Broadband Developments in the South Pacific

The Australian Government together with Telstra have made a $2 billion offer for the Digicel telco assets in the South Pacific.  The Irish company is one of the largest mobile operators in island nations in both the Caribbean and the South Pacific. It is facing financial difficulties because of the drop in revenues from tourists that would normally visit these islands. China has shown interest in buying the assets in the South Pacific and the Australian Government is keen to block that. For that purpose, it has offered $1.5 billion to assist Telstra in buying these assets. At this point it is still uncertain if Digicel accepts the offer.

Australia has a special relationship with our South Pacific neighbours, and we have a responsibility to collaborate with them and assist them, especially also in the fields of information technology and telecommunications. Therefore, I would like to share this information with you that BuddeComm has prepared for this region.

It is good to see that the demand for data-based services in the Pacific region is also growing, aligning with similar trends around the world. In particular, the demand for mobile broadband is increasing due to mobile services being the primary and most wide-spread source for internet access across the region.

Mobile technology will play a pivotal role in the digital transformation of the Pacific Islands by giving the population access to services such as e-government, health, and education. Mobile technology will also act as a catalyst for innovation and economic growth.

The three largest countries in terms of population include Papua New Guinea, Fiji, and Solomon Islands. While Papua New Guinea has the largest population by far, it provides opportunities for significant growth considering its mobile penetration is still low, at just over 30%. However, there are challenges to be overcome before significant growth can occur.

Internet penetration in the region is among the lowest in the world. However, an increase in international connectivity will improve penetration, coupled with an increase in 4G connections.

While there are many local operators, there are also regional players including Digicel, which has operated in the Pacific for some years. Recently, the Fiji-based Amalgamated Telecom Holdings (ATH) has expanded regionally, completing a few acquisitions.

International organisations such as United Nations, the World Bank, and the Asian Development Bank have taken a special interest in seeing the general living conditions as well as communication services improve in the Pacific region. It is well recognised that access to broadband services can vastly improve the economic and social conditions in these emerging markets, many of which are prone to natural disasters and rising sea levels.

This week I cover the three largest countries, next week some of the smaller islands will be discussed.

Papua New Guinea

Fixed-line teledensity in Papua New Guinea has seen little change over the past two decades. Progress in the country’s telecom sector has come primarily from mobile networks, where accessibility has expanded considerably in recent years, with population coverage increasing from less than 3% in 2006 to more than 90% by early 2021. The two MNOs operate networks offering services based on GSM, 3G and LTE, depending on location. GSM is prevalent in many rural and remote areas, while 3G and LTE are centred more on urban areas.

The Kacific-1 satellite, launched in December 2019, has greatly improved the reach of telecom services in PNG (as well as in the Solomon Islands).

Network deployment costs are high, partly due to the relatively low subscriber base, the impervious terrain, and the high proportion of the population living in rural areas. As a result, fixed telecom infrastructure is almost non-existent outside urban centres, leaving most of the population un-serviced. PNG is the Pacific region’s largest poorly developed telecom market, with only around 22% of its nearly 8.8 million people connected to the internet.

The existing submarine cable infrastructure is no longer adequate to serve the country’s needs. Low international capacity has meant that internet services are expensive and slow. Internet access has improved, however, with the Coral Sea Cable System which came online in 2019. The cable links PNG to the Solomon Islands and Australia, see below.

Solomon Islands.

Telecommunication infrastructure in the Solomon Islands requires significant investment due to the geographical make-up of the islands. Although various international organisations such as the World Bank and the Asian Development Bank have taken a special interest in having communication services improved in both the Solomon Islands and the Pacific region in general, internet and broadband penetration remain low. The provision of broadband infrastructure, particularly to rural areas, is also hindered by land disputes.

