any building or land to a third party, except to a corporate body which is affiliated to the CONCESSION HOLDER, the CONCESSION HOLDER shall, before the sale is concluded, offer to sell such items to the GOVERNMENT or its nominee on the same terms and conditions (including price) as the CONCESSION HOLDER has been offered by the third party.
In the case of a lease of an entire building for a period of more than five years to a third party, except to a corporate body which is affiliated to the CONCESSION HOLDER, the CONCESSION HOLDER shall, before the lease agreement is entered into, offer the GOVERNMENT to lease such building on the same terms and conditions (including lease rentals) as the CONCESSION HOLDER has been offered by the third party.
The GOVERNMENT shall be considered to have declined the offer made pursuant to any of the two previous paragraphs if it has not been accepted in writing within thirty days from the date it was made.
4.16 Radio and TV
The CONCESSION HOLDER shall provide the radio and TV stations located in East Timor with transmission lines on terms and conditions to be agreed between the CONCESSION HOLDER and the respective radio or TV station. In case of a failure to reach an agreement, the matter shall be settled by the GOVERNMENT at the request of one or both parties within one month following its presentation to the GOVERNMENT.
4.17 Local staff employment and training
The Operator shall provide training for, and employ local staff as far as possible in the day-to-day operations and maintenance of its facilities and services.