Professional Documents
Culture Documents
Vodafone PNG
market, and offer some solutions to addressing these
challenges, in a number of key areas. We conclude with a
number of suggestions for by Vodafone PNG to play a role to
be the first customer choice in Telecommunication industry
in PNG.
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Intentionally Blank
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Table of Contents 1
Title Page………………………………………………………………………………………………….2
Abstract …………………………………………………………………………………………………..3
Executive Summary……………………………………………………………………………………....4
Introduction ………………………………………………………………………………………………5
Background History …………………………………………………………………………………….. 6
Overview of the Telecommunication Environment………………………………………………….....9
Challenges Facing the Telecommunication Sector In PNG …………………………………………..11
Solutions and Suggestions to Win the First Customer’s Choice……………………...........................14
Conclusion ………………………………..……………………………………………............................19
Reference …………………………………………………………………………………………………21
Appendixes ……………………………………………………………………………………………….22
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Market Analysis of Telecommunications Competition in
Papua New Guinea: The case study for Vodafone PNG
Bch. of Business
(Business Accounting & Business Management)
Pacific Adventist University
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Abstract
This paper reports the constraints of dominating the mobile telephony market in PNG. We first
the market industry. We then proceed to consider the challenges facing in the Telecommunication market,
and offer some solutions to addressing these challenges, in a number of key areas. We conclude with a
number of suggestions for by Vodafone PNG to play a role to be the first customer choice in
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Executive Summary
In Papua New Guinea more than 60-70 % of the populations are mobile phone users. Mobile
Cellular network coverage is very low compared to rural areas of the country. Recent outcome in the
regions shows how mobile services should be offered first to eligible mobile phone users for their
communication purposes.
Market competitors in the industry like Digicel and Bmobile/Telikom PNG Ltd are shown deem
to in respect to reaching some parts of the country and mobile users being lack of communication
accessibly. The population is made up of more than eight (8) Million plus and most of them lives in rural
areas. The half of the population covers the mobile literates and openness to technology is also enabling
factors. The combination of high mobile penetration and low access to financial services means that there
is an opportunity for transformational mobile banking services in all the suburbs and provinces of the
country.
However, potential customers need to see the value proposition before using a new service. This
suggests a need for extensive customer awareness campaigns for the uptake of Vodafone‘s mobile
services. There is a great need of Vodafone in the customers demand in the market for a widespread
coverage very quickly and putting mobile phones into the hands of as many Papua New Guineans as
PNG has poor infrastructures that may slower the logistics of Vodafone mobile phones, SIM
Cards rolling out and Recharge Cards selling out; this may not only by infrastructure constraints but some
may be from cultural and political influences. At such occurrences, Vodafone can employee regional
Potentially Vodafone is highly demanded as a new competitor to the market and applications for
the uptake of mobile banking services could be: SMS Banking, Merchant Payment and International
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Introduction
Telecommunications market competition, specifically the competition of the market for mobile
phones and phone calling services, has been adopted in recent years since when the NEC approved Act
for allowing private telecommunication competitors in the industry. Market competition in Papua New
Guinea (PNG) economy was perhaps the most difficult compared to other pacific countries, particularly
with respect to the geographical, political and cultural struggle over the nature and pace of the market.
