Last year, we started an annual overview of the telecommunications developments in the South Pacific and this is the 2022 update that I have been able to piece together with the researchers at BuddeComm.
Last week, we discussed the effect of geopolitics on the telecommunication submarine market in the South Pacific. As mentioned, the Australian Government intervened in the Solomon Islands submarine cable infrastructure.
A second intervention was in the mobile operations in Fiji, as was in the case of the Solomons Islands after various Chinese firms registered interest in taking a stake in the country’s major mobile operator, Digicel. Telstra agreed to acquire Digicel Group’s Pacific operations for around $2.4 billion, with financial input from the Australian Government of around $1.33 billion. Digicel Pacific operates in PNG, Fiji, Nauru, Samoa, Tonga and Vanuatu and has 2.8 million subscribers.
The reason why Fiji is of strategic importance is that it has the most advanced economy and is a market leader. On the telecoms side, it is leading the region in mobile communications. The market boasts relatively sophisticated, advanced digital infrastructure, with telcos’ heavy investment resulting in the country having the highest mobile and internet penetration in the Pacific Islands region.
Long-Term Evolution (LTE), LTE-A and fibre technologies have received the most investment by the Fijian mobile operators, which include Digicel Fiji, Vodafone Fiji and Telecom Fiji. Notably, LTE now accounts for the largest share of connections in the mobile segment. LTE is a fourth generation (4G) wireless standard that provides increased network capacity and speed for mobile phones and other cellular devices.
Concentrating on the more highly populated areas, the operators are preparing for the next growth area of high-speed data. They also have 5G in mind and are preparing their networks to be 5G-ready, anticipating an easier migration to the technology based on the relatively high LTE penetration rate. The sale of Digicel to Telstra also passed a major hurdle when the Fijian Competition and Consumer Commission approved the transaction in March 2022.
In July 2018, the two islands were linked by the Savusavu submarine cable system, which provides a more secure link in times of emergency weather events such as the regular tropical cyclones that often cause massive destruction to the area, including destroying essential infrastructure such as electricity and telecommunications equipment. Notably, the December 2021 eruption of the Hunga Tonga–Hunga Ha’apai submarine volcano in Tonga damaged the Tonga Cable which connects Fiji and Tonga blocking the latter off from internet services.
Cable theft and damage to critical communications infrastructure have also become a concern in Fiji, prompting authorities to establish a joint task force to tackle the issue
Fiji was also one of the first countries in the region to launch M-Money services. Both Vodafone and Digicel operate their services, M-PAiSA and MyCash respectively. The operators’ offerings include domestic and international transfers, withdrawals and bill payments.
Operators have focused on partnerships to reach under-served populations in the island’s remote areas without access to physical bank branches. For example, since 2017, a tie-up between HFC Bank, Vodafone Fiji, the Pacific Financial Inclusion Program and ePay enables customers to transact using Vodafone’s M-PAiSA service and a number of point-of-sale kiosks that are strategically placed in these communities.
Meanwhile, in August 2021, Digicel partnered with BSP Bank to launch an internet payment gateway service to allow Digicel customers to top up their MyCash mobile wallets directly from their bank account or a Visa card.
The ubiquity of mobile coverage among the population as well as COVID-19-related disruptions to movement have also supported the growth in usage of M-Money in recent years; M-Money payments increased from around $100 million in 2016 to over $700 million in the first ten months of 2021.
Digicel Samoa
While the focus has been on Fiji, Telstra bought the assets of all of the Digicel Group’s Pacific operations. This also includes Digicel Samoa. In 2006, it became the first country in the region to see the market entrance of Digicel, which has since launched services in other Pacific nations.
The advent of competition in the mobile market saw prices fall by around 50 per cent and network coverage increase to more than 90 per cent of the population. Samoa also boasts one of the highest rates of mobile phone coverage in the Pacific region.
LTE is also here developed on the back of an initial launch of the technology in 2016 by Digicel Samoa, followed by BlueSky Samoa (now Vodafone Samoa) in 2017. Digicel Samoa completed its LTE network in September 2020. However, the growth of fixed-line internet has been impeded by factors including the high costs for bandwidth, underinvestment in fixed-line infrastructure, as well as a strained consumer profile weighing on demand for services.
On the consumer side, spending on telecom services and devices is under pressure from the financial effect of large-scale job losses and the consequent restriction on disposable incomes brought on by the outbreak of the COVID-19 pandemic. This saw mobile and broadband connections decline during 2020.
However, the crucial nature of telecom services, both for general communication as well as a tool for homeworking, helped to offset such pressures. The market has since returned to growth, supported by an economic rebound in the country. The pandemic’s impact on the long-term outlook for the market is expected to be muted.
