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Pacific is in the grip of a telecommunications revolution
 
30 MAY 2008 BRISBANE (Pacnews) —– A study of Telecommunications needs in the Pacific Islands predicts that some countries will be demanding three times the international bandwidth they have access to at the moment, reports ABC TV
 
The study commissioned by Australia and carried out by a New Zealand company said the this demand would be driven mainly by increasing internet use.
 
The study said most Pacific Island countries would  have no alternative to satellite technology to meet their telecommunications needs for quite some time.
 
The consultancy company, Network Strategies Limited, said no other technology can span the vast distances involved to service what are generally sparsely distributed and relatively small populations.
 
The study makes a stab at how demand for bandwidth will grow. It predicts that by 2012, capacity demand in Solomon Islands will be 192 percent greater than now; the Cook Islands will want 150 percent more capacity; Papua New Guinea ( PNG) 90 percent  and Samoa and Vanuatu both 77 percent 
 
The study said  the two critical issues facing the region are affordability and accessibility. It said  the high costs of connecting to satellites are a major barrier to the efforts of small island countries to improve education and expand their economies.
 
It suggests that while access to submarine cable networks would  provide some relief for Fiji and Papua New Guinea, the majority of Pacific Island countries remain absolutely dependent on expensive satellites.
 
The study recommends that costs could be brought down by greater regional cooperation with island nations ceding autonomy over telecommunications to a cooperative venture.
 
It said  the benefits could be very high and the Pacific should examine how island countries in the Eastern Caribbean have set up a regional Telecommunications Authority to combine their markets and simplify regulations……PNS (ENDS)

What are the benefits of deregulation and increased competition?  From a New York Times article, here is what it has meant for Europe:

Half of the European Union countries could match the United States in broadband use by 2010, Ms. Reding said, if regulators take a tough stance to pry markets open. European Union broadband rates vary from 35.6 percent in Denmark to 7.6 percent in Bulgaria. The United States level was 22.1 percent as of July 2007, according to the Organization for Economic Cooperation and Development.

Ms. Reding emphasized her determination to encourage greater competition in the market and to give regulators the power to force “functional separation” — obliging the owners of telecommunications networks to free the networks from their operating divisions.

In seven member states, more than 60 percent of the broadband market is in the hands of incumbents, she said.

Ms. Reding adds, “The dynamic market force is new entrants”. 

Improving rates of broadband usage indicate many things, but as the article shows, it is increasingly a mark of how well-suited a country is as an investment destination.  Definitely something for policy makers to take note of in Fiji.  Higher levels of broadband internet usage are signs of an educated population with a sophisticated understanding of technology–very important to drawing overseas investment capital in today’s global economy.

The second article is also from the New York Times and deals with the setbacks cities in the US have faced in trying to set up free and/or subsidized municpal wifi networks.  The failure to get these networks up is an indicator of how it is important to have a clear business plan mapped out before deploying such networks.  Yet again, it is a call for business leaders and policy makers to sit down and really think about what deregulation and broadening access to technology means for Fiji.  It is also important to note that these efforts precluded use of WiMAX technology–something that gives Fiji a considerable advantage.

Currently, FINTEL is acting very much in the manner of the European monopolies.  Widening access to the internet, especially how it has been described on this blog means that policymakers will to pull themselves together and challenge the way things are being done.

What these articles have in common is growing acceptance of the idea that high levels of internet usage are good for a society.  Improved education levels, quality of life gains, increased suitability as an investment destination, and improved emergency communications are just some of the benefits of wider broadband internet usage by a population.

Digicel Press ReleaseDigicel Press ReleaseDigicel’s Press ReleaseDigicel Press ReleaseFor decades, Fiji was deemed too far and too small to be a viable telecommunications market.  All that changed last week with the announcement of Digicel’s entry into the mobile market in Fiji.  For a country that suffered through a bloody colonization process and instability in the short years of independence, this signals momentous change.  The high prices and poor service that have historically shackled communications in Fiji will hopefully become a thing of the past.   If we can use Digicel’s track record in other countries as an indicator, they just might be.

Fiji takes a tremendous leap toward competition and economic liberalization with the granting of a operator’s license to Digicel, a Caribbean-based operator with presence in 20+ countries with similar profile to Fiji.

Contrary to prior reports, the government auction process did not hand out two licenses for mobile operators. Digicel pays the government US$10.25 million for the right to be the only mobile operator to go up against Vodafone.

Fijilive says that Digicel has already put in place pieces of an estimated FJ$120 million cellular communications network. According to their own press release, the company also intends to make Fiji the headquarters of its regional operations, eventually employing as many as 250 full-time and an equal number of part-time employees.  You can find the press release attached to this post (Thanks to D).

With much of its infrastructure already in place, the company plans to roll out services in 2009.  Consumers can expect prices to drop sharply and competition for services to increase as Digicel puts on the pressure to become the operator of choice for all of Fiji.  Enough cannot be said about Digicel’s track record in other countries in the South Pacific.