This study illustrates the challenges that can be faced in the regulatory capture can give rise to in trying to
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Background History of Telecommunication and Its Policy Reforms in PNG
A plan for a national telephone system in PNG was drawn up in 1964 when a Telecommunication
Division of the Department of Posts and Telegraph was established and ‗overseas‘ expert advice was
In 1973 the Department of Information and Communication Services was established when the
National Broadcasting Commission (NBC) was set up to take over the PNG branch of the Australian
Broadcasting Commission. The NBC became the broadcasting arm of the department. This was a vital
event in PNG‘s history. Given the very rugged topography and the isolation of many clans, radio played a
crucial role in the dissemination of information throughout the land, using an extensive network of
provincial radio stations. Radio has subsequently played a huge role in building a more cohesive society
After gaining independence from Australia in September 1975, the Department of Information
and Communication Services was responsible for information services, communication policy, and
research and development. The newly formed Department of Public Utilities took over the functions and
the responsibilities of the Department of Posts and Telegraphs and became the Division of Postal and
DPTS continued to function as a separate organization until it was incorporated as the Post and
On 9 September 1981 an executive steering committee was set up to examine ways and means of
making a change in the status of the Postal and Telecommunications Services Division to a ‗legal
commercial entity‘. This committee presented its report to the National Executive Committee (NEC;
effectively the Cabinet) on 16 December 1981 and the NEC gave approval to draft enabling legislation.
The Post and Telecommunication Corporation Act 1982 was passed by the National Parliament on 15
February 1982.
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Due to a change in government policy in 1996, the PTC was split up and corporatized. The split
saw the creation of Telikom PNG Ltd, Post PNG Ltd, and the PNG Telecommunications Authority
(PANGTEL).
In 1997 the Department of Information and Communication Services was reduced to the Office of
Information and Communication and there were tighter constraints on its resources. This resulted in a
situation where it was not able to implement its mandated responsibilities. After the 2002 general
elections, however, a new government established the Department of Public Enterprises, Information and
Development Corporation (DPEIDC). Its core functions included national information and
communication policy, rural connectivity and development, and the integrated government information
system. It was also required under the government‘s Medium Term Development Strategy (2005–10) to
PANGTEL was established on 1 January 1997 under the Telecommunications Act 1996. Its
Creation was part of the government‘s policy to corporatize PTC and to divide it into three different
organizations: two service delivery companies incorporated as public companies under the Companies
Act and one regulatory and licensing authority. PANGTEL became the sole technical regulator and
comprises all private and government-owned companies that are involved in the provision of fixed and
mobile telecommunications services such as voice, facsimile, data, cellular phones, video and audio
programs to the general public. The radio communications sector includes radio frequency spectrum and
satellite orbital positions. The radio frequency spectrum is managed according to the Radio
PANGTEL‘s main operational functions with respect to mobile telephony include: the granting of
licenses to carriers and suppliers of telecommunication services and equipment; establishing performance
standards for carriers and monitoring compliance with those standards; regulation of the
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services; promotion of fairness and efficiency in the industry; provision of arbitration to conflicting
With the re-establishment of the Ministry for Information and Communication Services in 2007,
all matters relating to PANGTEL, NBC and the Office of Information and Communication were placed
In December 2005 the NEC handed down a decision to open the market in mobile phone services.
Several policies have been drafted and pieces of legislation amended or repealed since this decision. Prior
to the introduction of mobile services, only two pieces of ICT legislation had been implemented. The first
was a Communication Policy drafted as a result of a Communication Policy seminar in 1978. Then in
1992 the Department of Information and Communication was instructed to begin the process of
formulating a coherent national ICT policy (Department of Communication and Information 2008 pp.2–
3), the result of which was the National Policy on Information and Communication of Papua New
Guinea, adopted in 1994. This latter policy was more comprehensive in setting out general guidelines on
defining ownership, access and content. It emphasized the role of the publicly-owned telecommunications
operator in providing access to rural communities and extending the network to complement economic
development. Privatization plans for the incumbent operator were mentioned; the introduction of
Following the government‘s decision to introduce competition, the ICCC released a press
statement in January 2006 outlining the processes it would follow in fulfilling its obligations (ICCC 2006
pp.1–2). There were to be four main steps: the public tender process would begin on 7 March 2006 and
submissions would close in May 2006; the assessment of the applications would be undertaken by the
ICCC, with the two new mobile providers being announced by mid October 2006 (in fact, the licensees
were announced in September 2006); construction of network infrastructure for the mobile entrants was
tentatively scheduled for December 2006; and licenses would be issued. The licenses were issued on 27
March 2007 to Digicel PNG and GreenCom: the former commenced operations on 17 July 2007;
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Overview of the Telecommunication Environment
Papua New Guinea (PNG) is a low-middle income developing country whose annual per capita
purchasing-power Gross National Income (GNI) of around $2,700 is roughly half that of Nigeria or
Pakistan and quite close to that of Tanzania or Laos (World Bank, 2017a). Papua New Guinea (PNG) is a
nation of opportunities and challenges. As efforts are being made to achieve upper middle-income
country status by 20501 — a key part of PNG Vision 2050 — affordable and accessible mobile
technology is a promising and unique platform for advancing and strengthening social and economic
development. The economy is dominated by extractive industries for export, with the agricultural and
manufacturing sectors aimed overwhelmingly at servicing the domestic market. The population of PNG is
heavily rural with only 13% living in urban areas, but few apart from the capital Port Moresby are of
reasonable size (World Bank, 2017b). It has a challenging geography, being largely mountainous and
With its ability to reach across geographies, income levels and cultures, mobile technology is
ideal for enabling a digital transformation in PNG and leapfrogging traditional brick-and-mortar
approaches.
