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Broadband in Fiji: A Micromarket Case Study

Pacific Telecommunications Council Broadband Reports, Number 1

Elizabeth Fife, Ph.D., Editor

General Inquiries Pacific Telecommunications Council 914 Coolidge Street, Honolulu, HI 96826-3085 +1.808.941.3789 [email protected] ptc.org

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Recommended Citation American Psychological Association (APA) Style, 6th Edition: Fife, E. (Ed.) (2013). Broadband in Fiji: A Micromarket Case Study (Pacific Telecommunications

Council Broadband Reports, No. 1). Honolulu, HI: Pacific Telecommunications Council. Chicago Style, 16th Edition: Fife, Elizabeth, ed. 2013. Broadband in Fiji: A Micromarket Case Study. Pacific Telecommunications

Council Broadband Reports, No. 1. Honolulu, HI: Pacific Telecommunications Council.

Broadband in Fiji: A Micromarket Case Study Pacific Telecommunications Council Broadband Reports, Number 1

© 2013 Pacific Telecommunications Council

Broadband in Fiji: A Micromarket Case Study | PTC Broadband Reports, Number 1

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About the Report

Source: Fiji Ministry of Information

This study is a collaboration of the PTC Research Community and PTC participants from

industry, international organizations, and government. A goal of this effort was

engagement of the expertise within and connected to PTC to initiate a knowledge

network that would reflect a unique PTC perspective. In tackling the issues around Fiji’s

broadband development we sought to join current descriptive information with analysis

that incorporates academic rigor, practitioner’s experience and industry relevance. This

approach can be further developed going forward. In this effort we have tried to bring

forward some of the realities of Fiji’s telecom environment to help differentiate this study

and consequently have focused on the views and experiences of individuals currently

involved with Fiji’s National Broadband Plan.

A wiki discussion group has been a concurrent effort, allowing engagement between the

far-flung scholars and professionals involved in this initial effort to generate joint research

that reflects the knowledge base and interests of PTC.

In addition, this project expanded the reach of PTC to new sources of knowledge and

influence in the telecom environment of the Asia Pacific. Extension of linkages is reflected

in the numerous interviews and other input received from senior executives, highly placed

government and regulatory officials, and advisors, many of whom were somewhat familiar

with PTC, others who now are aware of PTC as a resource.


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Acknowledgements

PTC Industry and Research Community Contributors

Elizabeth Fife Editor [CTM, Marshall School of Business, University of Southern California]

Milad Mohammadi Principal Contributor [Virginia Tech]

Daniel Smith Contributor [Lecturer, University of Hawaii, Hawaiian Airlines, Principal Engineer, Avionics]

Side Bar Contributors

Laura Hosman [Associate Professor Illinois Institute of Technology]

Shinya Murakami [Project Coordinator, Japan International Cooperation Agency]

Kas Kalba [President Kalba International Inc.]

Juan Orjuela [University of Southern California]

Francis Pereira [Adjunct Professor, Marshall School of Business, University of Southern

California]

Bibhya N. Sharma [Professor, University of the South Pacific]

PTC Contributors

Ewan Sutherland [Research Fellow, LINK University of Witwatersrand]

Bruce Baikie [CEO, Green Wifi]

Mothilal de Silva [CEO, Telco Vision Pvt Ltd]

Yoshiharu Fujita [Ministry of Internal Affairs and Communications, ICCP]

Tomas Lamanauskas [ICT Policy Advisor, Office of the Government CIO, Prime Minister’s

Office, Government of the Republic of Vanuatu]

John Hibbard [CEO, Hibbard Consulting]

Jim Holmes [Director, Incyte Consulting]


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PTC Contributors (continued)

Robert Horton [ITU Consultant]

Christina Higa [Director, Telecom and Information Policy Group, University of Hawaii]

Nir Kshetri [Associate Professor, University of North Carolina-Greensboro]

Bob Lyon [Chairman, Fiji Development Bank]

Xinru Ma [University of Southern California]

Pacific Islands Telecommunications Association [PITA]

David Sawcer [Assistant Professor, University of Southern California]

Chaminda Senewiratne [Head of Data and Broadband Services, Vodafone Fiji]

Rashid Shafi [Sr. Exec. VP & Chief Strategy Officer, Multinet Pakistan Private Ltd.]

Minoru Sugaya [Professor, Media Policy and Economics, Keio University]

Yoshihisa Takada [Associate Professor, Institute for Media Communications Research, Keio

University]

Ian Thomson [ICT Outreach, Economic Development Division, SPC]

Chris Vonwiller [Board Member Appen Butler Hill, former President & Chairman PTC]

Kawasumi Yasuhiko [ITU-D rapporteur for rural communications development, Advisor to the

ITU Association of Japan]

PTC Broadband Report Advisory Committee

Stephan Beckert VP Strategy, TeleGeography (PTC Board of Governors)

Shishir Belbase Head, Communication & Networks, Office of Information Systems &

Technology, Asian Development Bank (Vice-Chair, PTC Special Interest

Group on Development)

Russ Kaurloto Deputy CIO, University of Southern California (PTC Board of Governors)

Rashid Shafi Sr. Executive VP & Chief Strategy Officer, Multinet Pakistan Private Ltd.

Richard Taylor Professor, The Pennsylvania State University (Chair, PTC Board of

Governors)


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Foreword

Information and knowledge have served as the

cornerstone of survival, innovation,

development, economic opportunity, and

power throughout the history of human kind.

Those with access have always had a

competitive advantage over others for

education, health, and economic growth and

those without access have lagged behind. As

we move from the agricultural to industrial to

the information era, access to information

becomes more prevalent, a basic right and

means to poverty reduction. With the rapid

technological developments of recent decades,

the means of accessing information and its

sheer volume have not only spread faster and

more broadly, but also have grown larger and

more complex. And those without access will

continue to fall behind the curve – creating an

even wider digital divide which ultimately

contributes to economic inequality and

poverty.

Access to information and the Internet has

already become a utility in most developed

countries and there is no other easier means to

make it available to the public in developing

nations than through broadband networks.

Such networks have become the foundational

infrastructure for providing access to

information and linking citizens with the world

of knowledge in education, health, safety,

agriculture, and the environment.

Broadband networks have for example

empowered citizens to act as individual

cartographers – as people become a powerful

source for information collection, they push

demand for better services from the

government, fight corruption, and motivate the

use of alternate resources – global and local -

for survival and new opportunities.

Island nations and its peoples have a greater

disadvantage when it comes to poverty

reduction and access to information due to the

isolated and dispersed nature of their

geographical location. On the other hand, the

Pacific islands are also blessed with pockets of

lands and population where the deployment of

any infrastructure, including broadband

becomes more convenient. Broadband

networks can play a larger role in such

countries by leap-frogging development,

making information access ubiquitous and a

human right, shrinking the inequality gap,

reducing poverty, and creating a safer

environment for its citizens.

Given our understanding of how broadband

can improve the daily lives of individuals in

micro-territories of the South Pacific Islands,

further study of how access can feasibly be

introduced is timely and relevant. Building a

knowledge base of understanding through

individual cases, aligned with the local culture

and policies, will enhance our overall

understanding of how to best serve the needs

of small island markets towards bridging the

knowledge divide and cultivating an

environment for equal opportunity for all.

Shishir Belbase, Co-Chair, Special Interest Group on Development, PTC


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Executive Summary

As Fiji moves forward with its National

Broadband plan, released in October 2011

various implementation paths are being

considered to support supply and demand

elements. The specifics of Fiji, including its

geography and demographics frame the

technology and market scenarios. However,

the bottom line of how this country can

assemble the will and resources to best

deliver the benefits of broadband to a

population is a globally relevant discussion.

This first edition of the PTC Annual Report

on Broadband addresses the specifics and

broader issues surrounding these dynamics.

The factors that matter in terms of how

broadband will be implemented and

introduced in a way that allows usage to

grow are well known: a conducive

environment consists of coordinated policy,

appropriate technology that is matched to

the context of a market, “readiness” broadly

defined, in government, the population, and

business and lastly--money. By examining

Fiji’s broadband endowments along with

some of the bottlenecks, we highlight how

Fiji can build on existing activities to enhance

its “enabling environment” and identify

emergent economic activities that can

improve the wellbeing of its society and

increase broadband investment.

Another contribution of this study is

demonstration of how a range of decision-

making methodologies and regression

models can be used to choose appropriate

technologies and develop investment

strategies for Fiji and in any similar market

through customization to individual

characteristics.

Needs-Driven Broadband

In approaching Fiji’s broadband development

from a sustainability standpoint we have

sought to identify how market forces can

support demand and usage. The unique

characteristics of Fiji at first glance imply that

lessons here are not easily transferable to

other markets and vice-versa. While the

specifics will differ- even among the Pacific

Islands, great variety is apparent; from the

French entities of New Caledonia and French

Polynesia, to the US entities that include

American Samoa, Palau, Micronesia, as well

as the independents, Papua New Guinea

(PNG), W. Samoa, Vanuatu, and the Solomon

Islands – their history, governments,

topography, population and economies all

are influencing factors for broadband

offerings that meet demand and evolve as

adoption increases. The differences between

these micromarkets are also prominent in

discussions of supranational organization

and infrastructure sharing (e.g. leasing

capacity for satellite services).


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Fiji is a useful case for tackling the question

of whether every citizen in a nation can

affordably be provided with broadband. As

with other markets, there are more and less

attractive customers – the most attractive

from a business standpoint in Fiji include

those living on the two major islands (87%) of

the population, and the yearly influx of

tourists who number the equivalent of

roughly two-thirds the population. The

remaining 13% of the population is located

on remote islands that are expensive and

difficult to cover. There are also areas on the

large islands that do not have service at the

present time. While the government has

enthusiasm to improve ICT availability at

affordable prices, and it has been remarked

that communications will be a key driver of

the country’s wealth, how this desire can be

actualized is the burning question that will be

analyzed through the following principal

questions:

1. What is the regional “why?” for further

deployment of broadband in Fiji?

2. How can demand and the market

environment best be cultivated?

3. Who will pay for and maintain the

infrastructure? How will commercial

viability be achieved?

4. To what extent can models from other

markets provide insight?

5. What lessons from Fiji are relevant to

other markets?

Why Fiji?

At first glance, it seems difficult to make the

business case for this remote archipelago of

less than one million customers, with a GDP

per capita of around $4K. On closer

examination however, Fiji like has broadband

attributes--markets, customers and services

that can be developed.

The second largest island nation in the

Pacific, Fiji is centrally located to be an

attractive transport and trade hub and thus a

potential communications hub for the Pacific

Islands as well. Another attribute: the

Southern Cross submarine cable already has

a terminus in Fiji that provides backhaul to

support service growth.

Fiji has been called “the quiet achiever” in the

sense that it has numerous positive

broadband attributes such as its location,

that are not immediately apparent, but have

caught the attention of international carriers

like Vodafone and Digicel, the governments

of Japan and China, and international

organizations like the World Bank and ITU.

The Pacific Telecommunications Council

(PTC) has selected Fiji as the first target for

its yearly report because this market is less

studied and yet has intrinsic interest, and

also because it holds lessons for general

understanding of broadband markets in

developing markets.


The objectives of this report are to analyze

the Fiji case for broadband to identify not

only the “solution scenarios” for this one

micromarket, but to gain insight about the


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key features that will push broadband

forward in other non-obvious emerging

markets with different dynamics and

resources. Given that there are around 84

other countries that are smaller than Fiji,

there are implications from this investigation

that are applicable in many other contexts.

In order to identify the pathway for

broadband expansion in Fiji, groundwork

should be considered across several

dimensions including the society, institutions,

economy and technology choices. Basic

recommendations that are supported in the

discussion to follow include:

Societal Drivers

- Involve communities to build demand

and ensure that services and needs are

aligned (development of participatory

practices and approaches)

- ICT training at all levels of society to

support usage, innovation and buy-in

Institutional Drivers

- Strengthen independent telecom/ICT

regulators so stakeholders can be

organized and plans implemented

- Develop consultation processes with

transparency at all stages and levels

- Develop mechanisms to effectively

make use of skills and resources offered

by external organizations

Economic Drivers

- Make measurement and assessment a

priority to support accuracy and greater

certainty in planning and policy

development

- Major lead applications: sectors likely to

facilitate growth of broadband: e.g.

tourism/telecom, government,

education, health

Technology Drivers

- Pursue an evolutionary introduction of

technology and multiple broadband

technologies – build in synch with

evidence of growth in usage while

managing fragmentation that can result

from fragile demand across multiple

technologies

The drive for more comprehensive use of a

broadband network also requires increased

resources: institutional capacity to

comprehensively implement policies,

development of programs to promote

community-based training and education,

general ICT and basic computer training on a

national scale, and development of

consultation processes to further tailor the

BB Plan to Fiji’s context. In addition to

resources to guide comprehensive use, a

business-driven use-case could jump start

further investment in broadband and support

a spinoff dynamic to the far reaches of this

dispersed archipelago and its less obvious

users.


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Contents

About the Report ...................................................................................................................................................... iii!Acknowledgements ................................................................................................................................................. iv!

PTC Industry and Research Community Contributors ....................................................................... iv!Side Bar Contributors ....................................................................................................................................... iv!PTC Contributors ................................................................................................................................................ iv!PTC Broadband Report Advisory Committee .......................................................................................... v!

Foreword ..................................................................................................................................................................... vi!Executive Summary ................................................................................................................................................ vii!

Needs-Driven Broadband ............................................................................................................................... vii!Why Fiji? ............................................................................................................................................................... viii!

Societal Drivers ............................................................................................................................................. ix!Institutional Drivers .................................................................................................................................... ix!Economic Drivers .......................................................................................................................................... ix!Technology Drivers ...................................................................................................................................... ix!

Part 1. Introduction .................................................................................................................................................. 1!A.!National Context: Broadband Challenges ........................................................................................... 1!B.! Current Status of the BB Plan ................................................................................................................... 3!C.! Snapshot of Current Broadband Use ..................................................................................................... 4!

Advantages/Differentiators ...................................................................................................................... 6!Current BB “Endowments” ........................................................................................................................ 7!

D.!Challenges to Creating an Enabling Environment ............................................................................ 7!Fixed Constraints ........................................................................................................................................... 7!Addressable Challenges .............................................................................................................................. 8!Telecentres ....................................................................................................................................................... 8!

E.! Central Issues for Fiji’s Future Broadband Development .......................................................... 10!Part 2. Fiji’s National Broadband Plan ............................................................................................................. 11!

A.!Principles of Fiji’s BB Plan ....................................................................................................................... 12!B.! Challenges: Institutional Capacity ....................................................................................................... 13!C.!Challenge: The Need for Indicators ..................................................................................................... 14!

Part 3. Overview of Fiji’s Telecom Sector and Broadband ....................................................................... 16!A.! Fiji’s Challenges to Creating an Enabling Environment ............................................................... 16!


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B.! The State of Competition and the Major Players ........................................................................... 18!FINTEL ............................................................................................................................................................. 19!Fiji’s Backhaul ............................................................................................................................................... 20!Broadband Pricing ...................................................................................................................................... 20!Mobile Operators ....................................................................................................................................... 21!

C.!Regulatory Dynamics ................................................................................................................................ 22!D.! International Agencies: Making the Best Use of Outside “Help” ............................................ 26!E.! Organizing Stakeholders ......................................................................................................................... 26!

Part 4. The Business Case for Fiji: Cultivating Demand and Building Capacity with

Usage ............................................................................................................................................................ 28!A.!What Do Customers Want? .................................................................................................................... 29!

Role of Users and Communities in the Broadband Plan .............................................................. 29!B.! Services to Drive Business Model Development ........................................................................... 30!

Fiji as a “Hub” for the Region .................................................................................................................. 30!Public Services: Government, Health, Education (Connecting schools and

distance learning) ........................................................................................................................................ 30!Education ....................................................................................................................................................... 32!Telehealth ...................................................................................................................................................... 37!Tourism ........................................................................................................................................................... 38!Community Involvement ......................................................................................................................... 40!Enterprise Services – Corporate Conferencing, Call Center, Data Hubs ............................ 40!

Part 5. Demand Scenarios ................................................................................................................................... 41!A.!Demand Scenarios – A Quantitative Assessment ......................................................................... 41!

Demand Forecast ........................................................................................................................................ 42!B.! Technology Choices ................................................................................................................................... 44!

Implications for Fiji ..................................................................................................................................... 48!WiMAX ............................................................................................................................................................ 49!ADSL ................................................................................................................................................................ 49!Microwave ..................................................................................................................................................... 49!Satellite and Broadband over Power Line (BPL) ............................................................................ 49!Recommendations for Fiji ....................................................................................................................... 50!Microwave Cost Estimate ....................................................................................................................... 50!


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C.!Decision Tree Analysis of Investment and Demand ..................................................................... 54!Small Island Broadband Investment Decision Tree ...................................................................... 54!

Part 6. Who Will Pay for the Infrastructure? ................................................................................................ 59!A.! Infrastructure Sharing .............................................................................................................................. 59!B.!Who Will Pay for Networks? .................................................................................................................. 60!C.!Broadband Models ..................................................................................................................................... 60!

Public Private Partnerships .................................................................................................................... 60!Budget Telecom Model (BTM) ............................................................................................................... 62!Evolutionary Route to Broadband ....................................................................................................... 62!Holistic Approach - Broadband as an Element of Comprehensive National

Strategies (Korea, Singapore) ................................................................................................................ 63!Regional Cooperation ............................................................................................................................... 64!

Part 7. Broadband Attributes in Emerging Markets ................................................................................... 65!Part 8. Conclusions ................................................................................................................................................ 69!

A.!Business Models for Micro-Broadband Markets: Build from the “Local Why?” Relevance ....................................................................................................................................................... 69!

B.!How Can Demand Be Supported? ........................................................................................................ 70!C.!Who Will Pay for the Network? ............................................................................................................ 70!D.!What Are the Lessons from Fiji? ........................................................................................................... 70!

Societal ............................................................................................................................................................ 70!Institutional ................................................................................................................................................... 71!Economic ........................................................................................................................................................ 71!Technology .................................................................................................................................................... 71!

PTC Broadband Reports, Number 2 .......................................................................................................... 71!Part 9. References .................................................................................................................................................. 72!Part 10. Appendices .............................................................................................................................................. 77!

Appendix 1. PTC Expert Survey Results .................................................................................................. 77!Appendix 2. Decision Tree and Broadband in a Broader Context ................................................. 81!Appendix 3. Broadband Plan – Institutional Arrangements, Process and Targets ................ 87!Appendix 4. Telecom Service Providers .................................................................................................. 88!Appendix 6. Interview List ............................................................................................................................. 93!

About PTC ................................................................................................................................................................. 94!


