Definitely, reason to celebrate

The recent defeat of South Africa’s Springboks at the Rugby World Cup may have resulted from their players’ desire to return home quickly and snap up some very enticing new pricing plans available for broadband service. Despite the rugby loss, South Africa is poised to become the Southern Hemisphere’s leader in telcoms.

A retail pricing war is underway in South Africa. Vodacom, MTN, incumbent carrier Tellkom, iBurst, and others are dramatically lowering prices while improving consumer choice and service quality.

An example of some of the changes:

…stepping up to the plate is MTN, which has launched an unlimited and uncapped data promotion that gives customers navigating options on MTN’s network at peak HSPA+ speeds from as little as R289 (FJD 70) a month.

…And iBurst has also introduced new data packages ranging in price from as low as R49 (FJD 11) per month for 1GB to 50GB at R445 (FJD 105).

New devices such as smartphones and tablets drive consumer demand for data. Serame Taukobong, MTN South Africa’s chief marketing officer, said that with the increase in smartphones and tablet technologies data usage has gone up:

“We have seen a significant number of our customers taking up latest smartphones, tablet PCs, wireless routers and laptop deals that MTN is offering. This promotion is a response to the increased data appetite that comes with the usage of these devices,” he said.

At the same time, the Vodacom Apps Store has reached 100,000 downloads in its first month of operation and the company is now launching a program to support local talent in applications development.

New devices driving consumer demand for data

South Africa has achieved that enviable balance where the pipes are in place, and there are adequate numbers of players at wholesale and retail level to drive widespread adoption. As more consumers buy smartphones and tablets, increased data usage will enable even more volume discounting. Most importantly, there will be a user base in place to support an app development community that will have a local market of millions who are in position to buy their creations.

This thriving ecosystem is something the Pacific Islands can only dream of—as I was reminded by a local telecom CEO who said, “we don’t do applications and services”. You might as well be telling me that you don’t do the future. So much for all the empty rhetoric on ‘innovation’. 

Several weeks ago, I came across this new Submarine Cable Map from Telegeography Research. It’s a great visualization for understanding how the underpinning physical layer of the Internet actually works. By clicking a cable on the map, you can view when it came into service, locations it connects and the companies that own it. Note that cables appearing in gray are projects expected to come online in the near future.

The map reveals a lack of infrastructure in the Southern Hemisphere while, the East Asian corridor reveals the most number of new cables coming into service.

Around the time I started writing this blog in 2006, S. Hemisphere nations of disparate size such as Fiji, Australia, and South Africa faced the same dilemma: lack of cable infrastructure resulting in very costly wholesale pricing.

Cable projects ready for service in the near future shown in gray

In that time however, Australia and South Africa have pushed forward with several new cable projects. In October 2009, Australia added the Pipe Pacific Cable-1 (Read 2009 CW Post) and has since seen dramatic reduction in Internet costs for users.  South Africa has several cable projects that will be ready for service in the near future. As a result, their consumers are beginning to taste considerably lower prices.

Meanwhile, Fiji and New Zealand, without real competition at the wholesale level lag considerably behind as seen in this table comparing budget plans:

This is not the best comparison as the pricing for Fiji and South Africa are from mobile service providers, while ANZ pricing is for fixed-line service. Still, it does help to paint the contrasts. South Africa is poised for major competition as one mobile provider now offers an unlimited cap service for FJD 70. 

If there is one variable that has the most effect on retail Internet pricing, it is competition in wholesale.

Barring that, only an effective regulatory intervention can bring about a more competitive outcome. It is no coincidence then that New Zealand and Australia have been at the forefront of movement to enact functional separation of incumbent operators.

Taking a closer look at the South Pacific region reveals some interesting information. If you recall, the SPIN project promised to connect New Caledonia to Tahiti, via the islands in between. It does not appear on the map and its unlikely it ever will. The Governments of Vanuatu and Tonga are investing in cables connecting to Fiji’s Southern Cross Cable connection that should come online in the next two years. Other cables that have come online in the past few years are Gondwana (New Caledonia – Sydney), Honotua (Tahiti – Hawaii) and ASH (American Samoa – Hawaii).  

The Black Star, shining down

Filtering through a great many articles on ICT and development, I came across the example of the mFarm initiative in an article on Ghanaweb. The project is part of a wider policy drive to increase agricultural output in Ghana.