However, these changes are still in early stages. The recent deployment of new mobile
infrastructure, improvements in network quality and the launch of 4G LTE have supported the expansion
of PNG‘s mobile broadband sector. There are up to 1 million unique mobile internet subscribers in PNG,
primarily in cities where mobile internet penetration grew by 20 per cent in 2018. Yet, mobile penetration
is still low compared to other countries in the Pacific, with less than a third of the population being unique
mobile subscribers.
With a rural population of 87 per cent, there are widespread disparities in mobile phone access
and use between PNG‘s urban centers and rural areas, but also men and women. Many of those who have
a mobile phone still rely on basic GSM prepaid services. The impact of mobile technology across sectors
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is nascent and it is bit early for the Vodafone to understand how the current mobile ecosystem will
To make progress on its digital journey, and strive to achieve the Organization‘s Development
Goals and, PNG government‘s Sustainable goals, Vodafone must overcome some major challenges,
including: poverty and inequality, violence and corruption, natural disasters and climate change.
However, Vodafone‘s potential is vast to build new foundations and achieve goals and accomplish
visions, underpinned by the collaboration between the government, the mobile industry, the wider private
The competition of a digital society that brings benefits to the best competitor will not happen
without a collaborative approach and innovative financing mechanisms for network infrastructure.
Stakeholders need to act now to ensure that Vodafone‘s digital future is inclusive and leaves no one
behind.
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Challenges Facing the Telecommunication Sector in PNG
The complexity of covering rural and some parts of urban is precisely explained. Providing adequate
mobile network coverage of rural PNG, where 87 per cent of the populations live, remains a challenge for
several reasons:
1. Infrastructure
The poor transportation infrastructure, poor utilities infrastructure is also an obstacle for SMEs in
PNG. The major utilities infrastructure impediments Centre on electricity and telecommunications. Poor
infrastructure development especially road infrastructure which has been described as a massive and
pervasive problem in PNG other developments like telecommunications to survive. There is very limited
accessibility through road networks, meaning mobile operators must construct a new road, or use a
Therefore, PNG has a lack of internet infrastructure and coverage has been poor to rest of the
rural areas across country. Vodafone‘s current position of ―insufficient scale and development of a
competitive domestic telecommunication industry to yet develop a mobile network mechanism for spot
and long term markets‖ still needing adequate funding and continuity in the funding for the network
Papua New Guinea‘s 97% of the land is held under customary tenure, with control fragmented
across several hundred local tribal chieftains (Filer, 2014). Land disputes are common in PNG and tribal
issues can arise over which community owns the ground on which a tower is erected. This can lead to
vandalism of towers or limited access to towers, preventing towers from operating. As a result of both
geography and the property rights regime, significant challenges are posed to the deployment of
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High risks resulting from a high crime rate: government facing lack of transparency;
unpredictable changes in government policy; a weak commercial legal framework, including a poor
collateral system.