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Part 1. Introduction

A. National Context: Broadband Challenges

The United Nations Economic and Social

Commission for Asia and the Pacific report

on issues for connectivity in the Pacific

region (2008) predicted that by 2015, 60% of

Fiji’s households would have access to the

Internet, up from 5% in 2005. Currently,

there are merely 43,000 dial-up and

broadband subscribers combined

(TeleGeography est. Sept 30, 2011), and

demand has in fact dropped slightly in the

last 2 years.1

Why has neither demand nor supply for

broadband grown in the Fiji market? While it

is easy to point to challenges presented by

the small island developing state (SID) with a

1 TeleGeography data has been used for up to date

information on market size info, traffic flows, other

current conditions related to broadband availability

and usage in this report. In addition, World Bank, Fiji

Bureau of Statistics and FINTEL data is also used.

population under one million, low GDP, and

other seemingly non-advantageous

circumstances, broadband has been able to

achieve fairly high penetration levels in a

number of other emerging markets with far

fewer broadband endowments than Fiji

suggesting that further expansion of existing

broadband should be attainable. Fiji enjoys

the presence of world class carriers, outside

advisors and funds, and a submarine cable.

Key challenges include infrastructure costs

(backhaul) and affordability of the services.

Demand for broadband is not sufficient for

economies of scale and therefore, cost per

user is high. This is a challenge in a

developing country like Fiji, where GDP per

capita is USD $4,390. Thus, willingness to

pay for broadband by most users is lower

than the actual cost of providing services.



The UN estimates willingness to pay in the

Pacific islands, using two methods. The first

is simply a measure of average revenue per

user from the various

carriers in 2008 that

results in an estimate of

USD $8.74. The second

method uses a GDP

estimate of the value of

the services provided

by telecommunications

with an estimate that

results in USD $4.86

(UN, 2011). When we

compare these numbers with the current

cost of the cheapest plan in Fiji of USD

$16.64 from Unwired Fiji, this is almost

double the average revenue per users’

estimate of the willingness to pay and four

times the estimate using GDP. In other

words, at current prices, it seems that the

willingness to pay is below the current price

of the services. Note:

this method is based on

averages and do not

include the range of

possibilities that

innovative business

models could provide

lower prices or higher

willingness or ability to

pay.

As a rough estimate, according to the PTC

experts we surveyed, the majority estimated

that Fijians would be willing to pay FJ $10-

$20 per month for broadband connection, as

shown below in Figure 1.2

Figure 1. PTC Expert estimate of willingness to pay for broadband in Fiji (per month)2

2 Individuals from the PTC constituency along with other Fiji-based experts with acknowledged experience in Fiji telecoms were invited to share their perspectives in providing responses to open-ended questions and a short structured survey. Appendix 1 shows the full results of this modified “Delphi” study

When we compare these numbers

with the current cost of the

cheapest plan in Fiji of USD $16.64 from Unwired Fiji, this is almost

double the average revenue per

users’ estimate of the willingness to

pay and four times the estimate from GDP.



Nonetheless, the well-known willingness to

pay issue on the consumer side is balanced

by the need for broadband as an enabler for

socio-economic development: raising rural

incomes, increasing job creation, enhancing

productivity and competitiveness, and the

overall promotion of economic and social

development (Eun-Ju Kim, 2012). This is

where Fiji’s National Broadband Plan (BB

Plan) and the country’s vision for the future

enters the picture. The BB Plan as a

document is a useful resource for the

country which can be held up as an important

development milestone – the next stage is

customization to the Fijian context.

Although Fiji already does have broadband—

and as observers note, has a reasonably good

story to tell with the Southern Cross

Submarine cable backhaul and existing

infrastructure that essentially covers the two

main islands, broadband penetration has not

yet reached the general population and thus,

generating and executing the needed

resources is the next thorny step. It is

generally agreed that governments play a

critical role in supporting a business

environment that will allow broadband

deployment and adoption to grow – a

conducive environment to private sector

investment along with implementation of

public sector demand-driven programs like

e-government and digital literacy initiatives,

the broadband environment will be

stimulated through investment and adoption

(ITU, 2012).

This is the current ideal, and Fiji’s BB Plan

aligns with this idea and serves as the

starting point for discussion of where to go

from this point. Our analysis suggests a

targeted approach that focuses on a few

promising economic sectors could be a useful

path towards Fiji’s own specific version of a

“Small Island Information Society” in addition

to pursuing supportive activities already

underway – development of appropriate

regulatory instruments, engaging private

enterprise, developing pubic services like e-

government, and encouraging demand

through telecentres.

Our analysis suggests a targeted

approach that focuses on a few

promising economic sectors could

be a useful path towards Fiji’s own

specific version of a “Small Island

Information Society” in addition to

pursuing supportive activities

already underway – development of

appropriate regulatory instruments,

engaging private enterprise,

developing pubic services like e-

government, and encouraging

demand through telecentres.

B. Current Status of the BB Plan

Implementation of the BB Plan at the

moment can be said to be somewhat lagging.

The Prime Minister announced the BB Plan

in November 2011 and the ICT Policy and

Plan was delivered to the Ministry on May

31, 2012. Current delay is attributed to

issues internal to the government.

An industry observer had these paraphrased,

frank remarks:

Where things stand with plan? Even before

plan, broadband was available, Vodafone –

3G, and fixed operator offered DSL, and



Digicel–offering WiMAX – so pretty much

there already – but not everywhere of

course – just where operators think its

commercially viable. The plan provides a

definition of broadband as 256K - and set

some targets. As far as an enabling

environment which was supposed to have

been provided – we’re not seeing it –

incentive or help from the government – we

don’t see. Encouragement is not there. It

will take some time for targets to be

reached. So far government services online

are pretty basic, school connectivity,

telecentres, medical centers are not yet

where they need to be. We tell the

government we are not impressed that the

Telecom Authority Fiji (TAF) doesn’t have a

website… and in the Fiji Ministry, only two

people are in fact doing telecom.

The challenge of governance resulting from a

small population, and thus small pool of

individuals who can fill offices is a significant

constraint on the speed with which a national

regulatory body can address issues.

Additionally, this lack of scale is reflected by

lack of data—market analyses and essential

surveys on ICT spending and use by citizens,

households and businesses (Sutherland,

2010).

A small staff contrasts with a large goal: to

achieve broadband service availability to

95% to all urban, suburban and rural

communities by 2016 – 95% of the people of

Fiji are intended to have the ability to access

broadband services with a download

capacity of 2 Mbps or more.”

“The emphasis will be on communities of 250

or more people who would not otherwise be

served by private sector organizations in the

foreseeable future.” There are many such

communities, including many larger than 250

that do not have access although broadband

is currently commercially available in many

urban areas for ~$35/mo. (interview, Fiji

government official).

The BB Plan was announced in 2011, further

discussion and consultation occurred

recently in July 2012 at an ITU/CTO

Broadband Forum in Nadi. Fiji’s Attorney

General and Minister for Communications

remarked that broadband could serve

farmers, business people and had potential

for government services such as

telemedicine. He also reported that

spectrum issues needed to be corrected.

Additionally, a common regulatory regime

was proposed, “For small countries

distributed among such a vast area, a

common regulatory regime and a shared

commitment to security, accessibility and

quality can give us greater control over our

destiny” (Sayed-Khaiyum, Opening remarks,

2012).

C. Snapshot of Current Broadband Use

The Internet market in Fiji is small, only

14.4% of households have connections

(24,300 households). Most connections are

not broadband, with DSL representing a

small percentage of total users. Growth has

decreased in the last 2 years from an average

of 35.7% annual growth from 2007 to 2009

to 4.5% in 2011. The rapid growth that

began in 2007 was the product of

deregulation, but subsequently things have

stalled.




On the mobile side, while ARPU's are low,

usage trends show positive signs. There are

challenges based on international transit

costs of bandwidth, cost per MB and

backhaul transmission costs – regardless of

whether fibre or microwave is the access

technology. Demand is mostly urban-based

(75%) with younger people and those in the

work force making up the predominant base

of users (interview, Vodafone executive).

Businesses are the visible smartphone users,

and younger demographics are seen as the

key to pushing the mobile market. Showing

foresight, the government reduced duties on

smartphones substantially near the end of

2011 which has encouraged adoption.

Although household penetration of

broadband in Fiji is low (14.4%), by other

measures, particularly accounting for mobile

access, broadband access (256 kbps or

higher) as noted in the BB Plan is fairly high:

fixed broadband subscriptions are 2.77/100

population and mobile broadband is

subscribed to by 16.12/100 (135,000) as of

June 2011. This is slightly above the world

average in 2011 of 15.7 (ITU-D, 2012a). The

ITU estimated that 28% of Fijians used the

Internet in 2011 (ITU-D, 2012b) which puts

the country in 124th place of the 199

countries reported.

As in many countries, the number of mobile

phone subscriptions (814,806 total, Sept.

2012) (TeleGeography, 2012) far exceeds

the number of fixed lines (129,845 total,

15.5/100) (TAF, 2011). As many observers

noted in our investigation, this suggests that

much future broadband access will be

mobile. Most users (over 60%) in Fiji have

prepaid plans in line with most small island

states. In fact, Vodafone’s offering of prepaid

cards was the takeoff point for mobile

telephony in Fiji—by making it more

affordable. Over 90% of its customers are

prepaid, making this the dominant model.



Figure 2. Fixed and Mobile Broadband Subscribers

Source: McNamara, Stephen (2012) Telecoms, Mobile and Broadband, Buddecomm.

Advantages/Differentiators

In reviewing current commentary and

documentation about Fiji’s broadband

“readiness” we have found a divergence of

views, ranging from optimism to more sober

assessments. Fiji has been described as

“advantaged and yet not moving.” In coming

to grips with the current environment taking

shape in developing Fiji’s broadband future,

we identify what is needed for broadband

use and infrastructure to evolve. In a

nutshell, Fiji, the second largest of the

Southern Pacific island states (which do not

include Australia and New Zealand) after

Papua New Guinea has broadband

endowments that have helped generate

external support and interest in developing

its communication network. The principal

challenge is assembling Fijian capacity to

pursue a broadband vision.

In a nutshell, Fiji, the second largest

of the Southern Pacific island states

(which do not include Australia and

New Zealand) after Papua New

Guinea has broadband endowments

that have helped generate external

support and interest in developing

its communication network. The

principal challenge is assembling

Fijian capacity to pursue a

broadband vision.

Fixed Broadband

Mobile

Broadband



Current BB “Endowments”

D. Challenges to Creating an Enabling Environment

Similar to many other small island developing

states Fiji faces challenges related to the

tyranny of a small market: an economy that is

somewhat vulnerable to economic shocks

and a telecom market that cannot easily

support many additional entrants, leaving

operators and regulators in search of the

most feasible options to bring affordable

access to the outlying islands.

Fixed Constraints

• Difficult geography – Fiji’s remote

location differentiates it from some other

small island broadband markets such as

those in the Caribbean that are

proximate to larger economic entities. In

addition, remoteness within the islands of

Fiji is a differentiator

Domestic Resources

• Central location in Pacific islands • Relative size

Second largest South Pacific

Island state

• English speaking population - high literacy levels

External resources

• International organizations - World Bank, ITU, JICA, AusAid and others (note: some fund sources have slowed in protest to the Fiji government, but should resume after the elections in 2014)

• International carriers - Vodafone, Digicel

• Foreign investment - China, Japan, Korea, Australia

and others



o Fiji Islands comprises an

archipelago of some 322 islands

(106 are permanently inhabited)

and 522 islets. The two major

islands, Viti Levu and Vanua Levu,

account for 87% of the

population of 890,000, and one-

third of that population live in the

capital, Suva

• Small population with low ability to pay

• Underlying need for cohesion across

government institutions to address

issues with uncoordinated policy,

operational issues stemming from

colonial past, and an absence of

standards/technical standards

Addressable Challenges

• Institutional capacity: staffing resources

of the Ministry slow the pace

• Non- transparency: most people seem to

feel that the government is not

unpopular, and Fiji is stable and yet lack

of openness hinders policy development

and community driven initiative. Fiji has

been described as a “pull society” –

information is not made available; it must

be fought for

• Regulatory bottlenecks: e.g.

interconnection rates remain high which

hinders competition

• Need for IT education and computer

literacy among population: this

contrasts with a high general literacy

level

• Need for access devices (pc’s laptops tablets)


Telecentres

Telecentres are a key element of the national

broadband plan and were announced

simultaneously with the plan. Through

partnerships with the World Bank and key

industry players such as Telecom Fiji and

Vodafone which provides support with

infrastructure, several centers are being set

up.3 Fiji’s telecentres in use currently are a

relatively new and usage statistics, how they

are equipped and cost of operations are not

readily available. According to a Ministry

source, no numbers on cost are available but

they are “very sustainable” due to discounted

equipment and rates. Others have

commented that long-term sustainability is

more questionable—although they have

funding, it is not necessarily long term and

there is no revenue model for the centers.

They are funded by a six-cent levy on

incoming international calls (the foreign

caller pays this levy).

3 Fiji’s telecentres are buildings, for the most part schools that are wired with broadband and equipped with necessary communication technologies (phones, faxes computers). People in the communities visit these centers to access the Internet and gain training and familiarity with these devices.



Three were in operation shortly after the BB

plan announced. The first telecentres were

launched in Oct. 2012, in schools: Suva

Sangam College, Levuka Public School and

Rakiraki Public High School. At the

telecentre on Levuka, the old capital island

residents can use computers for two 30-

minute increments in a day. Although there

are plans for another 11 centres to open by

the end of 2012, this did not happen, due to

resources. However, another telecentre has

recently opened in Viti Levu to provide free

Internet access to the surrounding

community. Many of these potential users

consist of farmers and villagers who have

never used the Internet before. An assistant

will be available to help people learn how to

use Skype, Internet browsing, and other

services (Fiji Times Online, 2013).

Although evidence of telecentre’s supporting

the growth in computer literacy, digital and

social inclusion and the general expansion of

meaningful Internet use to populations that

are lacking Internet access are mixed

(Strover, Chapman and Waters, 2004), this

can be correlated to specific

implementations, rather than the concept

itself. Positive effects have been identified

(Mok, Koon, Liu, 2002). Malcolm and Corless

(2012) in their global survey report that

public access is the cheapest way to access

the Internet -- $15 vs. $49. For the most

inaccessible and least populated areas of Fiji,

telecentres seem like a cost effective means

to initiate broadband use. Thus, making sure

the telecentres have the capacity (training,

management, facilities, etc.) so they can be

successful is key.

The government of Vanuatu is likewise

opening telecentres on a small scale as a

means to cultivate demand and test

diffusion. Four sites were selected, with one

implementation in a remote area of Vanuatu.

A third party has covered costs for this

standalone facility located on a school

property, but they have been substantial.

While so far community participation has not

been robust, student use is strong. Part of

the initiative is to provide connectivity to

schools at the same time as a way to open up

access to the surrounding communities

(interview, Vanuatu government official).

An interesting example of one of Fiji’s

telecentres is bringing together communities

in remote villages of Wailoku and

Waisasavu, in the highlands of Naitasiri, Fiji,

to access information. These communities

can now access computers, Internet, and

other ICTs that help them gather

information and discuss pertinent issues

such as land boundaries and unemployment,

and job listings for young people.

In Wailoku village, the Telecentre will be

linked to the Peoples Community Network

(PCN), a group of people living in informal

settlements, to address issues affecting

them such as land tenure and education for

their children.

The communities are also using the

Telecentre to reach out to the government.

People used to send hand written letters of

complaints and inquiries to the government

departments, but now they can email them

directly, thanks to the Telecentre.

Source: Mutuku, Teresia, (2012) WACC supported

Telecentre connects rural communities,

http://waccglobal.org/component/content/article/181

4:wacc-supported-te



E. Central Issues for Fiji’s Future

Broadband Development

The following issues will be investigated in

coming to grips with factors that Fiji needs to

address, and how to think about moving

towards its broadband future.

1. What is the regional “why?” for further

deployment of broadband in Fiji? In other

words, is there a specific compelling

service or business, e.g. transport, that

would be supported with broadband?

2. How can demand and the market

environment best be cultivated?

3. Who will pay for and maintain

infrastructure? How will commercial

viability be attained?

4. To what extent can models from other

markets provide insight?

5. What lessons from Fiji are relevant to

other markets?



Part 2. Fiji’s National Broadband Plan

In line with many other national plans that

aim to provide wider access to faster

broadband, Fiji’s plan is based on claims that

it will:

• Boost economic growth;

• Save money through easier access to and

improve the quality of government

services; and

• Provide a range of environmental, health

and social benefits.

Fiji’s BB Plan of 2011 is the latest step in a

progression from the environment of a PTT

monopoly, to corporatization in 1990 to

competition in telephone, mobile and

Internet services in 2008. In the first decade

of the 21st century Fiji moved from a

telecom market dominated by three

monopoly operators, fixed domestic

telephone, mobile and international

connectivity to one with competition in each

area. In October 2011 Fiji took another

significant step, encouraged again as in 2008

by the World Bank, to construct a national

broadband plan stating, “The availability of

high quality, affordable broadband services

in Fiji is essential to facilitate innovation,

economic growth and development, and

social and cultural inclusion.” (Ministry-of-

Comm, 2011).

The principles of the BB Plan are the

following: it is market driven, there is

community involvement and ownership,

there is universal access, this access is

affordable and that government transform

its processes and “inspire” business to serve

the public, i.e. lead applications to pull in the

private sector.



A. Principles of Fiji’s BB Plan

Basic principles of the Plan are the following:

• Market driven: the provision of

Broadband will be market driven. To the

maximum extent broadband

infrastructure provision and service

delivery will be through the operation of

market forces.

• Community involvement and

ownership: Broadband should benefit all

communities in Fiji whether they are

academic, professional, urban, rural or

local communities. Broadband initiatives

will be undertaken based on community

ownership of facilities and community

responsibility for the delivery services on

a viable basis.

• Universal access: The policy reflects the

principle that broadband services shall

be accessible to all Fijians and Fijian

communities.

Access is a function

of availability,

affordability and

capacity to use. All

of these aspects will

be addressed in

programs designed

by the Government to ensure that

universal access is achieved. In particular

the Government will address broadband

access for communities that might not

otherwise be served through the

operation of market forces.

• Affordability: Broadband services at

entry levels shall be affordable for all

people in Fiji.

• Leadership: The provision of broadband

in Fiji should be private sector led

responding to market forces. However,

the Government also has a clear

leadership role in transforming its own

processes and public sector services

showcasing the opportunities available

through broadband. The Government’s

role in terms of lead applications should

inspire business and industry to develop

applications to more effectively

undertake their transactions with the

public and with each other (TAF, 2011,

7).

One feature of The Plan is the establishment

of a Broadband Policy and Programme

Committee:

The National Broadband Policy has been

adopted as an important comprehensive

government initiative. A Broadband Policy

and Programme Committee will be

established to oversee

the Policy, Plan and

program

implementation.

The Committee has the

following members:

• Permanent

Secretary of the Ministry of

Communications (Chair)

• Members representing each Ministry or

Department forming part of the Action

Plan

• A member representing the TAF

The Government’s role in terms of

lead applications should inspire business and industry to develop

applications to more effectively

undertake their transactions with

the public and with each other.



• At least one member representing the

ICT industry in Fiji appointed by the

Minister for Communications

• Other members on an ex officio basis as

determined by the Committee Chair and

approved by the Minister for

Communications from time to time. The

role of the Committee is to make sure

that the National Broadband Policy and

the Action Plan are implemented and to

ensure accountability on the part of the

Ministries, Departments and Agencies

responsible for each action or program

item…

The BB plan is a good starting point,

however the translation into

tangible action is understandably a challenge, involving all actors

understanding their role in the

planning process as well as how

each player is connected through close functionality.

