{APPENDED July 4, 2011 SPIN is considered dead at this point}The Coconut Wireless caught up with Remi Galasso, CEO of SPIN via email recently to get this thoughts on the announcement of the Commerce Commission’s ordering price reductions from FINTEL and cable operator Southern Cross Cable Network.
Galasso filled me in on infrastructure developments in the region, including the announcement that the Honotua cable ( Hawaii to Tahiti link) has achieved the requirements necessary to get FCC approval for operation. That cable should be operational in a matter of weeks.
Concerning his own venture, he had this to say:
SPIN cable will land in Auckland, Norfolk Island, Noumea, Suva, Wallis, Apia, Pago Pago and Papeete, and will have a branching unit for Vanuatu.
He then went into specifics of the Commission’s price reduction:
It shows that Southern Cross / Fintel pricing policy has been until now totally unfair and it has been a clear blocking point for broadband development in Fiji. As a Fijian ISP or telco, how could you trust a cable operator that divide its price by 3.6 just because competition is coming ?
This last question is important for discussing the impact of the Commerce Commission’s decision. There are factors other than price that will determine an ISP’s willingness to source bandwidth from SCCN.
Mr. Galasso is confident he will be able to deliver SPIN to promised customers in the face of such maneuvers to block competition:
Southern Cross / Fintel are now trying to block competition by proposing better pricing and trying to sign long term capacity contracts, which means that they don’t feel confident competition is a real good thing.
Like Honotua and Gondwana, SPIN has backing from the French government, meaning the project is almost certain to go ahead. Galasso describes negotiations with telcom partner in Fiji as being in advanced stages.
The arrival of SPIN cable infrastructure would spur competition and development of broadband in Fiji. Relying solely on SCCN infrastructure with the current regulatory framework is an impediment to this plans.
The Coconut Wireless 
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July 4, 2010 at 9:45 am
dionisia
FINTEL’s Landing Party Agreement with Southern Cross gives it management right of some sort over the cable landing at Vatuwaqa. I get the impression this LPA is difficult to circumvent, so I am curious that if SPIN lands in the pacific countries as proposed, how would they pick who manages and looks after the landing? given the needed technical expertise, etc, to manage such facilities and in pacific countries you can’t find this expertise except in existing telecoms, how will SPIN deal with this issue? Especially when SPIN official once said of the SPIN deal that:
“SPIN SA will buy, operate and maintain the submarine cable; provide a minimum capacity of 155 Mbts (1 STM-1) to the country and transport the country traffic from/to the regional hubs of Sydney and Hawaii. These countries will buy, operate and maintain the landing station to welcome the SPIN cable to the country and pay an annual fee to SPIN for transporting the (Internet) traffic.”
-Islands Business article.
Have there been talks on who exactly will be responsible for the cable on sovereign soils? I am curious to know the nature of any such progress.
July 4, 2010 at 1:54 pm
Coconut Wireless
FINTEL’s Landing Party Agreement with Southern Cross gives it management right of some sort over the cable landing at Vatuwaqa. I get the impression this LPA is difficult to circumvent, so I am curious that if SPIN lands in the pacific countries as proposed, how would they pick who manages and looks after the landing? given the needed technical expertise, etc, to manage such facilities and in pacific countries you can’t find this expertise except in existing telecoms, how will SPIN deal with this issue? Especially when SPIN official once said of the SPIN deal that:
Another Cable operator should have access to the Vatuwaqa Landing Station. This would have to be done by employing some form of effective regulatory regime.
I have outlined the two competing visions. Facilities-based approach favors investment in new infrastructure. However, it’s the vision of sharing that is now being employed in regulatory interventions around the globe. I’ve written extensively about our neighbors.
At the forefront of the debate, they are attempting to claw control of infrastructure from incumbent operators who hold a huge advantage in making all sorts of decisions about broadband usage.
Singapore’s efforts to control the infrastructure with clear wholesale pricing is what we should be aiming for in Fiji. Try to get a proliferation of competitors at the retail level.
And the only way you can do that is by leveling the field.
It makes BOTTOM LINE sense and Telecom NZ officials are on record saying that it has been more profitable from them.
For SPIN, they will need to partner with someone the size of Digicel, who is well placed to benefit from another regional link. These kinds of anchor tenants are hard to come by.
Without a competitor for backhaul, you will see this site continuing to argue for regulation that will promote more sharing. Functional separation is the word of the day and FINTEL must be divided into a Wholesale and Retail Division, all of which hinges on clearing up the ATH ownership situation.