Law and order is a major problem in PNG. PNG has one of the highest crime rates in the world
(ADB, 2012; Foreign Policy, 2008). In the mid-2000s, Port Moresby was in the top five cities in the
world for murder rates per capita (Foreign Policy, 2008). The INA survey of firms in PNG found that law
and order was the number one concern of business in 2012 (ADB, 2014). Many businesses had been
directly and indirectly affected by crime which gives rise to the high costs of security for running business
in the sector and business owners still want more to be done by the government to maintain law and order
It is generally accepted that the lack of access to appropriate technology is a barrier to Small and
Medium Enterprises and individual citizens to expand communications in PNG (ADB, 2012). Papua New
Guinea‘s population is approximately nine (9) million; thus approximately sixty five percent (65%) of its
In a year of global upheaval, mobile banking provided a financial lifeline. 2020 was a year like no
other. In every region of the world, PNG was one part of the world that COVID-19 triggered a mix of
responses, from school and workplace closures to restrictions on movement to complete lockdown. All at
once, handling cash, paying for daily essentials and conducting business in person became risky, and
more people than ever turned to have greater demand on mobile money transaction as a safer option.
The State of the Industry report looks at what this year of upheaval has meant for mobile money
banking providers, agent networks and the millions of new and existing customers that embraced mobile
However, Digicel and Bmobile didn‘t reach out all populations as demand was very high.
Digicel‘s 2G Lite has said to be slow and cannot reached out 6-7 million plus mobile users whilst
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Bmobile due to lack of internet infrastructure and poor network coverage across many rural areas of the
country. This leaves mobile user‘s need for day-to-day cash transactions remains high.
Relatively no carriers in PNG are providing international call bundles. PNG is a country made up
of many international populations as part as 10% is international community. Another 5% of the PNG‘s
population is living offshore, thus need of international call bundles is very high for the people concern.
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Solutions and Suggestions to Win the First Customer’s Choice
ensure increased network coverage across the country which is fundamental to the development
Vodafone need to supply domestic transmission services to the other carriers which may impede
the ability of Vodafone mobile carrier to develop its own satellite-based and microwave facilities
and other physical network connectivity infrastructure like electricity both within the cities and
In rural areas of PNG, towers must be powered by diesel or renewable energy (mainly
solar), which increases deployment, maintenance and operating costs. Combined with low
population density, low incomes and inadequate access to electricity the ability to access and use
and enhancement to setup across rural areas and some parts of urban areas, it remains a very
important and valuable asset to Vodafone PNG at this time. Moreover, a key opportunity exists
for a transformed Vodafone PNG to make full use of this existing network to supply domestic
transmission services to other carriers in order for Vodafone PNG to have million subscribers
2. Strategic moves to setting up logistics for Vodafone mobile services and Recharge cards;
Vodafone need to establish widespread coverage very quickly and put mobile
phones into the hands of as many Papua New Guineans as quickly and as cheaply as possible.
The novelty of having a mobile phone and of being able to call relatives and friends over large
distances in an economy where physical movement is so difficult will give a huge impetus to
Vodafone‘s efforts to retain its license in the future unlike other competitors.
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Diverse and evolving demand for mobile services should be understood as a
customer specification. PNG‘s unique diversity has created very different usage patterns across
the country. Usage is influenced by several factors: phone ownership (whether the user has a
smartphone or a feature or basic phone), literacy levels (traditional, digital, financial), how much
the user wants to spend on their phone, available coverage (mobile coverage and electricity) and
preferences for consuming content. For example, a mobile phone subscriber in Port Moresby
might prefer accessing information through apps, whereas SMS might be more appropriate for a
coffee grower in the Highlands, and voice calls or IVR (interactive voice response) might be the
most appropriate mobile communication channel for someone in a remote coastal village with a
rolling out to anticipate by designated Commission Sales Agents in various suburbs and
provinces in both urban and rural areas. In order for these roll outs to be spread as fast as it can,
each Commission Sales Agents should be advised rigorously to perform this task in their own
cultural societies. Management need to set daily and weekly goals how many populations for
each Sales Agents as a target in their own obliged societies they comes from. This will minimize
the risks of Vodafone Agents may involve in tugs or robbery because they belong to the same
cultural ethnic groups as country is currently facing law and order issues.