The Ministry of Communications shall be

responsible for preparing regular reports (at

least quarterly) on the implementation,

monitoring, review and update of the Policy

and the related Action Plan for the

Government. The Ministry shall be

responsible implementation, monitoring and

review for the Policy and related Plan

overall, working as appropriately through the

Committee. (TAF, 2011, 11)

At the time of this report, however, this

committee had not yet been assembled,

indicative of what many have pointed out:

the BB plan is a good starting point, however

the translation into tangible action is

understandably a challenge, involving all

actors understanding their role in the

planning process as well as how each player

is connected through close functionality.

B. Challenges: Institutional Capacity

Institutional capacity has stood out as a

continuing challenge to generating

momentum for the BB Plan. Capable

individuals in the Ministry often are charged

with multiple responsibilities—the bottom

line—more full time people are needed.

An industry expert noted:

The TAF has a staff of 10 which is standard

for the Pacific Islands, but in the Fiji

Ministry, only two people are in fact doing

telecom. PNG’s staff is one hundred.

Vanuatu – has done a lot and brought in a

good regulator last year. The same is true

for Samoa’s regulator which has a staff of

10.



Coordinated action from multiple

departments in the government is another

requirement that is challenging. It is

acknowledged by all that having a National

Broadband Plan is an important step in

defining direction to help coalesce action,

however, the next steps are not easy. To

move forward Fiji’s broadband plan needs to

be “architected” – designed, planned and

defined so things that need to happen are in

place. In essence this comes down to a

unified vision at a number of levels which

remains a bottleneck. Below Figure 3, shows

the PTC Expert survey results which

acknowledge that institutional resources (for

TAF and the Ministries) is a necessary pre-

cursor for the National Broadband Plan to

progress. Other priorities after the need for

institutional capacity, according to the PTC

experts include network ownership

agreements and the involvement of private

enterprise. These organizational issues

appear to be a greater priority (or precursor)

to developing broadband demand.

Figure 3. PTC Expert survey shows institutional resources, network ownership agreements and

private enterprise engagement are priorities for the BB Plan’s progression

Source: PTC Expert Survey Q: To what extent do you think these items are needed so that Fiji can proceed with its National Broadband Plan? (percent agreeing to a great extent/some extent)

C. Challenge: The Need for Indicators

Fundamental to making a case for broadband

investment in “hard to serve” markets like

Fiji is economic justification: cost-benefit

analysis and demand studies to identify

pricing, the level of investment needed to

meet this demand and the projected rates of

return for investors and operators. Where

the case can be made, (e.g. in densely

populated urban areas with the potential for

paying customers) companies will likely show

up. In our interviews it was noted that



capacity to plan is supported by estimations

of expenses and costs, accessibility and

affordability, and expected penetration rates

throughout the various parts of Fiji.

We asked government officials about

quarterly reports that are supposed to be

released about the progress of the

Broadband plan. Again, lack of staff seems to

be the major reason

why such reports are

not available again

pointing to the need for

increased dedicated

hiring.

Finding the necessary

data for evaluation and

assessment is often

challenging for rural

and developing

markets, and usually

proxy measures are

used. Data on demand

does not appear to be

collected in Fiji and

thus, our analysis

necessarily makes

assumptions. Given the

importance of understanding demand for

gauging policy, technology choices and

expected outcomes, resources put towards

both collecting and disseminating this

necessary information would be well spent.

This is an addressable challenge and one

where “outsiders” could play a significant

positive role in evaluation and assessment.

Unbiased data of demand could reduce

investment uncertainty and provide a solid

basis for decision-making.

Indicators and surveys focused on

willingness to pay, openness to e-

government and online

education are greatly

needed. Any such effort

should represent a

random sample of

Fijians, specifically in

terms of location and

income. Similar to other

emerging (and

developed) markets

around the world, since

residents of larger cities

are commonly more

accessible and cheaper

to survey, data on

demand is very prone to

overestimation. Finally,

the economic benefits

of broadband adoption

in very small markets are different from

those in larger markets, and data needs to be

collected and analyzed to improve

assessments of results.

Given the importance of

understanding demand for gauging

policy, technology choices and

expected outcomes, resources put towards both collecting and

disseminating this necessary

information would be well spent.

This is an addressable challenge and one where “outsiders” could play a

significant positive role in

evaluation and assessment.

Unbiased data of demand could reduce investment uncertainty and

provide a solid basis for decision-

making.



Part 3. Overview of Fiji’s Telecom Sector and Broadband

A. Fiji’s Challenges to Creating an

Enabling Environment

Having commercial carriers like Digicel and

Vodafone is undoubtedly a plus for Fiji,

however, operators in general are unlikely to

move ahead of the broadband demand curve.

Government direction is a needed catalyst—

movement in providing public services to

spur network usage will support market

involvement in more remote Fiji where

profitable markets are not obvious.

While the government as a whole is fully

behind the National Broadband Plan, it faces

limiting conditions, similar to many other

developing markets that affect the strategic

development of a broadband policy. Fiji’s

post-colonial government was inherited in

1970 and like many developing countries has

not yet fully grown a coordinated

bureaucracy organically. Having the

requisite organizational architectures

already in place to coordinate an action plan

and the simple organizational awareness and

understanding of how roles are connected

and what precisely each actor’s role is in the

planning is difficult in the absence of long-

established mechanisms. The USP and PiRRC

among others are providing educational,

training and advisory resources to support

functional needs on several levels:

coordinating planning and the intersections

of government agencies, coordinating policy,

regulatory support, and analyses of demand

and how to stimulate usage.

Nonetheless, a coordinated responsive

government system is critical for providing



direction for a multifaceted effort that rests

on an enabling environment that has

traction. One commentator described the

need for the initial plan to now have a design

that defines how things need to happen on

the ground for affordability to occur. Even if

legislation is informed by best practices and

existing models, there still can be

bottlenecks since close functionality—

understanding the specifics of how the

environment is set so principles about what

is known can be translated to Fiji in addition

to an overall understanding and knowing of

what is going to be accomplished.

A theme applicable to many other nations

executing broadband plans that’s noted by

observers is the need for transparency of

government. The ability to make use of and

accept feedback, monitoring of practices as

well as sharing information are institutional

qualities that will support progress.

The PTC experts when asked what Fiji

needed to do to become broadband-ready,

collectively stated that building up the

governments’ capacities was the most

important element to address, relative to

other issues. Essentially, increasing the

governments’ will to implement the plan is

fundamental. Cultivating economic sectors

that need broadband or will drive broadband

were the next most important element in

need of support.

Figure 4. PTC Expert Survey on Broadband Readiness: What does Fiji Need to do to be

broadband-ready?

65%$

18%$

94%$

81%$76%$

59%$

82%$

69%$

0$

10$

20$

30$

40$

50$

60$

70$

80$

90$

100$

implement$programs$to$

create$demand$

develop$a$Fiji$broadband$eco?system$

build$government$insituBonal$resources$

develop$PPPs$ involve$private$

enterprise$

idenBfy$needs$of$populaBon$

culBvate$key$economic$sectors$

lower$broadband$

prices$

Source: PTC Expert survey on Fiji, Question: To what extent are the following items Fiji needs to address to be Broadband-ready? (5-pt. Likert scale, chart represents percent agreeing/strongly agreeing)



B. The State of Competition and the Major Players

Telecom Fiji Limited (TFL), Fiji International

Telecommunications Limited (FINTEL) and

Vodafone Fiji are part of the state-backed

holding company Amalgamated Telecom

Holdings (ATH). Telecom Fiji Limited (TFL),

the local incumbent operator provides

Internet thought its subsidiary Connect

Internet Services. Connect’s fixed broadband

service covers most municipalities in Viti

Levu, Vanua Levu and Taveuni and is the

most extensive in Fiji. At the end of 2009

Connect launched a mobile broadband

service—and coverage has expanded

gradually within the Suva-Nausoi corridor,

the Nadi-Lautoka corridor and Labasa

(TeleGeography, 2012).

While competitive conditions appear

somewhat limited, the small island market in

general has characteristics that naturally

limit competition. Very small markets may

not readily sustain even a single fixed

network infrastructure operator, let alone

many, which suggest that service-based

competition may not be the only option

(Sutherland, 2011). Overall, infrastructure or

inter-modal competition for fixed broadband

is limited on small islands; with few cable

television and WiMAX networks, and often

there are no networks present at all. Service-

based competition is present on French

island territories, Iceland and Singapore, but

on very few other islands. Lack of scale is a

major factor holding back market and

regulatory developments. The model

conventionally used in developed countries,

the “ladder of investment,” does not operate

in a recognizable way on a small scale

(Sutherland 2011).

On the mobile side, while pre-paid

broadband is emerging as an option, it is still

in the very early stages of development as a

business model, constrained by the lack of

current operators and of market entrants. It

seems likely that progress will come with

offers of pre-paid mobile broadband using

cellular networks, even if the services are not

strictly the same. However, 3G and LTE as

alternatives to fixed broadband are not a



certainty, nor is a combination with WiMAX

and DSL (Sutherland 2011).

In Fiji Vodafone has moved ahead with 3G

investments. Although ARPUs remain low,

usage activity shows positive signs. There are

challenges based on international transit

bandwidth costs per MB and backhaul

transmission costs. Additionally, there are

higher costs associated with network

equipment and backhaul links for 3G.

Figure 5. Summary of Fiji’s Providers

Fixed Line

Operators Wired ISP Mobile Voice

Mobile

Wireless

Fixed

Wireless

International

Transport

Telecom Fiji Ltd (TFL) wholly owned by ATH

Connect (DSL service) prepay and postpaid

Connect (CDMA service)

Vodafone Fiji ATH, owner

Vodafone Fiji

Digicel Fiji Digicel Fiji

Unwired Fiji

Fiji International Telecommunications LTD FINTEL ATH has management rights and shares

Kidanet (FINTEL)

FINTEL

Inkk FJ (VMNO)

Inkk FJ

FINTEL

Fiji International Telecommunications

Limited (FINTEL) is the only provider of

international telephony in Fiji and

terminations to the global and domestic

network. The company is jointly owned by

the Government of Fiji (51%) and ATH

(Amalgamated Telecom Holdings Limited),

Fiji’s principal telecommunications holding

company (49%). FINTEL also owns a 100

percent share in FINTEL Internet Services

Limited, called KIDANET which manages

Internet business in the retail market.

KIDANET offers wireless broadband and

broadband satellite services for remote

regions.

FINTEL operates a robust and diverse

international networking infrastructure

which includes the Southern Cross

submarine optical fibre cable terminal and an

Intelsat Standard A Satellite Earth Station at

its Network Operations Centre in Vatuwaqa.



This facility combination provides Fiji a

comparative positioning and advantage

available in other industrialized and

developed countries with direct access to

other global networks and various other

switching centers. (www.fintel.com.fj)

Fiji’s Backhaul

Fiji’s capacity has

improved greatly

through the recent

upgrading of the

Southern Cross Cable

Network (SCCN), which

has resulted in nearly

ten times its previous

capacity to support the

growth of 3G networks

and other potential

bandwidth demands.

Technically, when a

market has only one

cable it is a unique and

essential facility,

justifying regulation of

access and, if necessary

the prices charged for

access. There is

significant risk of a

vertically integrated

operator using its

access to the cable to

offer cheaper

broadband or bundling

international telephone

calls with broadband in ways that rivals

cannot. A useful precedent was set by the

French authorities, which determined the

prices for capacity on the undersea cable

from Réunion to France (Sutherland, 2011).

ISPs such as Unwired Fiji have noted

interconnection issues with the operator in

Fiji that manages the submarine cable,

Telecom Fiji (TFL) and in the end they

decided to use WiMAX. Nonetheless, large

price reductions in tariffs for bandwidth have

occurred over the past 2 years. In 2010 the

regulator took actions

and TFL lowered

interconnection prices.

Broadband Pricing

The PTC experts

estimate of Fiji’s

broadband willingness

to pay between $10 and

$20. Currently, the

least expensive

broadband plan price in

Fiji is USD $19.45

(monthly) through TFL

and USD $16.64 from

Unwired Fiji. There are

other providers of

broadband, but their

scale is small. FINTEL

provides broadband

through satellite

connections but it’s

used mainly for

business, due to cost

(more than USD $150

per month). Also,

Vodafone Fiji and

Digicel are entering the

market with the

development of their 3G networks and

through USB network access. In the mobile

space, Vodafone’s most affordable

broadband plan is 0.004 FJD/MB. They have

various bundled plans and special plans for

One PTC expert summed up the

broadband challenge in the Pacific this

way:

The small scale of the economies makes it

difficult to reduce the cost of broadband, in

addition to the expensive usage fee of the

Southern Cross submarine optical cable.

Generally people expect that once a

submarine optical cable connects to a

country, the speed of the internet

connection will be radically faster and the

cost will be much cheaper, but

unfortunately this does not happen so

easily. It is a fact that Fiji has a relatively

better connection than the other South

Pacific countries. If you define broadband

as <= 256Kbps then the connection is

reasonably available around the coastal

area of Fiji. The issue is the broadband

connection for inland rural area and

remote islands.

Shinya Murakami

Project Coordinator

Japan International Cooperation Agency (JICA)

USP-JICA ICT for Human Development and

Human Security Project



students. With Fiji’s tourist market, there is

opportunity to help fund this network

investment though international mobile

roaming charges (Sutherland, 2010).

Mobile Operators

Vodafone Fiji

95% of population is covered by Edge and 3G

HSPA services, supporting 21 Mbps

download speeds according to our industry

contact. Vodafone claims to have a business

case to support further network upgrades,

based in part on growth coming from

professionals and the youth market.

Digicel

Entering the market in 2008, Digicel at this

point has invested USD $140.4 million in a

GSM network in Fiji that covers over 96% of

the country and approximately 149,500

customers. They offer mobile money services

and pricing promotions to compete with

Vodafone Fiji’s near monopoly over Fiji’s

mobile market as shown below in Figure 6

(TeleGeography 2012).

Figure 6: Vodafone Fiji and Digicel Market Share June 2011-Sept 2012 (%)

Source: TeleGeography, 2012

Increasing competition in a small market is a

challenge relative to a large market that has

room to grow. Some of the regulator’s usual

tools like local loop unbundling, in the case of

the fixed network do not always produce

change if the limits of the market have

already been reached. Some analysis has

shown that lower prices, new services, etc.

are offered when a second operator comes

on the scene. The effect of a third operator

however, is not as clear; given the limits to

market growth there are often few carriers

interested in small island markets given the

limits of subscriber growth (Sutherland,

2010).



Unwired Fiji

ISP Unwired Fiji offers services in just 3 cities

(the Suva and Lami areas of Viti Levu) and the

most popular tourist sites. They use wireless

technology (a WiMAX microwave network)

to provide broadband. Within cities, pockets

are covered. They are still introducing

services which include low cost IP telephony

service.

Limited broadband competition is found is

Fiji where Unwired Fiji and a number of other

small providers using WiMAX and ADSL

compete in specific areas around the airport,

tourist spots, and the capitol and zones

within Viti Levu Island (Sutherland, 2010).

C. Regulatory Dynamics


Fiji appears to have a relative complex

regulatory environment consisting of the

Ministry of Communication, the Commerce

Commission and the Telecommunications

Authority of Fiji (TAF). An operator we

spoke with agreed that this is challenging,

but the breakdown of duties is clear to the

operators so they are able to work with the

system. Under-resourcing is a greater

challenge.

Noted by many of our interviewees,

strengthening the independence and

capacity of the ICT regulator would support

development of the national broadband

policy. One operator told us in late 2012 that

they have experienced challenges from poor

regulation in the past, however the regulator

is now playing an active role in setting forth

new policies to support broadband policies.

Our interviews also brought forward an

important difference between the regulatory

machinery of developed and developing

markets which rely on inherited systems.

Fiji’s bureaucracy is relatively new to policy

making. Whereas the transition to

liberalization for instance took time in

Europe and the US, compared to Fiji and

many other developing markets, a transition



phase was absent and so consequently new

policies were not followed overnight with

transformative results.

Rapid liberalization also requires regulatory

policy, ICT policy, trade policy, technical

standards, among many other elements

along the food chain (interview, Salanieta

Tamanikaiwaimaro). The necessary enabling

environment was not in place initially which

makes it difficult for a national action plan to

progress. A number of issues related to

regulation are associated with a lack of

historical evolutionary activity. Critical

issues about how the regulator should

behave include the degree of transparency

needed, how to efficiently handle disputes,

and how heavy-handed they should be in

different circumstances. This thesis requires

more development than current space

allows, but is noted for discussion purposes.

Among other functions the Commerce

Commission (CommComm) handles price

issues. Competition issues for example in

setting allowable rate changes, including

forcing lower rates for customers, and

interconnection fees that carriers may

charge each other. The CommComm also

created a fund from a fee on international

calls to support universal service. This fee

has been used to support telecentres,

according to our interviews. However, the

fund has as multi-million dollar balance

whose use will mainly be directed in accord

with the national ICT policy under

construction in the Ministry of

Communications. The CommComm has an

active web site where recent decisions

across multiple industries can be accessed

(interview Aslam Hayat).

The Telecommunications Authority of Fiji

(TAF) sets technical standards including such

things as numbering and infrastructure

sharing rules. It is reported to be

understaffed. As of late 2012 it did not have

a Web presence. TAF is supposed to be

independent and neutral and for this reason

the government hired its regulator from

outside Fiji (Australia) in 2011, but he left

after only about one year.

Fiji’s difficulties with retaining overseas

expertise are illustrated thusly:

The Fijian Government has appointed Ronald

Box as the chief executive officer of the Telecommunication Authority of Fiji

Wed, 16 Mar 2011

SUVA, Fiji (FIJI TIMES) ---- The Fijian

Government has appointed Ronald Box as the

chief executive officer of the

Telecommunication Authority of Fiji…As the

regulatory authority, TAF will be responsible

for issuing licenses to telecom operators as

well as spectrum management. It will also look

after the universal service scheme, with the

ultimate objective of allowing everyone access

to telecommunication…Commenting on his

appointment, Attorney-General and

Telecommunications Minister Aiyaz Sayed-

Khaiyum said it was important to hire someone

from "outside" to maintain the independence

of the authority. Box said it was important that

TAF was independent, open and transparent.

Ronald Box stayed less than a year…

News Vacancy - TAF CEO 31 July 2012

The Telecommunications Authority of Fiji

(TAF) is seeking to recruit an experienced and

dynamic individual well versed with managing

the affairs initially of a Telecommunications

Regulatory body for the position of the Chief

Executive



The Ministry of Communications sets policy.

It is handling a draft national ICT policy of

which universal access is a part. The Cabinet

was expected to release the policy by the end

of 2012 and appoint an advisory board, but

has not yet done so. Statistics are hard to get

even for the Ministry and TAF due to

“commercial issues,” according to our

interviews. As demonstration that staff is

stretched thin: Shivnesh Roynendra Prasad

in the Ministry has a number of different

roles including Acting Director of

Communications - Department of

Communications, and the Principal

Economist - Department of Public

Enterprises, Ministry of Public Enterprises,

Communications, Civil Aviation & Tourism.