The issues surrounding the lack of information in the agricultural food supply chain were on my mind when I had opportunity to catch up to my long-time friend, Corneliu Cotofana–entrepreneur/engineer. I described to him the difficulties growers, suppliers, and buyers contend with operating in an information vacuum and we discussed some of the policy initiatives in Ghana. Before long, we realized that there was enough of an engineering problem and policy challenge to merit a collaboration. 

reuniting to fight for food security, more dangerous than battling drug lords

So, Ladies and Gentleman, we would like to introduce our joint initiative:

Farm-e, a combination SMS and web-based market information exchange, decision-support tool, that will use technology to build the linkages to support planning, production and marketing. For the first time in Fiji, it will be possible to have a real-time birds-eye snapshot of agricultural food production at the macro level. Our mission is to have the information serve the purposes of growers, suppliers of seeds and fertilizers, buyers and exporters, and everyone involved in the policy discussion around food policy.

Across the developing world, agricultural output falls short of its potential because of a lack of linkages between the different players involved. Growers face uncertainty about whether they will find buyers for their crops. Suppliers of seeds and fertilizers are never certain how much stock to keep on hand. Buyers, made up of consumers, food processors, and exporters are at the mercy of irregular supply.

The mFarm initiative was so compelling to me because the wider policy initiatives achieved a 15-20% growth in income for farmers, while lowering transaction costs some 30%. For people with the lowest of incomes in Fiji, these possibilities represent a revolutionary, not evolutionary leap. 

Please remember that  the collaboration between Corneliu and I, would not be possible without the near ubiquity of mobile phones in the developing world. It’s only because this device is already in the hands of so many that we can think about how we can try to transform it from its intended purpose of social communication device to business tool.  

Looking slightly further ahead, we have a rough outline of how we expect to proceed over the first year. Software development should take take 6-9 months. Toward the end of that time frame, we hope to bring in the first round of early-adopters and beta-users to help test the system and provide feedback. Once design and implementation with telecom partners is achieved, then we undertake the challenge of marketing on the national level.

We expect Farm-e to change and evolve as we work to ensure timely and relevant data is available to facilitate good decision-making by our users 

We’re also in search of a logo/mascot to make Farm-e a recognizable brand. Here are some possible contenders:

From an article in the New York Times, we learn that  for more than a year, The World Bank has been releasing its prized data sets to the public. These efforts are currently giving the public access to more than 7,000 data sets that were previously available only to some 140,000 subscribers — mostly governments and researchers, who pay to gain access. The effort is spearheaded by Robert Zoellic, the Bank’s president and a career US diplomat.

Mr. Zoellick is driven by the belief that it is information and not the bank’s $170 billion lending portfolio that is its greatest asset. Mr. Zoellick is driving efforts to a new kind of openness in a ‘push to embrace competition’.

This is new territory for an institution long regarded as highly-secretive:

In short, the World Bank, long synonymous with Washington elitism, is taking steps to “democratize development economics,” to borrow a phrase from Mr. Zoellick, who is leading what many insiders regard as an assault on the bank’s power and prestige.

The desire to drive this reform comes from an understanding that open data sets allow for collaboration and innovation in new ways, especially as technology makes it easier to tap into and analyze The World Bank’s stores of information:

“We do not have a monopoly on the answers,” he said in a speech at Georgetown University last fall. “For too long, prescriptions have flowed one way.”

How an organization treats information is very much a part of its culture and in this case:

“The cultural norm of the bank is to hoard information, and when it does release information, it is either perfect or choreographed for delivery to a specific audience,” Mr. Shaman says.

This move toward openness at The World Bank is marked by innovative new programs such “Apps for Development”, a contest that seeks to engage software developers in creating web applications that tap into the power of the banks information: 

… young developers like Frank van Cappelle, a Dutch national who is a doctoral candidate at the Melbourne Graduate School of Education in Australia. His app, StatPlanet, lets people explore more than 3,000 World Bank economic indicators with interactive maps and graphics. It won the $15,000 first prize.

A welcome sign of change in culture at The World Bank with lessons for all organizations on how to tap the unrecognised potential of data.

July 4th fireworks at Ala Moana Beach Park

The bulk of content for this site was created while I was living on the island of O’ahu. Independence Day in the US is celebrated on July 4th weekend, my favorite time of year in Hawai’i as it brings together the possibilities of two things I love dearly: camping and fireworks. The July 4th fireworks on O’ahu has to be one of the most beautiful in the world. So, I’m coming back to contributing to this site after some time away, by taking a look at broadband issues affecting Hawai’i. On a personal note, it has been a very challenging period, marked by a more-than-ordinary amount of reflection on where I’ve been and where I’m headed. But, where ever my thoughts roam, this labor of love remains as important as ever in helping organize my thoughts and ideas. The next few weeks should see some interesting developments about how this site will continue to function as a catalyst for change in the Pacific Islands.