Designated Commission Sales Agents can also allow buying Vodafone Cards in
bulks for wholesale price using their own money so they can retail to customers to make their
own commissions. This will fast the recharge cards logistics from wholesale to customers.
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“The provision of financial services via a mobile platform, particularly mobile money, is one of the most
dynamic innovations in the mobile industry and has provided significant social and economic benefits for
users. Mobile money is expanding access to financial services. By providing the poor with the financial
services they need to manage cash flows and to save, the mobile money industry is helping eliminate
poverty and supporting economic growth. Additionally, mobile money can facilitate payment of utility
bills and school fees”
Governor Loi Martin Bakani, Bank of Papua New Guinea
increasing as demand also arises for non-physical payments; some regulators are now declaring
mobile money agents an essential service. As more consumers became uncomfortable handling
cash, many Vodafone subscribers will turn to mobile money banking to purchase food, clothing
workers send home to their families – are a unique and powerful source of private capital and
mobile phone users. It‘s about time, Vodafone need to play a vital role of ‗Connectivity‘ among
businesses and individuals. This will shift from cash to digital payments and also led to an
upsurge in revenue collection and improved operations for government ministries, departments
and agencies.
Refer Tech is a data collection, analytics and health innovation company formed
in Papua New Guinea in 2016 by two local entrepreneurs (Mr. David Valentine, Co-Founder,
Refer Tech). The company focuses on the collection and processing of information for data-
driven development in emerging economies, with a strong focus on health. Vodafone mobile
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devices can instill such informative data to be the first customer choice mobile device and data
In 2018, Refer Tech was awarded a grant to fund the development of a web-based patient
management system and data analytics engine specifically for use in an urban tuberculosis clinic
in Port Moresby. The system was designed to improve the efficiency of patient-health worker
interactions by automating and digitizing several steps in the process, from drug dispensation to
data collection. The analytics engine provides previously unavailable insights into the data for all
Tuberculosis is a complex and key regional health issue in PNG where disease metrics
employment status. The Refer Tech team hopes to have over 1,000 registered patients within 12
months of system installation in mobile devices, to provide much-needed data and analytic tools
5. Haus Lain
In 2012, with the support of DFAT, Population Services International (PSI) set up an
SMS service called Haus Lain to encourage positive behaviors around a range of health issues,
including maternal health and sexually transmitted infections (STIs). Using any Therefore, by using
any Vodafone account, users could opt-in to the service by sending a key word, and then receive free
weekly health tips in English or Tok Pisin to their mobile phone. The service was promoted on radio
stations, and within one month over 10,000 people had signed up to the service, and after six months
this had grown to 30,000 people. Although it was an innovative approach to communicating with
beneficiaries in rural areas, this service eventually ceased due to funding and questions about impact.
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The digitization of agricultural value chains is an emerging opportunity for
developing countries like PNG. Holistic enterprise solutions for the agriculture sector might
include a combination of digital payments for crop procurement from smallholder farmers, digital
farmer records, agricultural information and track and trace services. These digital tools enable
agribusinesses to better control and monitor operations, make transactions more transparent and
establish effective communication channels, both internally and with smallholder suppliers.
Agricultural value chains contend with a variety of inefficiencies: theft and fraud, the
time and travel required to receive cash payments for crops and overall lack of visibility for
buyers and sellers. However, a range of digital tools can help to improve business performance
for farmers and agribusinesses and ultimately create a path to financial inclusion for farmers.