He is widely regarded as one of the most

active and motivated individuals in the

government working to push Fiji’s

broadband plans forward. However, he only

has four staff including himself, specifically

two technical staff and one engineer. While

governance of communications in Fiji faces

constraints on a day-to-day basis, another

issue is the lack of clear evidence as to the

appropriate kinds of policies in small-scale

markets, given the lack of economies of scale.

Small island regulators have fewer tools at

their disposal. The effectiveness of measures

like unbundling and bitstream access are not

clear in the developing small markets

(Sutherland, 2010). Enforcement of

cybercrime and other cybersecurity issues is

also a problem in much of the Pacific Island

region. Niue, Tokelau, Pitcairn Islands and

Micronesia for instance are all are attractive

locales for cyber-criminals given their

remoteness and lack of law enforcement

(Kshetri, 2012).

As comparative cases, Vanuatu and the

Solomon Islands both are also developing

broadband strategies, considering universal

service plans (currently Vanuatu does not

have a universal service policy).

Vanuatu’s broadband policy like Fiji’s is “top-

down” in that it is coordinated from the

Prime Minister’s office and seeks to be

comprehensive in terms of involvement of

stakeholders and developing demand by

building momentum for the easiest cases –

preferably where there is some kind of

existing activity to work from. Overall, the

government is focused on making sure that

plans are integrated between various

branches of the government, rather than

driving them and showing what ICTs are

capable of in various domains such as health

and education, and then allowing the

services to be proposed by the stakeholders

in these domains themselves. Additionally,

efforts are being made to identify

“champions” – such as school principals to

demonstrate to others the value of Internet

access. Local IT companies and others who

are already working with communities are

seen as liaisons to demonstrate the value of

ICTs to others. (Vanuatu government official,

interview)

To address backhaul, at the end of this year

Vanuatu will be getting a submarine cable

which is government supported, but the

result of a private initiative.



PiRRC, Vanuatu and Solomon Islands

The Pacific ICT Regulatory Resource Centre (PiRRC) was established in 2011 with two years of

funding -- about US$2M -- from the World Bank and others. The Sri Lankan ICT think-tank

LIRNEasia is the contractor and supplied PiRRC’s director Muhammad Aslam Hayat. The

members are the small countries of the Pacific that can now get advice and share ideas on

regulatory best practices and most importantly, train indigenous regulators.

In addition to the regulatory theory-driven PIRRC, Pacific countries can look to two of their

neighbors that have transparent regulatory agencies also backed by international aid agencies.

They can observe regulation in action with successes (mainly) and some difficulties. The

regulatory bodies of Vanuatu and Solomon Islands are characterized by small-sized

organizations with small staffs and active web sites.

The Telecommunications & Radio Communications Regulatory of Vanuatu (www.trr.vu) has a

staff of 12. They cover the range of technical standards to universal access plans and funding for

a population of about 256,000 (2012). (The current levy on service providers is 0.71% of

revenue to support a modest Vt25,000,000 (US$275,00) annual UAP fund. Total budget in

2011 was almost Vt19M or about US$2.1M). The decisions and filings are posted regularly for

all to see including complex issues like interconnection rates and possible incentives to increase

broadband.

The Telecommunications Commission of the Solomon Islands (www.tcsi.org.sb) has a staff of

seven, according to its web site. It has a budget of approximately US$2.5M for a population of

about 585,000. TCSI currently has open consultations on a national broadband plan, a potential

third mobile operator and licensing conditions. It too has managed payments to the former

incumbent, dominant operator. The TCSI’s small staff may account for less posted activity

compared to Vanuatu’s.

The Samoa Office of the Regulator (www.regulator.gov.ws) has a staff of 11 for a population of

about 195,000 and was originally set up by 2005 legislation. It collects a combination of fixed

fees and 2% of gross revenue. Retail Internet is taxed at Tala 0.70/GB (0.31 US$).

These countries made the decision several years ago to create competition and were given

funding to create regulators. They are laboratories where regulatory theory can be observed in

action. Although one Pacific incumbent’s CEO called Vanuatu’s experience a “disaster” due to

the new mobile operator’s success, national coverage increased significantly at modest cost to

the ratepayers. The independent regulators have different oversight bodies but similar

structure and challenges. Smaller countries can likely afford even smaller regulators perhaps by

sharing staff or regional regulation.

Daniel Smith, University of Hawaii



D. International Agencies: Making

the Best Use of Outside “Help”

A prominent feature of Fiji’s ongoing

broadband dynamic is the presence of

outside assistance in the form of advice and

funds. As is the case in many other emerging

economies, international organizations like

the World Bank and ITU play a supporting

role in broadband investment. Fiji’s enabling

environment consists of support from

several entities including the ITU, World

Bank and PiRRC.

With international support, specifically the

Japanese government, the Pacific ICT

Regulatory Resource Centre (PiRRC) was

established in 2011. According to PiRRC’s

director, Aslam Hayat, it is a centrally shared

resource center for information on best

practices for the Pacific and supports the

crafting of policy and regulatory documents

in the service of telecom operators and

governments (interview, Hayat). An observer

referred to it as an extraordinary resource

that provides unbiased expertise.

Fiji was selected as the site for PiRRC

because of its central position in terms of

trade, travel, and as an aviation hub--to reach

most of the South Pacific transit through Fiji

is necessary. In terms of manpower and

education is said to be an obvious choice

because of factories, business

establishments and the regionally

educational resource, the University of the

South Pacific.

According to ITU consultant, a primary

writer of Fiji’s BB Plan Jim Holmes,

(interview, Jim Holmes) a broadband plan

requires a high level of commitment from

government, a few enthusiasts is not enough.

He suggests that external experts are useful

to support government “drivers.” Although

the private sector is integral, generating a

comprehensive approach to drive broadband

usage fundamentally requires the

government to lead the initiative. In addition,

national plans need to be evidence-based,

rather than aspirational.

How technical knowledge and management

skills can be transferred to reduce

dependence on external expertise is an issue

that resonates in Fiji as well as many other

developing economies. Methods to

“integrate” policymaking, regulatory and

technical assistance into the institutions

needed to provide leadership and a

comprehensive vision—an “information

society” seems to necessitate specific

measures that include training and

education. Finally, it was pointed out in

interviews that it would be a good idea to

bring in companies from outside to build

remaining infrastructure – for example,

companies from Australia and China have

the equipment for fibre, wireless and

satellite. While there may be an

understandable motivation to keep

resources in the country, having an outside

entity with experience implementing the

chosen infrastructure could bring a strong

result.

E. Organizing Stakeholders

How can ongoing coordination,

communication, information sharing be

engendered between the private sector, the

government and NGOS’s is a question not

only for Fiji, but nearly everywhere efforts

are being undertaken to connect the



unconnected. According to Bob Lyon, NGOs

and the private sector may have similar

development aims, but often work on parallel

paths. Getting them to work together is the

challenge. In addition to coordinating the

variety of stakeholders involved in Fiji’s

broadband future, how best to integrate

advisors (World Bank officials, consultants)

to avoid a disconnect between

regulators/policy people, others and ICT

experts brought in to advise is a central issue

that we identified in our research—not only

in the case of Fiji, but on the other islands as

well. Situations were described such as two

VSAT dishes installed right next to one

another; the result of two different

organizations efforts, while a building across

the street had no power or connectivity. The

same situation can result with overlapping

consultancies leading to multiple or

inconsistent solutions. Projects also are

repeated on occasion. (Jim Holmes,

comment)

In general it was noted that equipment costs

are high in the Pacific Islands, along with

extraordinarily high-energy costs. In fact fuel

costs were noted as one of the largest

operational costs. Interconnection costs are

also high. These high initial costs imply the

need to line up and organize multiple

stakeholders. The cost of energy and access

to reliable power is a key issue in Vanuatu as

well as Fiji—the government in Vanuatu has

tried to “follow” the extension of electricity

to help avoid standalone efforts that will

then face the complications of power needs.



Part 4. The Business Case for Fiji: Cultivating Demand and Building Capacity with Usage


To build broadband use both our interviews

with government officials, NGO’s and the

private sector all suggest several use cases

that could be fostered: Fiji as a regional hub,

(and data hub, generator of local content,

manufacturing, tele-health, tourism, e-

government and education to further

diffusion through schools as the anchor

tenants along with community centers as

initial evolutionary mechanisms for building

demand among the population). Jim Holmes

remarked that broadband demand does not

drive itself—it is caused, it is an outcome

(Holmes, 2011).

Observers generally stated that Fiji would

benefit tremendously from further

broadband access and services. Specifically,

the transportation within Fiji can be time-

consuming—the roads in places are not good

and driving to the capital can take several

hours. E-government services and mobile

banking are two services that would help

alleviate some daily inconvenience on the

part of everyday Fijians. Development of the

tourist industry from the community level

could contribute to greater prominence of

Fiji’s cultural heritage.

As noted by nearly all we spoke to,

developing broadband use as part of a

national plan, rather than for its own sake

requires design and planning from the

ground up. Our interviews identified areas

where demand may as yet be

underestimated. The National Broadband

Plan notes an intention to provide services

like telehealth and education to inhabitants

in the most secluded areas. Public services

that are difficult and/or expensive to provide

seem straightforward options to support

broadband investment. Although vulnerable

to global economic downturns, tourism is a

current source of broadband demand that



may ripe for more comprehensive growth

through development beyond the large-scale

resorts. As one of the more important

sectors in the Fijian economy, hotels, tourists

and other elements of this industry need

communications and importantly it can and

does pay for access. There is some

uncertainty in building infrastructure based

on tourists, but development of services that

support this industry has potential according

to several comprehensive studies carried out

by USP researchers (Doormen, 2004).

Our research suggests that agriculture has a

less viable business case – given the small

distances that farmers need to travel to bring

products to market, relative to a place like

India where distances can be significant. As it

takes about 2 hours to travel from one end of

the island to another, information

asymmetries are less a problem than in other

places. Broadband can facilitate other

aspects of this industry however, such as

marketing and information.

It should be kept in mind—some use cases

that can be envisioned such as tourism, data

centers, and education may not actually

require comprehensive solutions, but rather

localized broadband is sufficient (Downhiller

interview). A point often made was that

growth in usage would advance the

motivation for more substantial solutions.

The idea of a step-by-step approach is seen

by many as an efficient way to proceed,

demonstrating that once broadband has

been made available there is demand. John

Turnbull of O3b suggested that starting

small in places where the demand is not yet

defined made sense; broadband is

introduced in a lower cost manner to see

how it increases and then pursuit of more

substantial investment can then be

supported.

A. What Do Customers Want?

The growth of a few mobile services in Fiji

has been steady: Vodafone has a mobile

banking trial underway that is currently used

by some. Although it is SMS-based and thus

does not require broadband, it is a possible

pathway to drive other entrepreneurial

activity and services. Fiji also has a relatively

large emigration rate, 62.2% of the tertiary

educated population, 2010, and $128 million

in remittances (est. 2010), according to

World Bank figures (World Bank, 2011).

Source: Flikr

www.flickr.com/photos/smemon/5684115572/

(under Creative Commons license)

Facebook is another popular service, (noted

in our interviews that this service fits the

norms of Fiji’s village-based cultural

practices as well as being used by the farming

industry). Mid-2012 estimates of Face book

users were around 165,000, representing

about 18% of the population and a user base

that has grown over 35% year to year

(McNamara, 2012).

Role of Users and Communities in the

Broadband Plan

The BB Plan can be considered a “top-down”

initiative—an approach that could be

successful, but this does require execution

capabilities—sound design, wide consultation



on all aspects of the initiative and monitoring

of practices. Setting the conditions that will

do these things so that a holistic approach is

possible needs to be broached - perhaps

beginning with small steps forward. Studies

so far suggest that local community

involvement plays an important role in the

effective take-up of broadband services

(Latté man, C. et al, 2006). Telecentre

development is one means to reach the

population if implementation is managed

effectively.

B. Services to Drive Business Model Development


Fiji as a “Hub” for the Region

Building on the various broadband

“endowments” of Fiji: central geographic

location in the Pacific Islands in terms of

trade, travel/aviation, manpower and

education of population in terms of setting

up a business establishment, Fiji is an

optimum location for wider business around

the Pacific. Ron Box commented that Fiji

seeks to be a benchmark for the region and

developing business around remote

conference services and offshore data

storage centers are more fitting with the

vision of Fiji as a hub. Considering Fiji is a

transport hub, support of this existing

activity through ICT investment is a viable

option for support (interview, Ron Box). The

Prime Minister has stated that Fiji is

developing its ports so that they can

transport cargo throughout the Pacific

(Foreign Direct Investment, 2012).

Also noted by Box is the fact that although

tourism seems the most apparent industry to

emphasize as a driver, in fact telecom is the

economy’s engine that can drive the growth

of other important services like tourism. A

focus on telecom and the tourist industry

would be mutually reinforcing.

Public Services: Government, Health,

Education (Connecting schools and distance

learning)

The PTC Expert survey indicates strong

belief that developing broadband through

public services will support the growth of

broadband demand in Fiji. On the other hand,

the development of local Pacific Island

content was not seen as a driver.

Entertainment-related content was viewed

as the least promising area for building

demand in Fiji (a negligible 12% of the

experts saw this as an area with potential).



Figure 7. PTC Expert Survey of Broadband Services for Fiji: To what extent are these areas

promising targets for building BB demand in Fiji?

Source: PTC Expert survey on Fiji, Question: To what extent are these areas promising targets for building

BB demand in Fiji? (5-pt. Likert scale, chart represents percent agreeing to a great extent/to some extent)

Healthcare, education and tourism are

clearly seen as the most promising sectors

for building demand in Fiji, both by the PTC

experts as well as observers we spoke with.

These views also fit the conventional wisdom

of building broadband to support use of

public services that will encourage user

adoption along with improving living

standards and productivity enhancement.

Specifically, tele-health has long been seen as

a means to help governments, particularly in

developing countries where “transactions

costs are high because of logistical problems

(Sein and Harindranath, 2004), to extend

universal healthcare services to remote

areas. For developing countries telehealth is

often viewed as an economically viable

means to increase the quality of medical

services. Similarly, tele-education provides

governments with the means to increase the

level of education and to extend the learning

experience to the homes. Another public

service that the government could provide is

early warning alerts for natural disasters.

Our research, confirmed by the PTC expert

survey (53% agreement to a great extent, the

highest ranking preference among the

possible services described in the survey)

identifies education as one of the drivers and

primary benefits of extending broadband in

Fiji.




Education

USP offers a number of ICT-related courses,

particularly in the computing and

information science faculty, including formal

degrees and non-credit courses through the

Community and Continuing Education

Programme, using university computer

laboratories and distance learning.

Additionally, it is offering professional

certification in Red Hat Linux, CompTIA A+,

and Cisco Certified Network Associate

(CCNA). Further, ICT elements are being

incorporated into most subject areas,

including science and engineering,

economics, tourism, governance, creative

media and statistics.

From our interviews, it seems that efforts are

being made to support online curriculums

and providing access devices, but initiatives

are in early phases. It is not completely clear

where funds for educational initiatives will

come from although tax benefits are offered

to local corporations for supporting these

activities. Also, there are no taxes applied to

imports relating to technology and access

devices that support public initiatives

(Vodafone, CS). Private enterprise is involved

in educational outreach. For instance,

Vodafone supports m-education, m-health,

and cloud services for government and public

service initiatives. M-paisa and mobile

banking are a particular focus and can

support the growth of remittances which has

become an important source of income in Fiji

and other Pacific Island nations including

Tonga and Samoa which receive over 25% of

their GDP in this form.



University of the South Pacific: Distance education as a driver of broadband demand in the Pacific

ICT plays an indispensable role in today’s education sector. Most learning and teaching tools

deployed by educational institutions are invariably ICT driven. It is technology that, inter alia,

allows us to examine, analyze, facilitate and reform how students learn, how teachers teach and

how instructors facilitate learning. Telecommunication technologies have in the recent past

influenced learning and teaching processes to a great extent. One such technology is

broadband. Students and educators both benefit through broadband services by becoming

more curious, creative and innovative. Of course, learning then becomes more accessible and it

attracts a wider community of learners. Learning now easily happens outside of classrooms and

learning institutions. The education sector is riding high on tools such as eLearning and

mLearning due to the availability of broadband.

For Fiji, broadband service allows education to be available in rural communities where

educators are at times difficult to find. A number of rural schools in Fiji depend totally on the

broadband services to offer their programmes successfully and without face-to-face contact of

teachers. Mobile apps such as the edutainment modules are currently been designed and

developed to provide better service to the people of Fiji. Devices that use broadband services

are on the rise.

For The University of the South Pacific (USP) its membership stretches over 12 Pacific Island

countries -Cook Islands, Fiji, Kiribati, Marshall Islands, Nauru, Niue, Samoa, Solomon Islands,

Tokelau, Tonga, Tuvalu and Vanuatu, and in an area of 33 million square kilometers. Most of

these countries have limited or very expensive broadband services. Telecommunication

problems are not only faced by locals and businesses, but also by USP in its operations and its

ability to offer reasonable priced services and products to its students. Definitely, a more

enhanced, robust and effective broadband service would allow for many forms communications

to take place from an educational perspective.

SNAPSHOT #4 Uses & Impacts of Broadband in Higher Education

Uses Impacts • Research by students &

educators • Use in educational

administration • Planning & administrative tasks • Online learning • Mobile learning

• Changes in the institutional roles of universities

• Creation of competitive online universities

Source: US Chamber of Commerce: Broadband and Education



The kinds of educational technologies that can be provided through enhanced broadband

services include video conferencing tools, which allow students to be using for example, Skype

from home to connect to other students and their teachers to facilitate more interactive

discussion. Also eLearning and mLearning services allow learning to happen from anywhere

anytime. Using interactive classrooms, regional students can share their work, showcase their

results, carry out group work and interact with students based in other campuses. The above

sourced table reflects use and impacts of broadband in the educational sector.

The University of the South Pacific has an

effective structure to be able to support

enhancements in technology advancements. In

the new Japan Pacific ICT Center there are two

state-of-the-art video conference facilities and

USPNet services which is a satellite network

connecting the 12 member countries of USP. The

university is connected to the AARNET

(Australia's Academic and Research Network)

which gives the university huge bandwidth to use

for research and development in the areas of

education and technology. The university also has well-established and well supported

eLearning and mLearning teams that work to progress and realize its online presence. USP uses

the open source tool MOODLE for its delivery of courses. USP also has its own SMS Center

which is connected to the two major mobile service providers in Fiji and this allows the

University to be able to communicate with its students and staff. The SMS service is used for

example to provide students useful information in a timely manner. Students can also use the

service to seek information about their gradebooks and exams. The service has also been

extended to include edutainment.

All in all, learning takes place in everyday life and in terms of the economic development

opportunities that can arise from enhanced broadband services are numerous. Referring again

to rural areas where a mother can learn how to take care of her baby properly, a farmer can

better understand climate effects and the best times to grow which kinds of crops in which kind

of soils. Fisherman being able to access better access weather information before going out to

the open seas. Working class and matured students being able to get a degree through

eLearning and mLearning services. The Pacific region has a long way to go, not only to make

broadband readily available to its people but to design and develop features, modules and

applications which use broadband to educate its people and improve their livelihood.