The high cost of cell phone usage under the Vodafone monopoly will soon be a part of Fiji’s past. Vodafone and ATH’s large profits have come at the expense of high prices, zero competition, and stifled economic growth.  For modern economies, communication is by far the most important business tool. With lowered costs for communication in Fiji, the hope is that technology will become accessible to those who may have not been able to afford it before.  Costs to businesses should decrease, increasing overall productivity.

The liberalization in the telecommunications sector bring a wide range of benefit.  Where Vodafone was slow to release anything but the most basic services and features, competition from Digicel will bring to users in Fiji services that they have not seen thus far.  Expect new services in mobile internet, video streaming, and other high-end data services as Vodafone can no longer take your recharge card dollars for granted.

It was not long ago that few strands of cable were what connected Fiji to the outside world.  Satellite communications and fiber-optic cables have brought Fiji a long way since those early days (which were not too long ago).  

There are some serious questions that remain about this move toward economic liberalization and competition. 

How much of the US$10.25 million will go toward the establisment of universal accesss schemes for mobile and internet?  If you have read earlier posts on this site, then you know that universal access is something that is very important to the authors of this site.  We urge Mr. Ricketts to come forward and outline how service will be expanded to rural areas.  Widening access to technology should be a key benchmark by which this current round of liberalization should be measured. 

Additionally, what are the details and specifics of the Telecommunications Authority of Fiji, the new regulatory body being set up to oversee the industry?  More to come, so the only thing we can all do is stay tuned as the developments come in.

It’s important to understand that WiMAX is a new technology being deployed in countries all over the world. Governments across the globe increasingly operate with the understanding that deploying wireless networks are a part of expanding national infrastructure. Buiding a WiMAX network is the 21st century equivalent of building the roads, railways, and ports of yesteryear. Additionally, there is the added expectation of populations of access to the internet being a fundamental human right.

Each country that deploys a WiMAX network faces different hurdles and obstacles. It is important to remember that a country like Russia building a network spanning 11 time zones and a small country like Fiji are at relatively the same point in their experience rolling out such networks.

It is not just a matter of geography and terrain, there are also other issues of dedicating specific ranges in the broadcast spectrum and working out arrangements with existing providers, especially to coordinate building of new infrastructure.

For instance, a July 2007 article from Malaysia describes how the Government has had to step in with incentives to encourage service providers to act collectively in laying out the infrastructure for new wireless networks:

According to the news agency Bernama, if the companies decide to share their infrastructure, the minister also offered financial assistance from the ministry’s universal service fund. The minister added that “If the companies decide to go on their own, they will have to roll out the cost of the towers themselves.” The impetus for suggesting a shared infrastructure comes from the ministry’s dissatisfaction over the roll-out of 3G services in Malaysia. The minister said that after two years, not all of the 3G towers that were planned for construction had been completed.

The dissatisfaction with the slow speed of construction of towers forced the relevant ministry in Malaysia to jump into action.

In Russia, service provider Synterra has had to devise unique solutions to help deploy a national WiMAX infrastructure over such a large geographic area.

Their aim is to utilize partnerships with local service providers in towns with populations larger than 100,000. They are deploying over 1,000 such networks at an estimated cost of US $29,000 each.

These examples are intended to show how deploying a WiMAX network in Fiji will require understanding and cooperation between the relevant stakeholders. It will require a unique public-private partnership, where Government will have to step in with incentives to ensure the rapid deployment of a network that has wide coverage.

To make this a reality for Fiji, both policymakers to service providers will have to think seriously about the importance of universal internet access to the future of Fiji.

The day that we thought would never arrive for telecommunications in Fiji, is upon us.

The peope of Fiji should expect nothing less than dramatic changes. 

In a conversation with Fijilive, new Communications Minister Tom Ricketts has confirmed the finalization of the telecommunications deregulations agreement today.

From the Fijilive article:

Last week, lawyers for the telecom operators (Telecom Fiji, FINTEL, Vodafone) and government met at the Holiday Inn in Suva over three days to finalise documentations in preparation for the eventual signing of the Settlement Deed.
The Settlement Deed was negotiated at the Radisson Hotel at Denarau early November.

There is virtually no coverage of this issue in the Fishy Times and other dailies—disappointing considering the huge change this means for the country. However, Islands Business appears to have done the required research and went to the lengths of viewing the agreement documents. In light of the inability of the dailies to keep us informed, we really have to thank the Islands Business crew for doing their job.

This is a breakdown from the Islands Business article on what Vodafone, TFL, and FINTEL get for agreeing to the deregulation process:

Vodafone Fiji Ltd (51% TFL/49% Vodafone International Holdings BV):

It gets a 15-year “open” facilities based telecom license and continued spectrum access, both with no additional charges apart from current levies. Vodafone currently uses 15MHz of the 900 MHz spectrum and this arrangement expires on December 31 next year. Beginning January 1, 2010, Vodafone is allotted 13MHz of the 900MHz spectrum (paired) for the duration of its 15-year open license.

This spectrum is used to broadcast signal for mobile telephone operators using GSM 900 mobile standard.
It also gets 15MHz of the 3G/UMTS (paired) during its 15-year license. This frequency is used for new applications in mobile telephones technology, more commonly referred to as 3Gs.Vodafone has also been assured of continued access to microwave spectrum, which will also be available on a non-exclusive basis.

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.