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Conclusion
Notwithstanding an eventful process to liberalize the mobile telephony market in PNG, the
benefits are already large and appear likely to become much larger in the future. Call rates have been
reduced significantly and coverage has in the pace of increasing hugely and looks to become almost
universal. In a land with a terrain as difficult as PNG‘s, the benefits to the many remote communities of
being able to interact with other people cannot be underestimated. Already the availability of mobile
phone services has done much for social interaction as well as being helpful in medical emergencies,
phone banking and many more. Moreover, the Vodafone to take mobile banking initiatives now to
underway will be enormously helpful. Until now, banking services in rural areas have been very limited.
Further, the provision of market pricing information through mobile phone services will be very helpful
because the livelihood of the bulk of the population is from agricultural and fishing activities back in the
rural societies.
Another lesson is that technical assistance in making the case for reforms is vital. Once it was
seen that the introduced competition would have significant benefits, including for those in rural and
isolated areas, the general public‘s support for the liberalization of the mobile service sector increased
dramatically. As a result, it became much more difficult to resist or reverse the reform. Therefore,
convincing the public that services will improve and prices will be reduced is critical to gaining their
support for the introduction of competition. Vodafone need to play its role right here.
While this report makes specific recommendations by sector, there are other broad areas that need
to be addressed to realize Vodafone‘s potential as a digital competitor. First, Vodafone PNG needs
robust regulation to encourage competition and enable innovation. This could allow new players to enter
the ecosystem, potentially ensuring appropriate services reach the last mile. Second, access to electricity
is a fundamental requirement of any digital ecosystem and must also be a priority for Vodafone when
going to rural and setting up towers. Finally, high levels of corruption are curbing investment in PNG and
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creating additional costs and risks for existing investors. Given that significant international investment
will be needed to improve the country‘s infrastructure, the Vodafone PNG needs to address issues that
may arise in favour of PNG government for a lengthy survival of the business continuity.
There is no silver bullet, but this case study by four (4) committed Vodafone Commission Sales
Agents offers recommendations to create a more enabling environment for Vodafone mobile technology,
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References
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Mobile Technology in Papua New Guinea. London, United Kingdom: GSMA.
Crawford School of Economics and Government. Duncan, R., (n.d.). The Australian National University,
Canberra, Australian Capital Territory. Retrieved: (ronald.duncan@anu.edu.au)
Stanley, L 2008b. ‗Regulating the telecommunications sector in Papua New Guinea‘, Pacific Economic
Bulletin, 23(3), pp. 135–40.
Digicel PNG 2008. ‗A monopoly on international communications will mean poorer service and less
Phone Networks: Media release, Office of the Commissioner, ICCC, Port Moresby.
Foreign Policy, 2008. The List: Murder Capitals of the World. Foreign Policy, 29 September.
Asian Development Bank (ADB), (2012). Papua New Guinea: Critical Development Constraints. Manila:
Asian Development Bank.
Asian Development Bank, (2014). The Challenges of Doing Business in Papua New Guinea. Manila:
Asian Development Bank.
Department of National Planning and Monitoring, (2010). Papua New Guinea Development Strategic
Plan 2010–2030. Port Moresby: Department of National Planning and Monitoring.
Institute of National Affairs. (2013). The Business and Investment Environment in Papua New Guinea in
2012: Private Sector Survey Report. Institute of National Affairs. National Capital District: PNG.
Retrieved 30th April, 2019 available at:
http://www.inapng.com/pdf_files/Private%20Sector%20Report%20Final%2012Feb.pdf
Independent Consumer and Competition Commission (ICCC) 2007. Time to get the facts straight on
mobile competition: Media release, Office of the Commissioner, ICCC, Port Moresby.
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Appendix
The work contained in this case report has not been previously submitted to meet any requirements for a
award at this or any other higher education institution. To the best of our knowledge and belief, the report
contains no material previously published or written by another person except where due reference is
made.
Signatures; ____________________________________