July 5, 2010 at 11:48 am
Josua
SPIN will need a local partner with the level of capital and network capacity to run a landing station. FINTEL had the benefit of Cable & Wireless and Fiji taxpayer dollars to set up its Vatuwaqa LS and infrastructure.
Yes the ATH issue is where the crux of the problem may lie as far as functional separation is concerned. There is an going problem with ISP, Connect, which touts itself as a subsidiary of Telecom Fiji. Where there is internet outage, for landline subscribers, Connect is oftten powerless to do anything because the lines belong to TFL its mother company.
(Views expressed here are mine alone and not necessarily reflect the opinions of any organisation or group I’m associated with, local and overseas)
July 5, 2010 at 12:37 pm
Coconut Wireless
Absolutely, only operator with that kind of capability would be Digicel, so the chances don’t look very slim.
I put this post up even though the status of SPIN is uncertain because it’s important for readers to understand where real competition would come from in Fiji.
With only FINTEL/Southern Cross in the picture and no likelihood for competition, a vigorous regulatory scheme modeled on those accepted by operators in Australia, New Zealand, and Singapore make sense.
Openess and competition will be better for all, especially the consumer.
July 6, 2010 at 10:42 pm
Josua
Digicel currently has its own satelite earth station in Nadi and directs a bit its international traffic through this, although it is still very dependent on FINTEL’s landing station. Digicel’s international call rates are less that offered by Vodafone, the latter having to rely solely on FINTEL. Perhaps someone could pose the question to Digicel CEO Mr Matt Davey (Matt.Davey@digicelgroup.com) on whether it will be able to provide the necessary investment to accomodate a landing station with SPIN.
July 7, 2010 at 4:04 pm
Coconut Wireless
Without a second competitor to challenge the current structure, legislation will have to be dramatically different, as it will be much more important to restructure the sector to achieve desired outcomes.
Sharing is the word of the day and these entities will have to learn what it means.
July 13, 2010 at 11:04 am
Nikki
Your reporting of the situation in Fiji does not reflect the true situation.
The recent changes in the Fijian telecommunications industry have been brought about through regulation. The Fijian Commerce Commission made a Determination in April 2010, finding that FINTEL had substantial market power arising from its effective control of the access to Southern Cross capacity from the FINTEL cable landing station in Fiji. As a consequence of this finding, the Commerce Commission made a Price and Access Determination for Southern Cross Capacity and Network on 4 June 2010. This Determination regulated the price of capacity sourced from FINTEL and also required FINTEL to permit other operators to have direct access to the Southern Cross Network, allowing other operators to buy directly from Southern Cross.
The regulation places requirements on FINTEL not Southern Cross. It regulates the price FINTEL sells at not Southern Cross. The Commerce Commission did not have an issue with Southern Cross pricing, but rather were pleasantly surprised that Southern Cross has a longstanding policy to price the same out of Fiji as Australia. As with New Zealand pricing, the prices offered to Fiji are the same as those offered by Southern Cross to Australian customers and these prices are set in the very competitive Australian Market. The Commerce Commission are therefore regulating the price FINTEL can on-sell the capacity they purchase with the expectation that this will flow through to the end user.
Southern Cross operates in a highly competitive market out of Australia and the Pacific reaps the benefits of this through Southern Cross’ non-discriminatory pricing policy that is derived from the competitive Australian market.
July 13, 2010 at 1:24 pm
dionisia
@Nikki: After the deregulation of the international gateway in June or July this year, we were told by FINTEL that other ISPs were signing up with them to connect internationally. It seemed that while anyone could now connect internationally without having to go through FINTEL, as was the case previously, if you wanted to do it through the Southern Cross, you had to go through FINTEL. Why? Because, according to FINTEL, an existing arrangement independent of Fijian regulation called the Landing Party Agreement, nominated FINTEL to oversee and manage the Vatuwaqa landing facility. One FINTEL official told me once that if other people wanted to connect to Southern Cross, and could build their own pipe and own landing facility, they are free to connect any way they want to the Southern Cross, but to go through Vatuwaqa landing, they will have to go through FINTEL.
What I want to know is whether this LPA could be taken out of the picture. If so, then the Vatuwaqa landing can be a free for all and anyone can just walk in and install their own switches or whatever.
But this would be absurd because that facility needs someone to manage it and there are also security issues involved. So, I guess this comes back to what Krish is advocating – the need to do functional separation. I would support Krish’s views that there is a real need to separate the Vatuwaqa landing facility and make it independent from FINTEL’s commercial operations. Govt should seriously look into this. If it’s difficult to sort out the ATH shareholding issue, then at least start with separating the landing facility from FINTEL’s commercial interest. And then you can have people like SPIN also landing in Vatuwaqa and we won’t have an issue with technical capacity because we already have people there with the knowledge to operate a landing facility.