Dr. Bibhya N. Sharma

Associate Professor of Mathematics | Associate Dean - Learning and Teaching Faculty of Science, Technology and Environment

The University of the South Pacific http://www.staff.usp.ac.fj/~sharma_b/




Technology and Connectivity in Fiji’s Primary and Secondary Schools

The Vodafone Foundation and the Duke of Edinburgh’s Award

In an effort to promote technology uptake in primary and secondary schools across Fiji, and

simultaneously build career skills among both teachers and students, the Vodaphone ATH Fiji

Foundation is promoting, supporting, and enabling schools across the country to participate in

the Duke of Edinburgh’s Award Programme.

At present, there are 100 schools in Fiji participating in this program, which promotes civic

values such as social service, team building, local entrepreneurship and professional skill-

development. Thirty-six additional schools have been approved for participation in the program

starting in 2013. There are 970 primary and 178 secondary schools in Fiji. At present, 75 of the

178 secondary schools have Internet connectivity. The Ministry of Education aims to connect

25 more schools in December 2012 and has a target of providing connectivity to all schools

across the country by the end of 2013. Perhaps the greatest challenge facing this endeavor will

be providing both computer technology and Internet connectivity to the schools currently

without electricity.

With assistance from adult Leaders (these are teachers who receive training from the Duke of

Edinburgh’s (DofE’s) London-based staff during school holidays), student-participants in the

DofE program select and set objectives in each of the following areas: volunteering/community

service, physical activity, practical and social skills-building, and expedition/travel. One example

of such a project carried out in Fiji was the planting of new mangrove trees to attempt to

ameliorate an ecologically fragile situation.

Participants are required to submit information quarterly on the projects they’ve undertaken

and the progress made toward their enumerated goals. The submission of these quarterly

updates from Fiji takes place online, which necessitates access to technology and Internet

connectivity for schools and participants.

In locations where students’ skills-development in information and communications technology

(ICT) cannot be taken for granted, such as in Fiji, the DofE program helps foster incentivization

for developing these skills.

Students are not required to participate in the DofE program at their school, but on average,

approximately 30 per school opt in to the program. The program itself is designed to be self-

sustaining, once up and running, as activities that will help fund-raise the modest sums required

to run the program can be integrated in to the proposed professionalization efforts and

undertakings.

In additional ICT-in-the-schools efforts, Fiji’s Ministry of Education is currently developing

curriculum for using computers in the curricular subjects. Grades 3-through-7 have computer



instruction as a required course, and the Ministry of Education is working to provide the

necessary hardware to all the schools. In terms of Internet connectivity, the Ministry is

currently relying on the Internet Service Providers, like Vodaphone, to provide connectivity to

the schools. Presently, there is Internet connectivity available in all major towns across Fiji, so

students in need of an Internet connection can make the journey to town if this is not too

difficult for them. However, the Ministry is still addressing the challenge of rural, isolated, or

Island schools that might not have easy access to Internet connectivity—or, even more

importantly, to electricity, as mentioned above.

For their part, the Vodafone Foundation is also providing both programs and ongoing capacity-

skills building to their partners, which includes the schools. They have developed an m-health

program for the Fijian islands, which, in partnership with the Ministry of Education, is being

taught in the schools (in addition to reaching 40,000 people per day through SMS messages with

health-related tips).

Islanders are facing a ramping up in the incidence of non-communicable diseases, such as

diabetes, high blood pressure, and liver ailments, many of which can be attributed to the

increase in the amount of processed foods rather recently introduced into the Islanders’ diets.

The aim for this particular project is to target the young, not only so that they will convey what

they learn in this program to their parents and get a jump-start in life on understanding that

what they eat and drink contributes to their overall health, but also to train these students to

utilize computers and the Internet, and thereby develop their ICT skills, as part and parcel of the

program, given its digitized and online content.

Dr. Laura Hosman

Illinois Institute of Technology

Broadband and University of the South Pacific (USP)

The USP-JICA (Japan International Cooperation Agency) ICT Project will implement a

broadband connection via Ku-band Satellite to the rural and remote islands where there is no

chance for access via the submarine optical cable.

The broadband connection will mainly be used for

the provision of tertiary education and community

services. A launching ceremony recently occurred

at Savai’i Island in Samoa attended by the Prime

Minister and Education Minister of Samoa (1st Nov

2012).

In Fiji, the project has already setup a Ku-band

connection on Vanua Balavu Island in the Lau



Group. USP is planning to set it up at Sigatoka, Rotuma, Rakiraki and Taveuni in the near future.

USP-JICA ICT Project has introduced broadband connections (shared transponder equivalent

5Mbps downlink and 512Kbps uplink) to a total of 10 USP learning Centres located in the

remote islands of the South Pacific Region (Fiji, Vanuatu, Tonga, Solomon Islands and Samoa)

where there is no commercial broadband service readily available. The learning centre is open

to the public and some centres provide their broadband connection to nearby public schools

and dispensaries by Wi-Fi. The satellite transponder rental fee is covered by USP and the JICA

which donated the satellite equipment.

Shinya Murakami

Project Coordinator Japan International Cooperation Agency (JICA)

USP-JICA ICT for Human Development and Human Security Project

Telehealth

Demand for health services exists as Fiji has

few hospitals and much of the population is

serviced through small health care centers

that need connectivity (interview, Aslam

Hayat). Given Fiji’s large rural population

which includes more than 40% of the total

residents who are scattered over 110

different islands, delivering health care to

every community is extremely costly. The

history of primary health care goes back in

the late 1970s, after Fiji signed the 1978

Declaration of Alma-Ata of “health for all” by

the year 2000. Since then Primary Health

programs have faltered across much of Fiji,

due to a shortage of health workers and

funds (World Health Organization, 2008).

There is a clear shortage in number of

doctors per population (Fiji Islands Health

System Review, 2011). The ratio of doctors

to 1,000 population was less than 0.5 in 2008

which is considerably low compared to

developed countries (for the US it is 3 per

1000). This ratio is further depreciated in

rural areas, leaving many areas with no

doctor at all. The Fiji government finances

the bulk of health care expenditure (61% in

2010), with 30% coming from private

sources and 9% from external sources

(Negin, et.al. 2012). Development assistance

for the health sector has grown from FJ$6.9

million in 2007 to FJ$22.1 million in 2010,

and as a share of total health expenditure,

from 3.4% in 2007 to 8.8% in 2010. The

Australian government is the primary

funding source, providing 60% of total

external funds. Relative to some of the other

Pacific Islands (Tonga’s dependence is four

times that of Fiji), Fiji is less dependent on

external donors, yet 9% can be considered a

significant input. The clear implication

however, is that if health care costs could be

lowered, (and levels of service and access

improved this would be of benefit to the

country as a whole).



Figure 8. Doctors per 1,000 Population in the Pacific Islands

Source: The Fiji Islands Health System Review, Asia Pacific Observatory on Health Systems and Policies,

2011 1:1.

Thus, telehealth could be a means of

delivering health services by healthcare

workers outside of Fiji to supplement the

shortage of medical personnel in country.

Depending on the level of services offered,

bringing telehealth to rural Fijians would

require high speed internet connection

(Moffatt and Eley, 2011). Providing

healthcare: prevention, diagnosis and

treatment, to remote areas has been a

continuing concern in Fiji, so this is a need

that broadband could potentially address.

There are examples of success with

healthcare information accessible via

broadband and mobile phones in other

markets like Africa. Telemedicine currently

implemented in Hawaii has reduced the

number of people going to emergency rooms

for routine off-hours ailments (Fried, 2009).

Tourism


Tourism could be a vehicle for social and

economic development in Fiji as well as many

other Pacific Islands. Thus integration with

the global economy is a priority. Fiji hosted

674,913 tourists in 2011 a rise of 6.8% from

2010 (Mooney, 2012). Although the major

resorts in Fiji already provide sufficient

broadband to visitors – services for the

mainstream resort industry are met, a

holistic model of tourism development that

provides benefits more widely-- “eco-



tourism,” or “community-based tourism” has

been comprehensively studied as a way to

stimulate entrepreneurship and economic

integration with the mainstream tourist

industry, e.g. day trips to caves, organic salt

production (Doorne, 2004). Support for

smaller tourism establishments as

alternatives to the large-scale resorts along

with auxiliary services has also been studied

as a means to provide a wider breadth of

commercial activity in Fiji that would be

supported with broadband access. Critics of

the mass tourism industry in Fiji suggest that

the large luxury resorts in Fiji are foreign-

owned and thus profits don’t make their way

down to the local economy and although

they provide local employment, the bulk of

the jobs provided are menial, relative to the

positions held by the expatriate workers. As

a result, despite a growth in tourism, poverty

has increased (although the decline in

agriculture and other factors are also a

factor). Nonetheless, studies find that large

and small scale tourism both make positive

contributions to job and revenue creation

and community development, but there is

much potential from small-scale forms of

tourism to have an impact on underlying

economic conditions (Scheyvens & Russell,

2012).

However, studies conducted by researchers

at USP conclude that a more robust

broadband infrastructure has potential to

benefit the local community and industry as a

whole: small tourism enterprises could be

facilitated, access to hotel industry workers

could also increase efficiencies. It was

generally concluded that e-commerce and

better infrastructure would benefit these

small tourist enterprises, thus supporting

“bottom-up” development, i.e. encouraging

growth and the spread of economic benefits

more widely while preserving the cultural,

social and environmental integrity of

development (UNDP, 2001). The idea of

tourism for development –to function as a

vehicle for broader social and economic

development, involves communities and

participatory approaches. A challenge to

empowerment of communities is the

hierarchy of existing government and other

organizations. Theoretically in a small market

such institutional barriers would seem easier

to address. However, the human capacity

issues in Fiji’s government work against the

need for stable institutional structures. As an

example of how participatory development

can occur: workshops for developing the

USP’s tourism model involved activities with

a group of local women from the Lomawai

village who has established operations to

make salt for ceremonial purposes. Through

the project, development of their activities

for tourist consumption moved forward and

funding for this local entrepreneurial activity

was sought (Doorne, 2004).4

General issues include:

• Lack of Internet and computer literacy,

thus requiring dependence on external

technical expertise

• Lack of infrastructure

4 Hudson, (2008) reports on an isolated indigenous

community of Bario in the hinterlands of Sarawak

(Malaysian Borneo) that used its telecentre to create a

website on its ecotourism activities and local lodges,

and to book accommodations and provide responses to

tourist queries. Several professionals who left the

village to pursue education and careers have returned,

knowing that they can now work from Bario while

contributing their skills to its development.



• Transparency of processes and stable

institutional environment

• Cost

Community Involvement

Initial and potential successes in tourism

(Doorne, 2004) and telehealth (2011)

demonstrate how local participation can lead

to services developing that meet needs

appropriately. Doorne’s study on building the

tourist industry through a community-based

participatory process details an “inside-

outside” approach to build services that

involve community groups and local

managers.

Enterprise Services – Corporate

Conferencing, Call Center, Data Hubs

Several commentators and individuals we

interviewed believe that Fiji has attributes

that can allow enterprise services to be

exploited: the low cost of labor, relatively

high percentage of college graduates,

English-speaking population, good time zone,

Fiji’s geographic location as a “hub” and the

fact that there is plenty of reliable capacity

given the submarine cable. Fiji does currently

have small-scale call centers, with limited

personnel, and provides this service to

companies like the Australian telecom

company, OCIS.

An interesting business possibility noted by

some was the use of broadband to create

back-office enterprises for the developed

world (David, McMaster & Novak, 2002). The

advantages listed above would support such

development, however the fact that

computer literacy is low and some fears of

political instability make the idea of an IT

service sector less likely. In addition, the

standard factors that determine the

presence of investors in IT services include

transparency, consistent commercial laws,

sound macroeconomic management of the

economy, protection of property rights and

enforcement of contracts, and finally, overall

political and economic stability (ibid, 2002).

The fact that the Fiji government has been

known to monitor Internet activities and

control access to websites hinders external

perception that it is an open environment

(Malcolm, 2012). To build on advantages and

promote Fiji as a suitable place for IT

investment, observers recommend that more

resources be allocated for ICT training,

create joint ventures with multinationals,

streamlining of business processes (reducing

the time lag for various approvals), and lastly

ensuring broadband availability (David,

McMaster & Novak, 2002). Fiji’s government

has been making efforts to limit bureaucracy

and focus on greater transparency according

to the Prime Minister (FDI, 2012). The

overall sense from our interviews and expert

commentators however, is that the

enterprise service market is in very early

stages, and does not yet have momentum to

drive broadband expansion. A few of the PTC

experts felt that off shore industries such as

data centers and corporate conferencing

were promising targets for building demand,

but the majority favored public services,

tourism and the idea of Fiji as a regional

“hub.”



Part 5. Demand Scenarios

The costs and benefits of possible scenarios are analyzed to provide a projection of a future

broadband market in Fiji based on historical data, using a regression model. Using the projected

market to estimate the cost and benefits of the different scenarios, possibilities are evaluated. The

approaches here are meant to be illustrative of techniques that would encourage national

discussion and help set priorities. In practice, much more data is required.

A. Demand Scenarios – A

Quantitative Assessment

Estimating demand using data provided by

FINTEL, World Bank, and the Fiji Statistics

Bureau through economic modeling has been

carried out to analyze the demand and

sustainability of broadband implementation

in Fiji and suggest analytic exercises that TAF

might pursue using the data that they

maintain if such modeling is not being

conducted presently.

Elements of the model include:

A. Number of Internet users in Fiji

categorized by their connection type (e.g.

broadband, mobile, etc.) for the past 10

years

B. Level of access to communication and

information technology (e.g. pc,

smartphone access)

C. Data related to current capacity of

broadband connections and prices

D. Real (inflation is accounted for) gross

domestic product data



Demand Forecast

We can extrapolate broadband usage in the

future for Fiji and find the quantitative effect

of influential factors. Having a realistic

forecast is essential. A high forecast will lead

to an unrealistic projection of profits and a

low forecast will lead to lost market.

There is strong evidence (Jovanovic and

Lach, 1989) of four distinct phases in the

adoption of technology--this includes

broadband usage. These four phases are

introduction, growth, maturity and decline.

Broadband in Fiji has grown since 2000 as

seen below in Table 9. Although there has

been a drop between 2006 and 2009, the

overall trend still can be interpreted as

increasing.

Figure 9: Broadband Users 2000–2010

Source: World Bank Survey, McNamara 2012

According to Caselli and Coleman (2001)

Internet adoption in general depends on

GDP per capita, the real cost of Internet

access, the telecommunication and Internet

infrastructure. Besides these factors much

research has shown that Internet usage each

year is highly correlated with the past years’

usage. These are all-important factors in

determining Internet (broadband) demand.

To get an estimation merely for broadband

growth we also add the relative price and

quality of broadband service. Below is the

linear model:

Where Y is Fiji’s GDP per capita, P is the

average price of broadband access in Fiji, C is

the infrastructure factor which is a proxy for



the penetration of information and

communication technology in people’s lives.

The percentage of individuals with personal

computers is considered as the proxy here.

Previous research by (Trkman et. al. 2008)

has found a relationship between individual

PC access and broadband access in EU

countries.

Figure 10. Fiji’s Broadband Growth

Year Users GDP Per Capita Infrastructure 2000 3500 3447 0.05

2001 5500 3582 0.05

2002 7600 3750 0.05

2003 9000 3862 0.1

2004 11000 4172 0.1

2005 13300 4323 0.1

2006 10677 4514 0.1

2007 13681 4566 0.1

2008 15713 4668 0.15

2009 15499 4610 0.15

2010 15752 4609 0.15

2011(e) 15900 4625 0.15


We might expect a positive association

between Yt (GDP per capita) and usage since

higher income per capita will make it easier

for people to pay and have access to

broadband services. A negative value is

expected for !2 as higher prices will

5 are expected to be positive since better

infrastructure, lower comparative prices and

higher usage in the previous year would

positively impact the current years’

broadband demand.

Forecast for Fiji

Using the proposed model we can calculate

the following table by an OLS (ordinary least

square) regression as shown below in Figure

11.

Figure 11. Fiji’s Demand Growth Estimate

Coefficient Const -19346 GDP Per Capita 6.567 Infrastructure 55532.2 Last Years’ Users 0.258350




This means each $1 increase in GDP per

capita will add 6.6 broadband users. A 1%

increase in the percentage of individuals with

access to a PC will add 555 users

(55532.22/100=555).

A unit increase in the number of users is

associated with a 0.25 increase in users for

the following year. This effect can account

for the slow growth after a decline. In other

words when the number of users grows in a

community this will lead to higher future

growth or a decline may lead to further

decline if other factors don’t change. This can

be viewed as a feedback loop.

We should note that these estimates merely

show an association and can be used at most

for prediction purposes. Such models do not

necessarily indicate a causal relation or

direction of causality. To study the causation

relationship between these factors a

comprehensive data set and study is

required. Thus, we don’t know if access to

more PC’s will increase the number of

broadband users or if the increase in

broadband users leads more individuals to

buy PCs.

B. Technology Choices

A point of debate for small island markets

like Fiji is which broadband technologies are

most appropriate in different contexts. Every

choice has pros and cons in terms of cost,

speed, reliability and other measures that

must be weighed against constraints. In

general low setup costs are necessary, and

providing service to remote areas is needed.

This remains the most challenging effort

from a technical standpoint. Two viewpoints

stood out in our interviews: broadband will

necessarily include mobile (3G, then LTE)

(although the backhaul still needs to be

there), and building broadband as demand

grows in an evolutionary manner is sensible.

It was noted that in some other small

markets such as Mongolia, the value

proposition has been to start with and then

move up the chain slowly (Darrel Owen,

interview). The UN suggests in a recent

report that satellite is the solution in the

Pacific sharing costs with neighbors (2011).

Our recommendations for Fiji’s further

broadband efforts are made using the

Analytic Hierarchy Process (AHP), which is a

structured technique for organizing and

analyzing complex decisions. Rather than

prescribing a correct choice of technology,

the AHP helps us find one that best suits our

goal and understanding of the needs and

limitations of Fiji. Our options are (ADSL,

BPL, Microwave, WiMAX and Satellite), and

our criteria factors are: range, cost, setup

cost and time, and rate capacity.



Figure 12. Criteria of Broadband Technology Choices for Fiji

Technology Max Range Relative Cost Advantage Limitation

ADSL 5.4 km Average–High (Depending on

distance) Uses existing line

Bandwidth is distance sensitive

BPL 3km High Uses existing power lines

Expensive power line upgrade is required for Fiji

Microwave 5km

Low–Average (Depending on

number of towers)

Quick setup Point to Point

Standard WiMAX

10km Average Standardized NLOS

Rate per subscriber is limited to 2Mbps

Satellite Up to

36,000 km High Large coverage

Very expensive, limited capacity per subscriber

The first step in the analytic hierarchy

process is to model the problem as a

hierarchy which consists of an overall goal, a

group of options for reaching the goal, and a

group of factors relating to alternatives to

the goal.

