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Word from an online source about upgrades to the Southern Cross Cable infrastructure. Expanded capacity to deal with the growth in traffic expected from upcoming move to full deregulation and increased competition. Unless and until FINTEL is forced to give up its exclusive control of Fiji’s international telecom gateway, we will not have real competition in the internet market.
Fiji’s ICT sector is expected to benefit greatly from the upgrading in capacity of Southern Cross Cable Network (SCCN)… SCCN will have ten times its original capacity once the upgrade is complete. George Samisoni, manager for commercial and business development and Fijian telco FINTEL, said that the upgrade would result in more capacity available for FINTEL to purchase in order to cater for continuing demand. He added that the capacity upgrade will also allow FINTEL to more readily face competition when Fiji’s telecoms market is fully deregulated in June 2009
Note: Due to a software issue, posts were less frequent the last few weeks. This has been resolved. Please expect posts to return to their normal rate.
This week, news comes from American Samoa where legislators have approved funding for a nundersea fiber optic cable to carry internet traffic between American Samoa and Hawaii.
From a Radio New Zealand story:
The government’s investment in the Pac Rim East Cable, which will connect American Samoa to Hawaii using a cable now servicing New Zealand, is nine million US dollars.
Looking back at my last two posts, what is happening in American Samoa might be the only way to introduce real competition for internet service in Fiji.
The silence on how deregulation will proceed for broadband internet service in Fiji is not a good sign. The ‘functional separation’ that is required to pry the internet backbone out of FINTEL’s control should be at the core of any discussion on introducin competition.
Real progress may only come with laying a new fiber optic cable to compete as an international gateway with FINTEL and the Southern Cross Cable.
Ultimately, freeing Fiji from the shackles of slow internet speeds and poor service may only come with additional investments of the sort made this week by American Samoa.
So there is no confusion: Fiji already has infrastructure in place to handle all of its telecommunications needs. It’s the exclusive arrangement that FINTEL holds as ‘international gateway’ that is the real hindrance.
Moving forward, the new Telecommunications Authority of Fiji will have this is their first real test as a regulator.
Is it time to get concerned about the lack of news on internet deregulation? Will this current round of deregulation include bringing in ISP companies that can challenge FINTEL directly? Or, have we reached the height of the deregulation wave with Digicel’s entrance into the mobile market and high cost of internet access will remain as it is.
If something is not done about the high price of internet access in Fiji, we can say that the present attempts at deregulation have failed.
Lowering internet costs is directly tied to lowering the cost of doing business in Fiji. IT backoffice operations have been slow to take root in Fiji because of the ridiculously high price of internet service.
In Fiji, a key challege is providing access to people who live in remote island and rural settings.
Recent developments in technology have blurred the lines between cellular and broadband internet connections. This is what is referred to as the convergence between broadband internet and cellular technologies.
An example of this is cutting-edge technology recently launched in the US. Manufactured by Samsung, the Airave unit (USD $50) is available for sale from a US cell phone provider:
Sprint is offering a new service in select areas of Denver and Indianapolis that delivers customers unlimited mobile minutes while at home. Dubbed Airave, the new femtocell-based system uses your home broadband connection to extend cellular coverage and offer unlimited calling for an additional $15 per month
The benefit of the femtocell-based system should be clear for Fiji. 
Deploying cell-phone towers is a very expensive proposition. But, WiMAX towers can effectively cover a similar range with broadband internet signal at a fraction of the cost.
Mobile providers Vodafone and Digicel stand to gain by selling these units to subscribers (ensuring brand loyalty) and the people of Fiji are winners because effort can be concentrated on building a WiMAX network coverage that is within reach of every citizen of Fiji. In order for this to happen, government officials and business leaders have to realize the benefit of working together.
The mobile providers cannot be expected to sign onto ‘open infrastructure’ but the development of this femtocell technology might be the development that could get these companies to support the concept of a public-private partnership to build WiMax coverage throughout Fiji (see earlier posts on Enabling Universal Access).
For an in-depth discussion of competing 3G and 4G wireless protocols (WiMAX vs. Long-Term Evolution cellular), please refer to this article.
… LTE will take time to roll out, with deployments reaching mass adoption by 2012 . WiMax is out now, and more networks should be available later this year. As for speeds, LTE will be faster than the current generation of WiMax, but 802.16m that should be ratified in 2009 is fairly similar in speeds.
After assessing all the technologies involved, the reasonable conclusion would be that WiMAX technology is where Fiji should be concentrating its effort. The convergence of broadband internet and cell phone technology is what the future holds. With right-thinking policy, Fiji has the chance to harness these developments to dramatically improve the reach and quality of connectivity.
… more specifically a cocktail, hosted by the same people who they should be questioning. Instead, what do we get? Four lines about a corporate cocktail.
The biggest reforms to Fiji’s telecommunications industry are underway and the people who are supposed to inform us of developments have been made complacent with a few stubbies.
Readers should recognize that the Fiji Times is ill-equppied to raise their concerns with stakeholders.
Of course, this raises serious questions about conflicts-of-interest. Should news reporters accept being wined-and-dined by corporate entities at the center of on-gong developments?
Are they serving the best interest of their readers? To date, we have yet to get a serious statement from anyone inside ATH or TFL about the process to deregulate the industry.
TFL hosts media (Wednesday, December 12, 2007)
IT was one of those functions journalists from all media outlets usually look forward to.
Telecom Fiji Limited hosted the local media members to a Christmas cocktail.
