Growing demand for traffic in South Pacific, means that infrastructure needs have to be re-examined.  You can read from a sample of previous Coconut Wireless posts on the issue here:

The literature on Internet affordability and accessibility in the Pacific is pretty clear on the explosive growth in IP traffic the region is set to undergo.  But behind a statement like “demand for internet access will be 192% greater in the Solomons Island” is a more complicated picture of demand for internet services in the islands.

Consider the following chart of international voice calls from countries in the region:

table-3-outgoing-minutesThis graph is from a report titled “Satellite services in the Pacific” compiled by Network Strategies, a consulting firm (Download the PDF of the full report  here). It is a representation of the number of minutes used by people in the Pacific making international phone calls. Note the general upward trend, showing a growing demand for international service.

Since 2004, Fiji’s outgoing minutes have been in decline, something that can be attributed entirely to the proliferation of VOIP services like Skype.

What would this graph look like if projected out to 2009?  The general decline in minutes used over traditional land-lines would continue downward as more voice traffic in Pacific countries is diverted the Internet.

As more users become fluent with VOIP offerings, telecom operators  will face the same fate as those in other parts of the world:

Thanks to European broadband service providers treating voice as a loss leader to attract triple-play customers, local voice has become almost free in Europe, according to research conducted by Telegeography, a division of market research firm PriMetrica.

Source: GigaOM “In Europe, VOIP Grows and Grows

Triple play refers to the provisioning of telephone service, broadband, and television over one network by a single provider.  As landlines become less profitable for telecoms in Fiji, the providers will inevitably have to move toward providing voice services in the manner described above, as a loss leader for broadband internet and TV.  Yet another reason to make sure regulatory policies ensure a competitive environment.

If this makes no sense to you yet, don’t worry as it’s causing sleepless nights for our  existing telecoms. Right now, in high-rise offices all over capitals in the Pacific, people with Accounting degrees are examining spreadsheets very closely trying to figure what these shifts in traffic mean for future profitability.

Yet, no discussion of future possibilities for retail services and offerings can proceed without assessing the underlying need for cheaper backhaul facilities. The chart below is taken from a World Bank report (Download the PDF of the full report here):

Proposed Cable projects, with World Bank endorsements

Proposed Cable projects. click image to view in Hi-res. (Source: World Bank)

The chart shows three types of proposed networks: regional, sub-regional, and point-to-point.  Point-to-point refers to connecting two countries directly.  The World Bank does not have recommendations for many projects of these types, tending to throw its support for projects which solve the connectivity issue at the regional level.  The few instances where they support sub-regional projects are for the Solomon Islands, Tonga, and Samoa to connect to the infrastructure in Fiji (Southern Cross Cable Network).

By far, the most promising project is the regional New Caledonia to French Polynesia project.  Trying to connect the two French territories to each other would present opportunities for many other Pacific Island countries to jump onto a project which could bring significant additional bandwidth capability.  But, with an estimated price tag of USD $250 million, this project will be a long time in getting past the planning stages (a big reason to hope for the success of efforts like O3B Networks).

The same World Bank report shows how countries in the region could share in the costs of deploying the NCFP cable:

NCFP costs and benefits shared by countries in the region (Source: World Bank)

NCFP costs and benefits shared by countries in the region. Click image to view in Hi-Res (Source: World Bank)

Under this scenario, all participant countries could benefit and help help shoulder the costs of the project.  To become reality, significant policy and regulatory hurdles would have to be overcome to ensure all participant countries receive access to the cable.