As most observers see mobile playing a

major role in the future of broadband in Fiji,

mobile is included here--a mobile connection

to the network needs WiMAX which is

included in the analysis.

Figure 13. Hierarchy of Technology Choices



Analysis of the hierarchy is provided by

experts (from PTC’s Board, industry and

academic members) through a series of

pairwise comparisons that derived numerical

scales of measurement for each node. The

criteria are pairwise compared against the

goal for importance. The options are also

pairwise compared against each of the

criteria for preferences. Comparisons are

processed mathematically, and priorities are

derived for each node. The following results

were obtained, below in Figure 14. Weights

are used, and are normalized and shown as

percentages:

Figure 14. Results of Pairwise Comparisons

Criteria Weight

Range 13.7%

Cost 56.5%

Setup Time 8.5%

Rate Capacity 21.2%

The weight of each criterion demonstrates the normalized result of a pairwise comparison of each

criterion against another. Below is a portion of the PTC Fiji expert survey and the relevant

criterion matrix.

Figure 15. Expert Comparison Results of Broadband Features

Compare which Broadband feature is more important than the other one and then scale the importance

Range, Cost Very strong importance

Range, Setup Time Strong Importance

Range, Rate Capacity Equal Importance

Cost, Setup Time Strong Importance

Cost, Rate Capacity Moderate Importance

Setup Time, Rate Capacity Moderate Importance

The corresponding matrix for the survey is shown below, with darker colors indicating stronger

importance.



Figure 16. Expert Comparison in Matrix Form

Range Cost Setup Time Rate Capacity

Range 1 1/9 7 3

Cost 9 1 7 5

Setup Time 1/7 1/7 1 1/5

Rate Capacity 1/3 1/5 5 1

The next step is to rate alternatives in order

to compare them with the criteria. In this

step there is a pairwise comparison of

alternatives according to each criterion.

These pairwise comparisons provide 4

different matrixes. The matrices are then

used to calculate the priorities for each

alternative according to our criterion.

Figure 17. Expert Comparisons in Matrix Form

Range: ADSL BPL Microwave WiMAX Satellite

ADSL 1 5 3 1/7 1/9 BPL 1/5 1 1/3 1/5 1/9 Microwave 1/3 3 1 1/5 1 WiMAX 7 5 5 1 1 Satellite 9 9 1 1 1

Cost: ADSL BPL Microwave WiMAX Satellite

ADSL 1 7 1/3 3 9 BPL 1/7 1 1/3 1/7 5 Microwave 3 3 1 1/5 3 WiMAX 1/3 7 5 1 7 Satellite 1/9 1/5 1/3 1/7 1

Setup Time: ADSL BPL Microwave WiMAX Satellite

ADSL 1 5 1/5 3 5 BPL 1/5 1 1/7 1/5 1/5 Microwave 5 7 1 5 7 WiMAX 1/3 5 1/5 1 7 Satellite 1/5 5 1/7 1/7 1

Rate: ADSL BPL Microwave WiMAX Satellite

ADSL 1 1 3 3 5 BPL 1 1 3 5 7 Microwave 1/3 1/3 1 3 5 WiMAX 1/3 1/5 1/3 1 5 Satellite 1/5 1/7 1/5 1/5 1



Figure 18. Weight Matrix of Technology Choices and Criteria

Range Cost

Setup Time

Rate

ADSL 0.09 0.33 0.16 0.35 BPL 0.05 0.04 0.06 0.37 Microwave 0.16 0.28 0.58 0.14 WiMAX 0.37 0.32 0.13 0.09 Satellite 0.33 0.03 0.07 0.05

The alternatives with respect to their

strength in meeting the criteria have been

evaluated and the importance of each

criteria determined. Next, the priorities of

each alternative with respect to our goal is

calculated. For each alternative we

calculated the following:

1. Its priority with respect to “range,”

multiplied by “range” priority with

respect to our goal.

2. Its priority with respect to “cost,”

multiplied by “cost” priority with respect

to our goal.

3. Its priority with respect to “setup time,”

multiplied by “setup time” priority with

respect to our goal.

4. Its priority with respect to “rate,”

multiplied by “rate” priority with respect

to our goal.

Adding 1-4 gives us the overall priority for

each alternative: adding the rankings of 1-4

gives us the overall priority for each

alternative as shown below. BPL and satellite

score very low compared to other options.

ADSL has an edge over WiMAX and

microwave making it the best option,

according to the prioritization of the experts.

Figure 19. ADSL: The selected technology option

Rank Technology Score

1 ADSL 0.28658

2 WiMAX 0.26162

3 Microwave 0.2391

4 BPL 0.11299

5 Satellite 0.07871

Implications for Fiji

From our AHP analysis, ADSL, WiMAX and

microwave links are the best choices

considering needs and constraints in Fiji. A

quick look at the current situation in Fiji

shows that ADSL and WiMAX are already

currently deployed. Unwired Fiji currently

provides WiMAX connections in Fiji’s

principal tourist spots and populated areas.



WiMAX

Considering WiMAX range limitations and

the low density of population in non-urban

parts of Fiji, further WiMAX deployment

would be costly. Delivering a WiMAX

connection to a device can cost anywhere

between $4 to $30. This cost is in the upper

range for locales with a low population

density. Thus, it could address a small portion

of the demand if the bulk of users willing to

pay more than $20 are less than 30% of the

population. Thus, WiMAX does not appear to

be a sustainable technology to deliver

broadband to rural areas without

subsidization.

ADSL

The other option is ADSL, which requires a

landline. The past year has seen an increasing

trend towards replacing landlines with

wireless phones. Besides requiring a landline,

ADSL is distance sensitive, meaning that

bandwidth decreases significantly as the

distance between the user and provider

increases. Although both WiMAX and ADSL

are solid options in the populated and urban

areas of Fiji, they are less feasible for

delivering broadband to sparsely populated

areas.

Microwave

Microwave links, the traditional workhorse

of fixed-wireless broadband systems have

been around long before the term wireless

broadband was used. It’s a point-to-point

LOS wireless transmission method for up to

155 Mbps, with a range of more than 5 km.

Microwave infrastructure is significantly less

expensive than ADSL and WiMAX, especially

considering Fiji’s terrain. Although

microwave links have the great disadvantage

of limited data rates, this could be an

acceptable trade-off for serving the less

populated areas of Fiji. Considering the low

cost and setup time, microwave links are a

technology that should be considered by

providers to deliver Internet to the least

accessible areas in Fiji and could also be a key

element for providing further coverage in

Fiji. Although microwave links have two

disadvantages: limited data rates and line of

sight limitations, a clever network design can

overcome these problems and provide an

acceptable trade-off for serving the less

populated areas of Fiji. Considering the low

cost and setup time, microwave links are a

technology that should be considered by

providers to deliver Internet to rural areas in

Fiji and could be a key element for providing

further coverage.

Satellite and Broadband over Power Line

(BPL)

Acknowledging that these are two very

different technology solutions, we look at

them both here only in terms of a few

considerations. Both satellite and BPL scored

very low (0.03, 0.04) on the cost criteria, the

most important factor according to our

experts. BPL has challenges associated with

increased cost. For example, each time a

device is turned on or off, a pop or click may

be introduced into the line. Switching power

supplies can introduce noisy harmonics into

the line and power wirings have no inherent

noise rejection system. Thus, the system

must be designed to deal with these natural

signaling disruptions and work around them

which means new and more sophisticated

power line systems. This makes BPL

extremely costly for rural and remote areas



of Fiji. Meanwhile it still can be an option for

compactly populated areas of Fiji and

deployment in such areas is worth further

study.

Satellite also incurs a high cost to both users

and providers, usually 3-6 times higher than

an ADSL connection (Ida, 2000). Another

issue is rain fade which an important issue

for the Pacific islands (Cobb). While it is

costly and possibly not reliable, satellite can

still be considered as an option in remote

locations where other options are not

possible due to range limitations.

Recommendations for Fiji

ADSL and WiMAX services are already

available in all major cities including Suva,

Lami, Nadi, Nakasi, and Nausori geographic

areas (McNamara, 2012). These two

technologies are suitable to provide service

to the 50% of population who live in urban

areas. Our expert survey using AHP also

confirms that these 2 technologies are the

right option to further increase the access

rate in these areas.

Satellite connections are also already

available in Fiji by TFL (and FINTEL), but as

mentioned the price is very high, ranging

from $295-$465 per month

(http://www.tfl.com.fj), making it an option

only when all other technologies fail to reach

the user. According to our expert analysis

Microwave links have the potential to be

further employed to serve rural areas

specifically because of low installation costs.

Microwave links provide lower bandwidth,

but this is less of a problem in rural areas

because each is intended to serve only a

small population.

Microwave Cost Estimate

There are several factors that impact the

cost of delivering broadband to a rural area

in Fiji via Microwave links. Cost is mainly

influenced by distance, installation per link,

terrain, climate and reusability options.

Figure 20. Attributes of Microwave

Capacity Up to several Gbps

Distance influence on Costs

Cost per link with some incremental cost with the distance Fast deployment time

Terrain Suitable for any terrain Requires line-of-sight between two link end-points

Reuse options Equipment can be disassembled and relocated somewhere else

Climate Influenced by climate Adaptive modulation and a proper link planning reduces climate effects

Source: Mobile Backhaul vs Microwave, Tzvika Naveh, October 2009



We have calculated the cost to deliver broadband to Swani which is about 17 km. (10 miles) north

of Suva in the main island. The terrain is covered with tropical forests which increases trenching

costs of a fiber line $10-$20 per meter, but does not have a significant effect on the cost of

microwave link installation. Considering the effective range of each tower to be 4-5 km, to deliver

to Swani, 4 towers would be needed. The average cost of a tower that includes the equipment

cost, installation cost, antenna, and annual maintenance costs is shown in the table below.

Figure 21. Mobile Backhaul

Source: Mobile Backhaul vs Microwave, Tzvika Naveh, October 2009

Figure 22. Microwave Link Costs

Microwave Link Cost One Link 4 Links Equipment, Installation, antenna and maintenance

$16,000 $64,000

Erecting New Tower $50,000 $200,000 Total Cost 66,000 $264,000

As a comparison: the total cost of delivering microwave links to Swani are $264,000 compared to

the total cost of a fiber optic line which is essential for a technology like ADSL:

Figure 23. Fiber Installation Costs

Fiber Installation Cost Per Meter 17 km

Ethernet Switch $2500 $2500

Trenching Cost Per Meter (Includes infrastructure, renovation and construction)

Rural $30 $510,000

Rural (Tropical Forest) $40 $680,000



Figure 24. For Distances More than 1 km Microwave Links Cost Less than Fiber

Most rural communities like Swani have a

small population, making the demand for

broadband low as well, reducing the required

bandwidth capacity. Microwave links have

bandwidth limitations in contrast with fiber

technologies, but the limit will not be

reached with the low demand of a locale like

Swana or other rural areas of Fiji.

This order of magnitude estimation will

depend on the size of the village, and villages

along the way and other factors. To set goals

and judge bids in any reverse auctions for

universal service programs, governments

need these kinds of estimates.

In addition to capital investment, another major cost to maintain a broadband network is operational expenditure or OPEX. OPEX has three principal components: management costs, maintenance costs, and marketing costs. In Fiji, the bulk of management expenditures would be associated with new equipment and associated human resource management--understanding and mastering the technology. The maintenance cost would

mainly include cost of equipment maintenance and customer service operations. Since rural Fijians would be getting access for the first time, there are likely to be numerous failure reports in the first 1-2 years which mostly occur on the home user side. The last element is marketing costs which depend on specific strategies chosen by providers.

Below we estimate the maintenance portion of OPEX for deployment of microwave links in rural Fiji. First. It should be noted that microwave costs are distance-insensitive within the range of each link so the equipment maintenance cost majorly depends on the number of towers deployed.

We use Swani as the site to calculate OPEX per capita to deliver broadband via microwave:



Figure 25. OPEX Costs

Item Quantity Cost/Year Total/Year

Tower Rental 4 $1,000 $4,000

Energy 4 $500 $2,000

Maintenance 4 $1,500 $6,000

Customer Service & Technician 1 $9000 $9000

Total $21,000

Population 500

Annual Cost per Capita $42 Source: Nepomuceno, Napoleo (2010) Network Optimization for Microwave Wireless Backhaul.

Figure 26. OPEX Breakdown

Source: Nepomuceno, Napoleo (2010) Network Optimization for Microwave Wireless Backhaul.

The cost of customer service & technicians is estimated based on hiring one technician for each 100 households which is likely an underestimation, since initially more support is needed. Another issue that is relevant in Fiji’s environment is rain fade which can be handled with higher power output (MEF, 2011). This can increase energy costs by a small percentage. It is then also necessary to use fans or other cooling devices - a technical issue that depends on network design.

Customer service expenditures can be addressed to some extent. (In the US 65% of

failures occur at the home - this percentage is higher for rural households). Error detection systems and knowledge-based systems can help both technicians and users to understand the technology and reduce OPEX. Microwave links have a significantly lower CAPEX than fiber, but fiber has a lower operating cost. (Analysys Mason, 2011). In the table below the discounted present value of both technologies for Swani is compared and it is shown that microwave links have a much lower aggregate cost over a 10-year period. (After 10 years both technologies may face unexpected maintenance costs.



Figure 27. Comparison of Microwave and Fiber Costs

Technology CAPEX Annual OPEX Present Value (10 Year Operation)

Microwave Link $264,000 $21,000 $452,634

Fiber $680,000 $0 $680,000

Assumed Interest Rate: 2%

C. Decision Tree Analysis of Investment and Demand

Decision tree analysis is a support tool for

decision-making that uses a tree-like model

of decisions to delineate the possible

consequences. It’s an effective method to

illustrate algorithms in decision analysis and

a means for supporting the complementary

decisions needed to for a BB Plan. ITU

consultant Bob Horton suggests this

methodology as a tool in drawing up BB

Plans and populating it with data from

countries that have already made decisions

on a number of levels or are in the process of

doing so (Horton, 2011).

To apply this method to the process of

creating a National BB Plan, Horton suggests

six levels of decision points (nodes) that

include: the foundation (initial

considerations/consultations), the goals and

targets, the institutional form of regulation,

the regulatory support mechanisms,

infrastructure investment and the industry

structure. Each of these levels has a number

of options. See appendix 2 for further

explanation and examples of use in

developing a National BB Plan.

Amongst decision-making support tools,

decision trees have several advantages.

• Simple to understand and interpret

• Valuable even with little hard data.

Important insights can be generated

based on experts describing a situation

(its alternatives, probabilities, and costs)

and their preferences for outcomes

• Possible scenarios can be added

• Worst, best and expected values can be

determined for different scenarios

• Can be combined with other decision

techniques

Small Island Broadband Investment

Decision Tree

A decision tree can help identify a strategy

that is most likely to generate the maximum

number of additional BB users through a

public private partnership (PPP). In our

decision tree we study two partnership

scenarios where a $10 monthly subsidy is

provided to users. The first scenario involves

giving a subsidy to urban users and the

second involves providing the subsidy to

rural users. In addition, we focus on two

relevant technology choices for each

scenario, based on the AHP analysis in the

previous section.

At the beginning of this report we show an

estimate for willingness to pay in urban

areas. We may drive a discrete probability

distribution by taking the midpoint of each

interval to represent willingness to pay:



Figure 28. Urban Willingness to Pay

Urban Willingness

to Pay

Percentage of

Population

$5 22%

$15 50%

$25 14%

$40 14%

We do not have willingness to pay estimates for rural areas, but assuming it has a direct

relationship with income, we can get a rough estimate by multiplying the urban estimates to the

ratio of average rural income to average urban income in Fiji.

Figure 29: Household Income Fiji

Average

Household Income

Number of

Households

Rural 11608 87562

Urban 23036 89347

Ratio: 0.50 --------

Source: Fiji Bureau of Statistics

Figure 30. Rural Willingness to Pay Fiji

Rural Willingness

to Pay

Percentage of

Population

$2.50 22%

$7.50 50%

$12.50 14%

$20.00 14%

Considering that the most inexpensive plan currently available is $16.64, a $10 subsidy would

increase broadband access by 50% in urban areas and 64% in rural areas. In addition we can

estimate the probability of successful coverage based on AHP scores previously calculated.

Attaching a probability of 1 to the rank1 (ADSL), the rest of the probabilities can be calculated

relatively:



Figure 31 Success Probabilities Based on AHP Scores

ADSL 1 BPL 0.39427 Microwave 0.834322 Wi-Max 0.912904 Satellite 0.274653

Using all the above information we can make the decision tree. For example the outcome of the

first branch is calculated by:

Number of Rural Households * Increased Penetration Percentage = 87562 * 64% = 56,039

Thus, according to the decision tree the optimum strategy to maximize increase in household

access is to provide a subsidy to rural users and choose microwave links as the technology. The

route is demonstrated in green.

Viewed from left to right as shown below in Figure 27, the decision tree has burst nodes (splitting

nodes that can be either a decision or a chance node), but no converging paths so branches can

never combine with each other. Three types of nodes are used in this model:

1. Decision nodes - commonly represented by squares

2. Chance nodes - represented by circles

3. End nodes - represented by triangles



Figure 32: Decision Tree Analysis: BB for Rural Fiji

Horton notes the need for targets that are

both transparent and thus open to analysis

and discussion. They need to be reasonable

and based on available evidence. As is often

the case in developing countries and noted

by many – getting reliable demand estimates

is extremely challenging and thus, regulators

in some countries, the Dominican Republic

and Peru for example have used a proxy

approach, using data from rural areas in

other countries where networks have been

built and made adjustments based on

demographic data to get proxy evaluations of

uptake and other measures. Pilot projects

are also useful ways to establish a starting

point for modeling and to accommodate the

lack of historical traffic and service data

(Horton, 2011) – this would be a useful way

to evaluate demand potential in Fiji.

In addition to building infrastructure in line

with usage, conducting cost benefit analysis

is required so that appropriate broadband

technologies are selected. In Australia for

instance, the government began with an idea,

a plan and money. A national company was



formed (NBN) to build a fibre (93%), wireless

(4%) and a satellite network (3%) –

technology choices depended on

appropriateness over the span of the

geography. Malaysia also had a plan that was

initially based on 80% fibre, but the

government subsequently revised this to

70% fibre, 20% wireless and 10% satellite.

The important point is that data was

available for these adjustment to be made.

(interview, John Turnbull, O3b)



Part 6. Who Will Pay for the Infrastructure?

A. Infrastructure Sharing

Our interviews suggest that not a great deal

is currently in the works to support

infrastructure sharing, although most agree

this makes sense. There is some sharing of

infrastructure with broadcasters and

Unwired Fiji is working with Digicel to share

towers. Government interviews

acknowledged the need for unbundling and

that policies are in the works. However,

despite deals in the making, there are not yet

incentives to share. Vodafone states they

already share infrastructure and have

policies in place to share towers. In terms of

backhaul from cell sites, self-provisioning

occurs – wireless carriers do it themselves.