July 13, 2010 at 11:02 pm
Josua
Just to clarify the Commerce Commission’s recent decisions.
13/04/10 – CC determined that “FINTEL had substantial market power over the cable landing station”. (Section 32, Commerce Act). A determination on the remedies were to be made later.
04/06/10 – As part of the remedies to address FINTEL’s substantial market power via the 13/04 decision, CC made the determination on FINTEL’s wholesale bandwidth prices on a staggered approach beginning on 01/07/10 to 01/07/2011.
On access to the SCCN, Part 9.1 of the det. notes: “The Commission is satisfied that access to the SCC network is appropriate and possible to promote competition and it has therefore decided that operators can have access to SCC network subject to normal commercial trading terms and conditions which are stated in this determination.”
Part 9.2: “9.2 Access to the SCC network, for the purpose of this determination is defined that “any operator may choose to procure and purchase or lease capacity from SCCL or any other supplier of capacity on the SCC network subject to the normal commercial trading terms and
conditions for FINTEL to facilitate the access requirement.
Part 9.3 This access facilitation is subject to the operator having satisfied all the following requirements:
9.3.1 Landing Party Agreement process for the landing of capacity;
9.3.2 Facilities interconnect technical protocol for co‐ordination of access;
9.3.3 Commercial terms and conditions obliging FINTEL to provide;
9.3.3.1 All facilities interconnect services;
9.3.3.2 Ongoing operations and maintenance support required of the Landing
Party;
9.3.3.3 Co‐locations services that provides for the sustainability of the access long term.
9.4 On application by a third party, FINTEL is obligated to facilitate access for the landing of an operator’s capacity and the delivery of this shall be within 6 weeks.
July 20, 2010 at 2:07 pm
dionisia
Thanks for the clarification Josua. My apologies, I was clearly out of date on this one.
May I have a simple interpretation of this determination by CC?
Does this mean that ISP X or Telecom company Y can go directly to SCC Ltd, buy the bandwidth and FINTEL is obliged to get that capacity directly to them (of course with the necessary requirements)…
If so, I guess it’s very good news for these companies. Please, a clarification on the interpretation of the above determination.
July 20, 2010 at 3:09 pm
Josua
Thnaks.
The crux of this determination was setting the wholesale bandwidth prices that FINTEL charges the telcos. This new pricing was effective from 1st July 2010, with another reduction on 1st Jan, 2011 and then 1st July 2011.
Now on accessing the SCCN (South Cross Cable Network), the telcos can connect but under the normal commercial trading terms and conditions for FINTEL to facilitation the access requirement.
Now, the telecos are not going to access the SCCN overnight. That’s technically and commercially unrealistic. This will happen once the telcos iron out the TORs and technical requirements with FINTEL. In the meantime, the Commission’s wholesale bandwidth prices are in force.
Hope this simplifies things for your.
Cheers..
January 27, 2011 at 11:30 pm
dean
Hi there,
Has spin landed and come on line now? They dont seem to have a corporate website?
– D.
April 17, 2011 at 7:30 am
Coconut Wireless
SPIN is dead-on-arrival.
April 17, 2011 at 12:49 pm
dean
Thas a real shame. Any media coverage or commentary you could link to?
April 17, 2011 at 1:13 pm
josua
Vanuatu government and Alcatel L have teamed up to link a marine cable to Fiji’s FINTEL SCCN landing station. This should mean bigger/faster bandwidth and cheaper rates for Vanuatu customers, and also calls from Fiji should drop as it is cheaper to call Australia than our island neighbour!
April 17, 2011 at 3:41 pm
Coconut Wireless
The nature of the industry is such that there is rarely news of a new venture and information has to be pieced together from industry conferences and such. So, if there never was news of the project launch, then well… you get the idea.
SPIN or a similar project connecting New Caledonia and French Polynesia would only go ahead with French government support.
Don’t hold your breath.
April 18, 2011 at 12:54 am
dean
Having recently been in tahiti, i can say from first hand experience that its really fast – even in the outer islands. In fact the latency is lower than here in australia. I dont know how affordable it is for locals, as i have no idea what peoples budgets are like etc. Polynesian Francs were troublesome enough to convert to AUD all the time as it was!
That aside, having also been to both Tonga and the Cook Islands, I know these people are just as keen to use the internet as anyone else and English is spoken well enough that foreign content will be relevant to them.
It therefore surprises me that more investment hasnt been made in connecting the pacific islands to each other and on to the rest of the world. Regardless of the politics of French protectorates.