Paul Budde
Telecommunications in the South Pacific becomes a security issue for Australia
Fiji leading Pacific economy and its importance to Australia
Last year we started an annual overview of the telecommunications developments in the South Pacific and this is the 2022 update that I have been able to piece together with the researchers at BuddeComm.
Last week (link) we discussed the effect of geopolitics on the telecommunication submarine market in the South Pacific. As mentioned, the Australian Government intervened in the Solomon Islands submarine cable infrastructure.
A second intervention was in the mobile operations in Fiji. Here as was in the case of the Solomons Islands after various Chinese firms registered interest in taking a stake in the country’s major mobile operator Digicel. Telstra agreed to acquire Digicel Group’s Pacific operations for around $1.6 billion, with a financial input from the Australian government of around $1.33 billion. Digicel Pacific operates in PNG, Fiji, Nauru, Samoa, Tonga and Vanuatu and has 2.8 million subscribers.
The reason why Fiji is of strategic importance is that it has the most advanced economy is the leading market. On the telecoms side they are leading the region in mobile communications. The market boasts relatively sophisticated, advanced digital infrastructure, with telcos’ heavy investment resulting in the country having the highest mobile and internet penetration in the Pacific Islands region.
LTE, LTE-A, and fibre technologies have received the most investment by the Fijian mobile operators, which include Digicel Fiji, Vodafone Fiji, and Telecom Fiji. Notably, LTE now accounts for the largest share of connections in the mobile segment. LTE (Long-Term Evolution) is a fourth generation (4G) wireless standard that provides increased network capacity and speed for mobile phones and other cellular devices.
Concentrating on the more highly populated areas, the operators are preparing for the next growth area of high-speed data. They also have 5G in mind and are preparing their networks to be 5G-ready, anticipating an easier migration to the technology based on the relatively high LTE penetration rate. The sale of Digicel to Telstra also passed a major hurdle when the Fijian Competition and Consumer Commission approved the transaction in March 2022.
In July 2018, the two islands were linked by the Savusavu submarine cable system, which provides a more secure link in times of emergency weather events such as the regular tropical cyclones that often cause massive destruction to the area, including destroying essential infrastructure such as electricity and telecommunications equipment. Notably, the December 2021 eruption of the Hunga Tonga–Hunga Ha’apai submarine volcano in Tonga damaged the Tonga Cable which connects Fiji, and Tonga blocking the latter off from internet services. Cable theft and damage of critical communications infrastructure has also become a concern in Fiji, prompting authorities to establish a joint taskforce to tackle the issue
Fiji was also one of the first countries in the region to launch m-money services. Both Vodafone and Digicel operate their services, M-PAiSA and MyCash respectively. The operators’ offerings include domestic and international transfers, withdrawals, and bill payments.
Operators have focused on partnerships to reach under-served populations, in the island’s remote areas, without access to physical bank branches. For example, since 2017, a tie-up between HFC Bank, Vodafone Fiji, the Pacific Financial Inclusion Program, and ePay enables customers to transact using Vodafone’s M-PAISA service and a number of Point-of-Sale kiosks that are strategically placed in these communities.
Meanwhile, in August 2021, Digicel partnered with BSP Bank to launch an Internet Payment Gateway service to allow Digicel customers to top up their MyCash mobile wallets directly from their bank account or a Visa card.
The ubiquity of mobile coverage among the population as well as Covid-19 related disruptions to movement have also supported the growth in usage of m-money in recent years; m-money payments increased from around $100 million in 2016 to over $700 million in the first ten months of 2021.
Digicel Samoa
While the focus has been on Fiji. Telstra bought the assets of all of the Digicel Group’s Pacific operations. This also includes Digicel Samoa. In 2006, it became the first country in the region to see the market entrance of Digicel, which has since launched services in other Pacific nations. The advent of competition in the mobile market saw prices fall by around 50% and network coverage increase to more than 90% of the population. Samoa also boasts one of the highest rates of mobile phone coverage in the Pacific region.
LTE is also here developed on the back of an initial launch of the technology in 2016 by Digicel Samoa, followed by BlueSky Samoa (now Vodafone Samoa) in 2017. Digicel Samoa completed its LTE network in September 2020. However, the growth of fixed-line internet has been impeded by factors including the high costs for bandwidth, underinvestment in fixed-line infrastructure, as well as a strained consumer profile weighing on demand for services.
On the consumer side, spending on telecoms services and devices is under pressure from the financial effect of large-scale job losses and the consequent restriction on disposable incomes brought on by the outbreak of the Covid-19 pandemic. This saw mobile and broadband connections decline during 2020. However, the crucial nature of telecom services, both for general communication as well as a tool for homeworking, helped to offset such pressures. The market has since returned to growth, supported by an economic rebound in the country. The pandemic’s impact on the long-term outlook for the market is expected to be muted.
Paul Budde