Open access is not present in Fiji – all the

operators currently compete against one

another – they are independent and have

their own fiber. As a result this small place

has three separate infrastructures (which

includes University of South Pacific which

has its own facilities). A way forward is

mandating infrastructure sharing (interview

Aslam Hayat). If this occurred, strategically

placing fibre rings so that everyone could buy

access would be a way to lower

infrastructure costs. The government has

made announcements about infrastructure

sharing, noting that they are considering

mandating it. Some duplicate infrastructure

is already in place which however will require

assessment and coordination.

Sharing could be accomplished under

wholesale regulation – the regulator would

intervene in disputes about prices. There are

no existing regulations, only termination

rates for national and international calling

(regulated by Comcom, not the TAF).

Another option: nationalizing the cable

connection so anyone can buy access as has

been done in the Marshall Islands. This idea

however, is not supported currently

according to our interviews. In general,

unbundling is needed, but the rules for this



are not developed, and greater regulatory

development and business maturity from the

operators is needed. Also noted by Hayat,

carriers usually do not want to allow

competitors access--they are reluctant

because they do not think they can make

money from this arrangement. In most cases,

once they are forced to do this, however,

they experience success (interview, Aslam

Hayat).

B. Who Will Pay for Networks?

A broad universal service fund policy for Fiji

is currently being developed that seems

likely to include broadband services.

However, the perennial question facing Fiji

as in all emerging economies is the “who

pays” question—and before this question can

be answered, a demonstration of demand is

needed which has not yet been carried out in

Fiji. Government can help network

deployment by subsidizing the costs as has

been done in many places – however, a

revenue generating model for the mid and

long term – i.e. developing services from the

network is the obvious stepping stone to

recovering investment. Thus, creating an

environment where telecom vendors, small

business, and the wider society is supported

in arrangements to make new services

available is critical. As discussed, evolving

services around target areas that make sense

can create the base needed for further

investment. As an executive from a global

equipment provider noted, “The GDP is low

– maybe the services aren’t there—to

implement something is costly. The domestic

and international cost of backhaul is

expensive.” Another interviewee remarked, a

BB Plan comes down to having money and

putting in infrastructure, whether it’s the

incumbent carrier or a third party

construction arm, knowing what technology

will be utilized and an idea of how services

are going to be delivered.

C. Broadband Models

Public Private Partnerships

PPPs are the Fiji government’s preference

with the involvement of the principal carriers

already in Fiji (TFL, Vodafone). The PTC

Experts agreed that developing PPPs is a

priority for the National Broadband Plan

(81% agreed/strongly agreed). Observers

have indicated that PPP development is still

in the conceptual phase at this moment.

Arranging PPPs to fulfill the comprehensive

goals of a BB Plan including tele-health, e-

government, and other services provided

through a nation-wide infrastructure,

however it should be noted is a complicated

proposition.

A likely situation would have the government

funding network development with private

companies maintaining operations. In July

the World Bank presented in Fiji several

components of PPPs that can be considered

critical success factors. Chief among them

include transparency and predictability in

contractual agreements. A complementary

progressive regulatory framework is the

second element. Furthermore, in terms of

the public sector role and expectations, an

appropriate and transparent structure is

needed for managing funds, procurement

and disbursement, monitoring and

evaluation and project selection

(Beschorner, 2012). Overall, predictability

and stability need to be guaranteed traits of

the government. In terms of the private



sector, expectations include timely delivery

of quality services at a reasonable cost to

customers. Difficulties can occur even with

subsidies and other investment funds if

appropriate regulatory instruments are not

in place (e.g. open access).

Attracting private investment can be difficult

if government processes are not ready to

manage the endeavor. If the business case is

weak, it is even more vitally important for

government to create a conducive (i.e.

transparent and predictable) environment

(Beschorner, 2012).

Additionally, the capital investment by any

private partner necessarily requires some

short-term returns. A recent ITU report

(2012) describes the three distinct layers of a

broadband network which each have very

different characteristics with respect to their

cost and return on investment. The first layer

is the passive layer (civil works and dark

fiber) which can account for up to 80% of

costs and has a payback period of

approximately 15 years. The second layer is

the active infrastructure layer, where the

intelligence of the network is concentrated

with a 5-7 year period for return. The service

layer has a very different cost structure and a

much shorter rate of return. Thus the first

layer is the most difficult to account for due

to the high cost and length of return. One

option for a PPP is to have the government

invest in building the first layer in the rural

difficult areas, providing the infrastructure

for a competitive market for investment in

the second and third layers. The appropriate

technology choice can impact this costs and

return period. For example, wireless

technologies like microwave links (previously

described) can decrease the first layer cost

by eliminating construction works required

for fiber installation and shorten the return

period due to a shorter installation time.

A customized location-based policy could

also fit Fiji. Urban areas can have a

competitive broadband market, and a free

market can increase broadband access in

places like Savusavu, Sigatoka, Tavua,

Rakiraki, and Nadi. Meanwhile the same

policy might not increase access in rural and

less populated areas, due to low willingness

to pay. These areas are important for long-

term economic growth and social

improvements. Providing access to these

areas is important for fulfilling Fiji’s BB Plan.

A PPP where the government provides a

subsidy to the private sector might be the

best option for Fiji, given the data we have

collected about the readiness of the

government. The government would only

provide a subsidy that took the form of a

one-time grant to the private sector or a

continuous subsidy to households for

broadband.

The subsidy could be provided to the private

sector or households or a combination of

both to provide a safety net to private sector

investors.

Other PPP models include:

• Operations and Maintenance:

Government contracts with a private

partner to maintain the service. Under

this option, the government retains

ownership and overall management of

the network.

• Design-Build: Private partner provides

both design and construction of a project

to the government. This type of



partnership reduces time and save

money. It also reduces conflict by having

a single entity responsible to the

government for the design and

construction. In this way the government

owns the network and is responsible for

operation and maintenance.

• Design-Build-Maintain: In this case the

network system for some period of time

will be the responsibility of the private

sector partner. The additional benefit is

that maintenance risk is allocated to the

private sector partner. The government

owns and operates the network.

Budget Telecom Model (BTM)

As developed by LIRNEAsia, this solution

provides voice and data connectivity to

dispersed populations with little disposable

income (2011, Samarajiva, R & Zainudeen, A).

Basically, this involves radically reducing

costs on backhaul networks, access networks

and terminal devices. (so far the model has

been limited to mobile access) Success has

been identified in four countries in South

Asia: Bangladesh, India, Pakistan and Sri

Lanka and was a result of operators

innovating in unexpected ways to save costs

and make profits under less than ideal

regulatory regimes. This model is perhaps

not easily applied to the Fiji market however,

(and other markets with low population) due

mainly to the small size of the market.5

Evolutionary Route to Broadband

Given the cost to provide broadband to the

entire citizenry of Fiji coupled with lack of

data on potential usage, a gradual staged

5 Rashid Shafi, PTC Broadband Advisory Board, analysis of BTM

introduction of broadband would allow

demand to grow in line with supply. A

strategic plan for Fiji would include the

following:

1. Building institutional capacity in

government: architecting a plan,

organizing stakeholders, initiating

demand building activity (community

centers, tele-centers),

evaluating/measuring demand and other

indicators to identify the broadband

tipping point.

2. Beginning the effort with a demonstrable

pre-existing project that shows value. For

example, Singapore’s Tradenet.

Singapore started with a trade-related

exchange that demonstrated increased

efficiencies for business

3. Creating a broadband “climate” through

involving, educating and training the

population

The presence of community centers or

shared connections, or other centralized

points of access is an alternative or a means

to “evolve” demand by building interest and

usage ahead of large investment. If planned

correctly – aligning programs for training

users and maintenance of centers, cafes, etc.

along with a comprehensive program that

involved education, targeted investment,

development of local content and other

inputs, could be a scenario for building use-

cases in Fiji. These steps seem critical in

demonstrating that investment can show a

return to private investors.



Holistic Approach - Broadband as an

Element of Comprehensive National

Strategies (Korea, Singapore)

Due in large part to the high cost of

deploying advanced networks, thus far the

most extensive examples of broadband

investment have occurred through strong

government involvement. Governments that

have taken an aggressively pro-ICT approach

like Singapore and Korea are motivated

largely for economic reasons: to encourage

foreign direct investment and to realize

multiple benefits from transforming their

economies to technological, information-

based ones. It is difficult to show empirically,

particularly through regression analyses that

these government ICT policies have led to a

sustained level of FDI, but solid evidence

suggests that these governments have had

success following holistic approaches to

broadband policy.

Singapore, the world’s leading island in

broadband penetration has aggressively

promoted the deployment of new

technologies and broadband access through

many initiatives. Due to Singapore’s lack of

natural resources, the government has

pursued an international-oriented business

focus for a number of years (Lim, 2006).

Service-based competition, speeds up to one

Gigabit per second and affordable pricing are

all attributes Singapore broadband.

In the case of Korea, the government’s

overarching ICT objective to create an

information society has been marked by its

strong and continually renewed commitment

from the ground up. The results have been

remarkable: just over a decade after the

announcement and implementation of its

initial ICT plan, the country now ranks at or

near the top of almost any global-level

survey measuring broadband use, uptake, or

readiness, or of ICT penetration. (Pereira,

Fife 2009). The picture is perhaps more

complex however—despite supply-side

advantages which include government

subsidies and a number of programs, other

factors additionally may play a role- platform

competition, high educational levels, and

macroeconomic credit stimulation were also

elements that may have affected outcomes

(Kalba, 2013)

Korea’s focus on promoting information and

communication technologies began in the

mid-1990s, with the establishment of the

Ministry of Information and Communication

(MIC) in 1994, and the announcement of its

overall broadband strategy, the Korea

Information Infrastructure (KII) in 1995.

Korea’s broadband market is currently an

open market, free of regulation and controls

over licensing and pricing and its incumbent

telecom provider, Korea Telecom, has been

completely privatized for the last 10 years

(Lee, 2004).

An aim of the Korean initiative was to

stimulate private sector investment and

competition in the broadband market, by

lowering the regulatory barriers to entry. A

second aspect of the initiative was for the

Government to provide a high-speed

network that would serve as a public

backbone, providing broadband services to

30,000 government and non-profit

organizations, as well as to research

institutes and to around 10,000 schools. The

government other ambitious goal: to provide

high-speed internet to every household in

Korea has nearly become reality, and the



government’s targeted internet speed

(threshold) is continually revised upward

(Pereira, Fife, 2009).

Although Fiji’s is a radically different place

from Singapore or Korea, and it is often

argued that the transferability of lessons to

the small island states is not possible, in fact,

some elements in both “success” cases seem

relevant: training and education initiatives to

spur development of an information society,

increasing competition, developing public

services, demonstration cases to identify

benefits. In the case of Singapore, they began

their efforts with TradeNet a service that

facilitates trade documentation online,

processes 99% of all trade permit

declarations, and is used by over 2,400

companies. This service has reduced

processing time from several days to five

minutes. The demonstration of positive

effects was a base to build further services.

Regional Cooperation

Many suggest that a common regulatory

framework would reduce costs and provide

greater stability for private investment.

External expertise could be coordinated and

regulatory experts and others would be

spread less thin (Hudson, 2009). The

organization of the Caribbean small islands,

ECTEL, the Organization of Eastern

Caribbean States for instance has a common

regulatory framework. There are of course

significant differences between the Pacific

and the Caribbean Islands which are closer

together geographically and to a large extent

have a similar colonial heritage based on the

British system.

The UNDP (2008) has also noted the value of

cooperative models given the great variety

of cooperative forums and agreements, as

well as education and other capacity-building

institutions—in addition to the need to build

“critical mass” in terms of expertise.

However, there is not yet an overarching

institution that could coordinate such

activity at the moment. In the Pacific Islands

the Pacific Islands Forum has developed a

regional digital strategy, although

cooperative activity in ICT’s appears limited

at this point (2010, Pacific Islands Forum).

In the process of our study we asked many

individuals from NGOs, the private sector

and government about the prospects for

regional cooperation. The dominant

experience is that collaboration and

cooperation is a challenge in the Pacific given

the differences in markets, populations and

governments. In the near term observers

universally regarded a regional/sub-regional

cooperative model for regulation and

infrastructure sharing as not likely. The

Pacific Regulatory Resource Center (PiRRC)

housed on the University of South Pacific

campus is however an example of a shared

resource – this central regulatory point for

the Pacific is based in Fiji and is a regional

resource for Pacific island countries

undertaking reforms of their ICT and

telecommunications sectors. It carries out

periodic reviews of sector performance,

issues best practice statements on

telecommunications regulation, and provides

technical support to regulators and policy

makers of Pacific Island member countries.

Although market-based regional

cooperation, infrastructure sharing and a

common regulatory regime are not yet

features of the Pacific Islands, the rationale

for a supranational authority makes sense to

many as a mutually beneficial goal for the

future.



Part 7. Broadband Attributes in Emerging Markets

A scan of the research on “Small Island

Developing States” (SIDS) suggests that

small island states represent a special class of

broadband market and many of the “lessons

learned” from larger economies are not

entirely transferable, even in a scaled down

version. On the other hand, the reverse

situation may not hold as lessons learned

from small states could be ramped up to a

larger scale, or prove instructive for some

portion of a larger market (Sutherland,

2009).

A few countries with high levels of Internet

usage, but not high fixed broadband usage

(e.g. Albania) may have demand-side

obstacles such as high priced services or

supply side obstacles such as insufficient

broadband availability or some combination

of factors that are holding back broadband

penetration.

Given the range of experiences and

situations, there would be great value if

regulators, governments and non-

governmental organizations increased the

value of knowledge sharing. Either through

meetings or online mediated discussion with

documents and case studies available for

both academics and practitioners to access

this would seem to be of mutual benefit.



What Drives Broadband in Emerging Markets?

There are common views of what factors underlie broadband adoption in emerging markets—

youth interest in mobile, income disparities, leapfrogging technology, and so on. Based on an

analysis of middle-income countries (GDP/capita of $2500 to $10,000) with high fixed and

mobile broadband penetration levels, these views turn out to be mostly stereotypes.

So what factors contribute to high broadband take-up?

Compact Countries

Eight of the ten countries with the highest fixed broadband (FBB) penetration levels (ITU 2010

data) were relatively compact countries, including four small island-based nations. The same for

the mobile broadband (MBB) leaders, although only one small island country appeared on this

list. Almost all of these countries had high population densities. The implication is that relatively

small countries can generally deploy broadband more rapidly than large ones—at lower unit

costs.

Role of Income

Relatively wealthy emerging economies like Botswana, Costa Rica, Gabon, and Lebanon do not

appear on either list. Eight of the ten that do (both lists) had incomes below $7600/capita.

Possibly distribution of income is a more important factor, as the former countries reflect

relatively high inequality whereas most of the FBB and MBB leaders are relatively egalitarian,

as reflected in their Gini coefficients. In addition, there are studies that have noted the higher

correlation of educational attainment with broadband penetration than income.

Regional Effects

There may also be some regional effects. Most of the FBB leaders fall into two clusters of

countries—an East European cluster (Belarus, Bulgaria, Romania, Serbia) and a Caribbean

cluster (Dominica, Granada, St. Lucia, St. Vincent and the Grenadines). Half of the MBB leaders

also fall into an East European cluster. This regional factor may reflect the influence of

neighboring countries on each other in fostering broadband development and/or of the nearby

more developed ones, namely western Europe and North America, respectively.

The Age Factor

The FBB and MBB leaders with relative equality of income are also the ones with older

populations—namely, the Eastern European cluster, all of which have median ages between 35

and 42; conversely, the countries with more vertical income structures generally have younger

populations (median ages 25 to 32). Yet most emerging markets have with large young

populations as well as relatively vertical income structures. This suggests that they will face

challenges in achieving high broadband penetration levels unless service becomes available on a



prepaid basis, which is more likely to occur in the mobile context.

Fixed-Mobile Interdependence?

Most of the countries with the highest MBB penetration levels also have high fixed penetration

levels. This calls into question the concept that mobile broadband thrives where there is the

least amount of fixed infrastructure and service availability. At a minimum it suggests that there

are two paths to mobile broadband growth, one that is linked to FBB development (and, at least

indirectly, to fixed telephone penetration) and the other that is independent of significant fixed-

line availability and use.

Role of Competition (FBB)

So what is driving fixed broadband in countries such as Dominica, Grenada and St. Lucia, which

rank at or near the top of the emerging markets pyramid of fixed broadband use? In addition to

compact size, competition is a notable factor, as both an incumbent telecom operator (Cable &

Wireless) and a private cable TV company offer broadband services in these markets. In the

case of Grenada, the cable operator (operating as Flow) offers a Triple Play service

(“watch.talk.click”) that includes Internet access at speeds up to 12 mbps for about $65 per

month, less than half the price charged four years earlier when the transmission rate was almost

an order of magnitude lower. In other words, competition is working.

Services Prices

Simultaneously, the $65 monthly price represents more than 3% of the pre-tax income of an

average household of four persons in Grenada or St. Lucia. Moreover, there is a limited number

of such “average” households in a population that includes smaller households of retired or

semi-retired expats, larger ones with more children and fewer cash-deriving workers, and a

growing number of single-person households. Until the price drops by another 50% or more,

broadband subscriber growth rates are likely to remain lower in the Caribbean markets than in

their East European counterparts, as has been evident in recent years.

Role of Competition (MBB)

On the mobile side competition has also been a very significant factor in the region. With

prepaid service available in small denominations, income has been much less of a “hurdle” in this

communications service market. Yet mobile broadband service has only recently appeared, if at

all, on many of the islands, including those of the east Caribbean to which the four fixed

broadband leaders belong to. In fact, MBB has (3G service) has been supplied by only one

operator or not at all in the Caribbean island nations that are FBB penetration leaders; by

contrast, in the Eastern Europe markets that appear on the top MBB penetration list there are

two or more (usually three) 3G operators.



Implications for Fiji

The findings outlined above pose at least two implications for Fiji. Given the more rapid

adoption of MBB in Fiji compared to FBB, the question of the sustainability of this uni-modal

broadband development approach should be examined. Are the initial MBB subscribers “early

adopters” or do they represent a high-income group of limited size—and why is FBB growth in

the SME sector, where the population can learn useful broadband-related skills, not more

robust?

Secondly, the issue of FBB competition should be addressed, with the aim of introducing an

alternative to the incumbent carrier and thereby stimulating overall FBB rollout and service

price reductions. The alternatives in this context include cable TV-based FBB services, a fixed

wireless operator, and provision of FBB connections by one or more of the mobile operators.

The challenge rests in finding a solution that can apply across most of Fiji’s 100+ inhabited

islands, as a more complex multi-technology approach may limit price reductions.

*Prepared by Dr. Kas Kalba, President of Kalba International, Inc., telecommunications sector

advisors, and author of Broadband Leadership in Emerging Markets, December 2012.



Part 8. Conclusions

Broadband provides access to a wide range

of content and services, such as education

and health, but is also important for social

networking--connecting islanders to those

who have migrated or who are temporarily

working elsewhere and to the associated

flows of remittances (5% in Fiji as a percent

of GDP in 2008, World Bank). Furthermore,

broadband plays important roles in key

economic sectors – enabling financial

services and supporting tourism and

transport. Certain aspects of implementation

are easier with a small geography, small

government and yet numerous challenges

have been described here in terms of

identifying and scaling down technologies

appropriately, identifying need and

affordability, constraints on use, and

regulatory challenges given the limits of the

market “frontier” which cannot support

multiple players. With business models as

with broadband plans – one size does not fit

all – encompassing goals are the optimistic

starting point from which a Fiji specific plan

can evolve. In studying “the case for BB in

Fiji” it seems clear that demand needs to be

cultivated and measured. In addition, strong

measures seem called for to establish the

government’s capacity to take advantage of

Fiji’s existing BB endowments and create the

Fiji’s version of its “information society.”