This was no ordinary cocktail as it was held at the TFL’s corporate box at the Post Fiji Stadium.
And with the cool Laucala breeze and the lovely food it was definitely a night to remember for those who attended.
Does TFL understand something we don’t?
They can keep the public in the dark by supplying the boozehounds of the media?
… it won’t even make the newspapers according to analysis of one publication.
From Islands Business:
Not in tune? Someone was obviously sleeping in a local media newsroom in Fiji when the country’s telecommunication market opened up last month. By the early hours of November 20, 2007, news had broken that an agreement had been reached and signed by the Fiji government and the incumbent telecommunication carriers, which would effectively open up the market. Before midday, two local online news portals had carried their versions of the news while the one that apparently won a local award for the “best local news/information media-based website 2007” was obviously not aware that an event of historic proportion to the nation and business in the country had just taken place.
Sadly, perfect description of the media in Fiji on so many levels.
The article is a great read and can help you get to the bottom of what is at stake with present reforms. Here’s an excerpt:
FACT ONE:
The Exclusive Licenses under the spotlight are:
Telecom Fiji Ltd (TFL) - exclusive license in domestic market
“TFL’s telecommunications license is for a term of 25 years commencing 1 January 1990. Under the license, TFL has an exclusive right to establish, operate and maintain a telecommunications system for the purpose of providing telecommunications services specified. On expiration of the license, the government has the right to purchase TFL’s assets at an agreed price or as determined by arbitration in accordance with the arbitration laws of Fiji.”- ATH share offer document, 2002, page 31
Vodafone Fiji Ltd - exclusive license in mobile telephony market
“Through a license agreement between TFL and Vodafone Fiji, TFL, in exercise of the rights and powers conferred upon it, granted Vodafone Fiji in May 1994, the sole and exclusive rights and authority to the exclusion of all others (including TFL), to establish and operate a cellular mobile telephone system in Fiji and its surrounding waters. The license permits the connection and maintenance of the connection of Vodafone’s Fiji cellular network to TFL’s PSTN. The parties agree to interconnect their respective telecommunication system.”
- ATH share offer document, 2002, page 75.
FINTEL’s license…
“FINTEL’s telecommunication license commenced on 1 January 1990 and is for a term of 25 years. On expiration of the license, the government has the right to purchase FINTEL’s assets at an agreed price or as determined by arbitration in accordance with the arbitration laws of Fiji.”
-ATH share offer document, 2002, page 34
FACT TWO:
ALL three companies are linked to the publicly listed Amalgamated Telecom Holdings (ATH).
ATH owns 100 percent of TFL.
TFL owns 51 percent of Vodafone Fiji.
ATH also, under a management agreement dated 16 December 1998, “holds the right to manage the Government’s 51 percent shareholding in FINTEL for a period of 20 years, with the option to renew for an additional 10 years. Under the agreement, ATH is entitled to receive 80 percent of the government’s dividend payment from FINTEL as management fee.”
- ATH share offer document, 2002, page 33
FACT THREE:
ATH is majority owned by the Fiji National Provident Fund who has over 58 percent shares in it. The Fiji Governments owns 39 percent, institutional holders own two percent and the rest are owned by the Fiji public.
FACT FOUR:
Trading in ATH shares was suspended on November 26, 2007 following speculation over what was contained in the Radisson Telecom Accord.
But this was after an interest was expressed by a potential buyer bidding for 200,000 shares at 75 cents.
As this edition went to press, the Fiji government announced that cabinet has endorsed the Radisson Telecom Accord.
Deregulation moves forward with announcement of an auction to determine which companies will receive a license to compete in Fiji’s mobile market. Vodafone has enjoyed monopoly status for 13 years, under the previously negotiated deal which gave monopoly status to ATH companies.
From FijiLive:
It is understood companies that have been shortlisted can enter the auction and details on this are being finalized by the Commerce ministry.
Read the article here.
It’s really funny. A country that has been held back from competition for so long is pretty much in the same position as the United States. The auctioning of mobile licenses is going on as the same time that the US Govt. is undergoing the same process to auction a portion of the broadcast spectrum being vacated by television stations. Here’s an excerpt of an article from the San Francisco Chronicle:
The minimum bid is $4.6 billion for the C block of 700 megahertz wireless spectrum, which is being freed up as part of the federally mandated shift from analog to digital television by 2009.
Of course, things move at a different pace in Fiji. The Govt. of Fiji should also put several stipulations into the licenses. Requiring the bidders to pay into a pool annually, which the govt. can use to develop a Wi-max network covering the country especially rural areas out of mobile coverage. These networks have been unveiled in many parts of the western United States and have all sorts of added-benefits like helping law enforcement communicate in these remote areas.
Making sense of what’s going on in Fiji’s telecommunications sector is very important to understanding the new opportunities that are now presented.
Without much public debate, 13 years ago the government of Sitiveni Rabuka entered into an exclusive access agreement with ATH.
The arrangment gave monopoly status to providers in phone and internet services.
Exclusive license has meant immense profits for shareholders of ATH (which include the government’s minority stake) while chaining users to high prices and terrible service.
With assistance from World Bank officials, the interim administration has negotiated a payment to satisfy the shareholders of the existing companies.
Once this is approved, the government will approve the applications of providers who can offer services in internet, mobile, and phone services.
Already local partnerships are forming and foreign companies like Digicel are gearing up to enter the Fiji market.
Competition in this area will dramatically lower prices and offer new services.
The people of Fiji stand to gain.
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