While Hawai’i enjoys infrastructure that other Pacific Islands can only dream of, it’s still plagued by the same challenges affecting all small-island nations, mainly how to get broadband to dispersed rural populations living on a number of islands. A solution may be close at hand. From TMC, we learn of Hawai’i's need for a satellite-based broadband service and how provider LightSquared will invest $14 billion to launch wireless broadband infrastructure by 2015:

LightSquared has developed the first, wholesale-only nationwide integrated 4G-LTE wireless broadband and satellite network that will offer consumers the speed, value and reliability of universal broadband connectivity. This virtually guarantees absolute coverage in unserved and underserved areas as well as redundancy for emergency use in the event of natural disasters.

Hawaii is one of the early states where LightSquared intends to roll out service.

Another feature that Hawai’i shares in common with Pacific islands is the existence of monopolies in the provision of telcom services. Oceanic Time Warner controls more than 94% of the cable TV market on Oahu. That’s about to change as embattled incumbent fixed-line operator Hawaiian Telecom is set to launch TV service utilizing its high-speed fiber-to-the-node infrastructure.

An analyst predicts they could capture as much as 20 percent to 30 percent of the Oahu market over time:

“The minute they start marketing and selling the service, they’ll be able to get 10 percent of the market right away,” Vitanza said. “In almost every case there is a certain percentage of consumers that are fed up with the incumbent.”

Having an option is good news for TV viewers on Oahu. For Hawaiian Telecom, the gradual roll-out of this new service provides a desperately needed path to profitability.

There are lessons here for all incumbent carriers and I hope Rohan Mail at Telecom Fiji  takes notice. 

Ikanos Communications, a leading provider of advanced broadband semiconductor and software products for the digital home, today introduced NodeScale™ Vectoring.

From their press release:

… deploying Ikanos’ state-of the-art NodeScale Vectoring technology, service providers will be able to extend very high-speed Internet access and new critical services – including multiple high-definition television streams, distance learning, video conferencing, telemedicine, and more – without having to incur the high costs of installing complete fiber-to-the-home networks.

“Ikanos’ NodeScale Vectoring technology will deliver the performance of fiber at one-tenth the cost of fiber-to-the-home,” said John Quigley, CEO and president at Ikanos.

Previous posts have delved into the state of e-commerce and upcoming 3G roll-outs across the country. These developments on their own are quite impressive. Even more impressive are the tie-ups that allow for the innovative delivery of services through this new platform.

One such example is the recent announcement of a joint venture between Aircel, a telecom, and the Apollo Hospitals, world renown for their delivery of low-cost healthcare. Through the ‘Aircel Apollo Mobile HealthCare’ service, users can get medical consultation over video phone for Rs 45 (approx US $1).

A crucial stumbling block to these possibilities remains the high-price for 3G smart-phones. To address this, Google is helping Indian handset manufacturers build smartphones that run Android for the sub-$100 market:

emerging [Indian] vendors represented more than one-third of total Indian phone shipments in the three months ending June 2010, up from less than 1% of shipments about two years earlier. Nokia dipped from 56.2% market share to 36.3% over roughly the same period.

In under two years, Indian phone manufacturers have made dramatic gains. Micromax offers 34 models of phones priced under USD 30, a price at which Indian users enjoy features such as cameras and basic data. Such developments highlight how how Indian phone makers have managed to take valuable market share from larger players like Nokia.

Another manufacturer, Spice Mobile already has released a $220 Android smart phone. When contacted for the Wall Street Journal article,  Motorola, Spice Mobile, HTC, and Samsung were unwilling to comment on their plans for low-cost Android devices. Undoubtedly, the sub-$100 smart phone is central to all manufacturers keeping their foothold in the Indian marketplace.

Source: Consumer Council of Fiji

These devices are also sold on pre-pay and post-pay terms. Depending on the selected option, consumers can also pay a deposit and the first month of service in advance.

These high up-front costs will keep this technology out of the hands of many in Fiji and is again indicative of our telecoms valuing short-term profit-taking over long-term development of the market.

Fiji is at the doorstep of e-commerce. The bank understands that this means changes in the way that we currently do business in Fiji and Westpac is ready to take this journey with our customers

But, if the technology entrepreneurs and consumers of Fiji have largely been left out of trends like e-commerce that have swept across more developed economies over the past 15 years, then they are not alone.

According to another article in the Economic Times, India has an estimated 35 million Small and Medium-scale Enterprises, out of which only about 200,000 have an online presence through domains, sub-domains and blogs.

These businesses are squarely in the sights of Google, which is keen to help all these enterprises set up shopfronts online. As they cater to this new market, they will make discoveries and innovations that will only lower the cost of doing business online–something that will benefit Pacific Islanders trying to set up an online presence for their ventures.