A. Business Models for Micro-Broadband Markets: Build from the “Local Why?” Relevance

One of the principal questions this report set

out to explore are the possibilities for

feasible business models to expand the reach

of broadband in a small market like Fiji. As

noted by many, Fiji has potential that has not

yet been exploited to tie in more effectively



to the global economy through developing its

status as a communications/transport/hub.

Building the business need along with the

network to support it is a gradual strategy

that could then be extended to the difficult

to serve customers. Markets such as Macau

and the Canary Islands for instance, have

implemented broadband to support business

needs that resulted in a subsidiary benefit for

the entire population. This is a different

approach than that taken by markets like

Japan and South Korea that have pursued

ubiquitous transformation. A more tailored

approach given existing constraints in

information, customer-base, and other

challenges seems more reasonable. We

suggest a unique vision for Fiji’s own version

of an information society be cultivated.

B. How Can Demand Be Supported?

As is the case in other rural markets, building

demand requires building the user base

effectively through champions, programs,

technical training, access (telecentres), and a

level of engagement that reaches people to

motivate use and allows for informed

delivery of what is needed and how interests

can be met at the community level.

Telecentres can be considered a “bottom-up”

approach that provides access and basic

telephony services; although often maligned;

the telecentre approach seems a useful tool

in the case of Fiji. Subsidized by the

government and thoughtfully introduced,

this could be an economical tool to drive

usage.

C. Who Will Pay for the Network?

Expansion of broadband in Fiji seems most

likely to be driven by government with

support from external donors. Beyond the

initial network implementation, operational

costs need to be covered – through the

development of services that will drive usage

is the most straightforward path. Thus, the

sustainable use case needs support and

development.

D. What Are the Lessons from Fiji?

Given that 56% of the worldwide emerging

market population lives in rural areas (Egyedi

& Mehos, 2012) the questions around

bringing access to rural Fiji have general

relevance. Without government

subsidization and financial incentives, rural

service provision, mobile and fixed) is not

profitable for carriers. Yet, when rural

coverage exists, the socio-economic benefit

on rural communities is positive (Samuel et

al. 2005). The local context of rural

infrastructure also means issues like network

maintenance and lack of electrical power. A

maintenance strategy needs to be developed

in tandem with the rural network

deployment, such as a remote monitoring

and maintenance station and provision for

timely repairs (Egyedi & Mehos, 2012)

Lessons from Fiji that are generally

applicable include the following:

Societal

- Involve communities to build demand

and ensure that services and needs are

aligned (development of participatory

practices and approaches)

- ICT training and education at all levels of

society to support usage, innovation and

buy-in



- stakeholder representation and

organization- external inputs and

community development

Institutional

- Strengthening of an independent

telecom/ICT regulators so stakeholders

can be organized and plans implemented

- Development of consultation processes

- Development of mechanisms to

effectively make use of skills and

resources offered by external

organizations

Economic

- Put resources to measuring (gathering

statistical data) and assessing for greater

certainty in policy development and

growth assessments

- Target obvious sectors that need

broadband and can support a national

business model

Technology

- Pursue evolutionary introduction of

technology and multiple broadband

technologies – build in line with demand

PTC Broadband Reports, Number 2

The second PTC Broadband Report will

continue to build from our growing

community of practice and will apply a multi-

disciplinary set of tools and expertise to

another market in the Asia Pacific. A diverse

group of scholars and practitioners has been

assembled through the exercise of this

research paper; wiki discussions, fieldwork,

interviews. The outreach around these

activities has created a loose network that

will be further activated in our second

project.



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Part 10. Appendices

Appendix 1. PTC Expert Survey Results

A short expert survey was administered to

invited participants in the PTC and

practitioners, academics and government

officials in Fiji. The 20 respondents include

representation from NGOs, industry,

consultants, non-profits. Seventy-five

percent of those answering the survey

participated in follow-up interviews for

further discussion of their views. Since much

of the data needed to understand the market

potential for broadband expansion in Fiji is

difficult to acquire, we endeavored to

capture the state of thinking on Fiji’s

potential from sources that fit our criteria for

reliability [direct and recent experience in

the telecom market of Fiji, recommendations

from other experts, and individuals directly

involved in the drafting and execution of the

Fiji Broadband Plan]. Summary results are

shown below:

To what extent do you think these items are needed so that Fiji can proceed with its National

Broadband Plan? (percent agreeing to a great extent/some extent)



To what extent are the following items Fiji needs to address to be Broadband-ready? (percent

agreeing/strongly agreeing)

To what extent are the following promising targets for building BB demand in Fiji? (percent

agreeing to a great extent/some extent)



What in your opinion is the best way a broadband platform in Fiji can be realized? (percent

agreeing to a great extent/some extent)

How much do you estimate that people will be willing to spend on broadband per month? (in Fiji

dollars)



What is your projection for Fiji’s broadband market for the next 5 years? Growth will be:



Appendix 2. Decision Tree and Broadband in a Broader Context An example of how decision trees can be

used to support decision-making has been

presented by Robert Horton in his ITU

discussion paper (Horton, GSR11) and are

recreated below. As noted in our report a

decision tree uses a tree-like model to depict

decision pathways and possible outcomes.

A Decision Tree has three types of nodes:

• decision nodes (represented by squares)

• chance nodes (represented by circles)

• end nodes (represented by triangles)

The squares represent the focus of a

fundamental decision to be made. The

triangles provide the set of options or

solutions that are available to the decision

maker. The circles usually sit between the

squares and the triangles and they introduce

a probability (where appropriate) to assist a

decision maker in illustrating a chance event.

For example the results of a coin toss can be

demonstrated with a chance node.

In applying this concept to the creation of a

National Broadband Plan, the effort can be

captured by at least 6 levels of decision

nodes. This is shown in Figure A, which sets

out the tree.

The decision tree is shown in a simple form

because the subjective probabilities

associated with any chance node will vary

from country to country and are influenced

by many variables.



Figure A. Decision Tree

Six Levels of Decision Points Decision required

1.FOUNDATION : initial

broadest consideration and

consultation

b

2.GOALS & TARGETS

3.INSTITUTIONAL FORM OF

REGULATION

4.REGULATORY SUPPORT

MECHANISMS &

INITIATIVES

5.INFRASTRUCTURE

INVESTMENT

Decision node

End node

6.INDUSTRY STRUCTURE



The levels of decision nodes to be addressed are:

1. Foundation: the initial consideration and consultation which informs and engages broad

stakeholder involvement in creating the broadband vision of the future

2. Goals and targets: These should not be set lightly or slavishly. They can appear deceptively

simple but to be set properly they require comprehensive understanding and application

of several dimensions, together with an appropriate definition of “Broadband”.

3. Institutional form of regulation: This relates to the form of the regulator, and its

responsibilities e.g. independent, converged, integrated, industry specific.

4. Regulatory support mechanisms and initiatives: Which are relevant to enabling the best and

practicable solutions for a particular country in order to successfully achieve the vision and

outcomes. The culture and attitude of the regulator are important.

5. Infrastructure Investment: Measures to assist and encourage industry and service

development e.g. direct investment by government, private industry investment, and PPP

schemes.

6. Industry Structure: The philosophical approach to the ultimate industry structure needed,

or that which is already achieved and which best serves the needs of the Broadband Plan.

In ascending the tree, there need not be strict adherence to the numerical sequence of decision

nodes. Indeed, many countries have followed a varying sequence. However, Levels 1 and 2 would

be the most efficient and logical starting sequence as well as the lowest risk for a well-informed

national plan.

Whilst the end nodes depicted on the diagram represent the nominal range of options available to

a country at the decision point level, there can in some cases be a combination of options. At each

level there is the experience of at least several countries to turn to for formative thinking.

Examples of the options faced by national decision makers at each level of the Decision Tree are

given in the following Figures B-G.



Figure B. FOUNDATION, LEVEL 1

Degree of consultation

… plus cost-benefit analysis

Figure C. GOALS AND TARGETS, LEVEL 2

Types of goals and targets

De

peak speed,

penetration

subdivided or

dual targets

actual speed,

penetration,

pricing

application

driven

Within

Ministry

broader

Government

Industry Public, users



Figure D. REGULATION, LEVEL 3

Institutional form of Regulation

De

Figure E. REGULATORY SUPPORT, LEVEL 4

Regulatory support mechanisms

Ministry or

Department

Independent Convergent Integrated

prescriptive

-technology -structure

open -technology -structure

supportive -spectrum -access rights -UAS

forebearing -incentives -partnerships -UAS



Figure F. INFRASTRUCTURE INVESTMENT, LEVEL 5

Infrastructure investment choices

De

Figure G. INDUSTRY STRUCTURE, LEVEL 6

Industry structure envisaged

De

direct govt

investment

targeted govt

investment

public-private

partnership

private

investment

monopoly

provision

oligopoly

provision

open service

competition

open platform

and service

competition



Appendix 3. Broadband Plan – Institutional Arrangements, Process and Targets

Current publications state that general coordination is to take place through the Ministry of

Communications, and a “Broadband Policy and Programme Committee” will oversee the policy,

plan and program implementation. Members are designated from private industry, the Ministry,

TAF, and elsewhere (National Broadband Policy, Oct. 13, 2011). This committee has not yet been

established. Nine targets are listed in the Fiji government’s action plan:

1. competition and access

2. community access (all communities over 250 people)

3. individual access

4. affordability

5. community access (community broadband centres) – CBC

6. broadband penetration

7. school access

8. transactions with government

9. lead applications in government programs (health, education, tourism, agriculture/fishing)



Appendix 4. Telecom Service Providers The major owner of telecom operators in Fiji

is The ATH Group, Amalgamated Telecom

Holding Limited. From its web site

(www.ath.com.fj):

ATH was incorporated as a public company

on 10 March 1998 under the Companies Act

1983, and commenced operations on 16

December of the same year. It was set up to

consolidate and manage Government's

investments in the telecommunications

sector as part of the public sector reform

programme.

Following an international bidding process

conducted by the international investment

bank, Credit Suisse First Boston, the

Government sold its 49% strategic stake in

ATH to the Fiji National Provident Fund

('FNPF') in November 1998. The FNPF

acquired an additional 2% of the issued

shares from Government in September 1999

in accordance with a Sale and Purchase

Agreement entered into in November 1998.

It reduced Government's shareholding in

ATH, at that point, to 49%. In early 2002,

Government further reduced its

shareholding through two tranches. It sold

9.7% of the issued shares through private

placement to six institutions in January

2002. A further 4.7% was sold through a

Public Offer in March, in which over 1,000

investors participated. The Government

currently owns 34.6% of the issued shares of

ATH while the FNPF has increased its

shareholding to 58.2%.

Fiji’s government institutions are connected

to the profitability of the dominant

operators. The major ATH businesses are

listed below.

Company Business Web Site

Connect ISP www.connect.com.fj

Fiji Directories Limited Directories www.yellowpages.com.fj

Telecom Fiji Ltd. (TFL)

Telecom Fiji Limited (TFL) is the sole provider of

local and national (trunk) telephony services, and

owns the only public switched telephone network

in Fiji. The TFL network consists of 55 telephone

exchanges throughout Fiji and Rotuma,

connecting more than 101,000 customers.

www.telecomfiji.com.fj

TFL Shop Retail sales

TransTel

TransTel Limited is a privately held Fiji company

that processes financial transactions over

telecommunications networks. The company also

manages and maintains Fiji’s public phone service

facilities

www.transtel.com.fj

Xceed Customer Premises Equipment www.xceed.com.fj

Vodafone Fiji Dominant mobile operator www.vodafone.com.fj



Appendix 5. Structure of Communications Market in Fiji

Wireline Market Overview:

The fixed line market in Fiji was expanding

until 2009, when it reached a peaked of

144,500 covering 86.5% of the population

seen in Table 1. In the last 3 years, however,

the number of lines has decreased by almost

10%; a trend that is continuing in a

downward direction. Another interesting

trend seen in Table 2 is the high increase in

the number of landlines between 2007 and

2009 after years of stagnation, which can be

explained by the de-regulation of the sector

after the Telecommunications Act of 2007

and the consequent drop in prices that

occurred.

Table 1. Annual number, growth and household penetration of fixed lines in Fiji

Year Total lines (PSTN) Growth (%) H’hold pen (%)

2005 107,000 1.9% 67.9%

2006 108,362 1.3% 67.4%

2007 121,800 12.4% 74.8%

2008 129,100 6.0% 78.2%

2009 144,500 11.9% 86.5%

2010 140,000 -3.1% 82.7%

2011 130,000 -7.1% 76.7%

Source: TeleGeography

The wireline market continues to be

dominated by Telecom Fiji (TFL) even after

the Telecommunications Act of 2007. More

than ten companies have tried to enter the

market since 2007, but their share has never

surpassed 5%. TFL continues to be the de

facto monopoly and it doesn’t seem to be

affected by the new deregulatory

environment (TeleGeography). Furthermore,

the market as shown, is not growing which

makes it even more difficult for new

companies to enter.

Table 2. Annual number of subscribers with fixed lines in Fiji

Provider 2006 2007 2008 2009 2010 2011

TFL 108,362 121,800 129,100 140,500 140,862 129,845




Wireless Market Overview:

In 2006, as Table 3 shows, Fiji’s mobile

wireless business serviced only 32.1% of the

population. In 2011, 5 years later, the

number had increased by almost 150% to

754,735 meaning 84.8% of Fiji’s population

theoretically now has a cell phone (although

this figure does not account for those with

multiple phones). The increase in the number

of mobile lines was the result of several

trends like cheaper devices, but the main

increase in the number of lines occurred

between 2007 and 2008, when after the

Telecommunications Act was approved and

the monopoly in Fiji ended, prices went

sharply down, making it more affordable for

people to actually own a mobile device

(Hudson). Furthermore, most people in Fiji

have 2G network phones with 3G accounting

for only a small part of the lines (3G still

doesn’t represent more than 7% of the

number of lines).

Table 3. Annual number, growth and household penetration of mobile lines in Fiji

Year Total Growth (%) Pop. Pen. (%) 3G 3G Growth (%)

2006 277,125 35.8 32.1 0

2007 379,600 37.0 43.7 0

2008 742,850 95.7 84.7 1,000

2009 762,480 2.6 86.4 7,000 600.0

2010 692,122 -9.2 77.8 17,500 150.0

2011 754,735 9.0 84.8 50,000 185.7


The wireless market in Fiji is dominated by

Vodafone Fiji, a joint venture between

Vodafone and TFL. This venture started in

1994 as a monopoly until 2007 the

Telecommunications Act ended their

monopoly. In 2008, Digicel a multinational

with wireless operations in the Caribbean

entered the market, however by 2010,

almost 2 years after entering the market,

Digicel had less than 10% of the market

share. In the last year and a half Digicel has

increased its market share to 15%, Vodafone

Fiji has a near monopoly with 85% of all

subscribers. The goal of the

Telecommunications Act of 2007 was to

promote competition but for the mobile

business, even though, it increased

competition by adding a new player, it hasn’t

ended the monopoly power of the

incumbent.



Broadband Market Overview:

The Internet market in Fiji is small, only

14.4% of all households have connections (in

24,300 households) as shown in Table 6.

Most connections are not broadband, with

DSL representing a small part of those total

users. Growth has decreased in the last 2

years, from an average of 35.7% annual

growth from 2007 to 2009 to 4.5% in 2011.

Again, the initial growth beginning in 2007

was the product of the deregulation, but it

seems that growth has now stalled.

Table 4. Annual number, growth and household penetration of broadband in Fiji

Year Total Growth (%) H’hold Pen (%) DSL

2006 8,500 21.4 5.3

2007 11,500 35.3 7.1

2008 15,600 35.7 9.4 380

2009 21,000 34.6 12.6 500

2010 23,250 10.7 13.7 1,800

2011 24,300 4.5 14.4 1,850


In the Internet market, the two main players

are TFL and Unwired Fiji. Similar to other

markets, TFL dominated until 2007, when

the Telecommunications Act ended their

monopoly. Since then, several other

companies have entered the market,

including ISPs and other service providers.

Most haven’t been successful with the

notable exception of Unwired Fiji, which has

a 10% market share, and uses WiMAX.

Competition has been prevented by the fact

that TFL controls the only submarine cable

that connects Fiji to the Internet and they

have decided to maintain high prices in order

to connect their competitors to the cable.

Even though the Telecommunications Act

tried to prevent this, it was delayed in the

interim, and not until 2010 did the regulators

decide to take action and order TFL to lower

interconnection prices. Furthermore, in

2011, after the creation of TAF, they were

able to create the regulations mandated by

the Telecommunications Act to manage the

rules on capacity leasing and interconnection

to the submarine cable. Unwired Fiji was the

only company that was able to successfully

enter the market in a meaningful way despite

all the barriers that TFL tried to establish to

prevent them from entering. Part of their

success is because they provide service

through WiMAX. TFL continues to have over

80% of the market share and it has actually

increased its market share in the past couple

of years as shown below in Table 5.



Table 5. Annual Market Share for Internet Service in Fiji

Provider Sep

2010

Dec

2010

Mar

2011

Jun

2011

Sep

2011

Dec

2011

Telecom Fiji

(TFL) 73.4% 77.4% 78.4% 81.9% 81.4% 81.3%

Unwired Fiji 8.6% 10.3% 10.6% 10.9% 10.7% 10.9%




Appendix 6. Interview List

Ronald Box, CEO, Telecom Regulatory Authority, Fiji (interview Dec. 8, 2011)

Muhammad Aslam Hayat, Director, PiRRC, Pacific ICT Regulatory Resource Centre (interview

Oct. 2012)

Shivnesh Prasad, Regulator, Fiji (interview Nov. 7, 2012)

Chris Vonwiller, Entrepreneur, Board Member Appen Butler Hill (interview April 23, 2012)

Chaminda Senewiratne, Head of Data and Broadband Services, Vodafone Fiji Ltd. (interview Nov.

3 2012)

Anjeela Jokan, Dean, Science and Technology, U. of South Pacific [call Oct. 26, 2012]

Jim Holmes, Director, Incyte Consulting (contributor to Fiji Broadband Plan, 2011) (interview May

12, 2012, editorial commentary provided, Feb. 23, 2013)

Darrell Owen, development and ICTs consultant (interview March 2011)

Salanieta Tamanikaiwaimaro, activist (interview May 18, May 19, 2012)

Bob Lyon, Chairman Fiji Development Bank, former Chairman FINTEL (interview June 18, 2012)

Mike Usmar, CEO, Computer Clubhouse, New Zealand (email comments)

John Turnbull, Sales Director, O3b (interview Dec. 4 and 5, 2012)

Ioane N. Koroivuki, Chief Executive, Fintel (interviewed July 18, 2012)



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