Internet services have, however, improved with the build-out of the Coral Sea Cable System linking Papua New Guinea to the Solomon Islands, as also with a connecting cable to a landing station at Sydney. The Australian government provided most of the funding for the Coral Sea Cable System, with contributions and support from the Solomon Islands and Papua New Guinea governments.

In recent years, the country has stabilised both politically and economically and this, along with improvements to mobile infrastructure, has led to a rise in mobile penetration and the slow uptake of broadband services. While the first LTE services were launched in late 2017 in the capital Honiara, the main platform for mobile voice and data services remains 3G, while in outlying areas GSM is still an important technology for the provision of services.

Fiji

Fiji has a relatively sophisticated communications infrastructure with the highest mobile and internet penetration in the Pacific Islands. It is the leading market to watch in terms of both LTE and 5G development in this region.

The Fijian mobile operators, including Digicel Fiji and Vodafone Fiji, continue to invest in LTE and LTE-A technologies, and these networks now account for the largest share of mobile connections. Concentrating on the more highly populated areas, the operators are preparing for the next growth area of mobile data. The operators also have 5G in mind and are preparing the networks to be 5G ready.

Fiji presents a challenging geographic environment for infrastructure developments generally, due to its population being spread across more than 100 islands. However, most Fijians live on the two main islands of Viti Levu and Vanua Levu.

In July 2018, the two islands were linked by the Savusavu submarine cable system, which provides a more secure link between the two islands in times of emergency weather events such as the regular tropical cyclones which often cause much destruction to this area. These natural disasters often destroy essential infrastructure including electricity and telecoms equipment.

New Caledonia

The telecom sector is dominated by OPT-NC, which holds a monopoly and provides fixed and mobile voice services, mobile internet, fixed broadband access, and wholesale services for other ISPs.

The country is well serviced by extensive 3G and LTE networks and is considered to have one of the highest smartphone adoption rates in the Pacific region.

While DSL is still the dominant fixed broadband technology, OP-NC is also deploying a nationwide FttP network. Fibre subscriber number had increased to over 20,000 by end-2020, with 32,800 homes passed.

French Polynesia

With improved international connectivity, fixed broadband penetration has become among the highest in the region. A considerable number of consumers access FttP-based services. With the first data centre in French Polynesia on the cards, the quality and price of broadband services will improve as content will be able to be cached locally, reducing costs for consumers.

About 43% of the country’s mobile connections are on 3G networks, while LTE accounts for 12%. By 2025, LTE is expected to account for more than half of all connections. It is estimated that 77% of mobile subscribers will have smart phones by 2025.

Timor Este

Timor-Leste has been moving forward with the regeneration of its economy and rebuilding key infrastructure, including telecommunications networks, that were destroyed during the years of civil unrest.

Fixed-line and fixed broadband penetration in Timor-Leste remains extremely low, mainly due to the limited fixed-line infrastructure and the proliferation of mobile connectivity. The number of subscribers through to 2026 is expected to develop steadily, though from a low base.

The country has three telecom service providers who jointly achieved a 98% network coverage nationally. All three major mobile operators – Timor Telecom, Telkomcel and Telemor – launched LTE services during 2019.

Last week the Timor Leste government announced it will issue a public tender for the purchase and installation of a fibre optic submarine cable connection from capital Dili to Darwin and Port Hedland. Costs are estimated between US$40 and $60m. The project could be completed in September 2022. The cable is likely to be built with Australian pledged by the Australian Government in 2019.

Vanuatu

For many years, GSM was the primary mobile technology for Vanuatu’s 300,000 people. Recent infrastructure projects have improved access technologies, with a transition to 3G and, to a limited degree, to LTE. Vanuatu has also benefitted from the ICN1 submarine cable and the launch of the Kacific-1 satellite, both of which have considerably improved access to telecom services in recent years. Vanuatu’s telecom sector is liberalised, with the two prominent mobile operators Amalgamated Telecom Holdings (operating as TVL) and Digicel Vanuatu offering effective competition.

While fixed broadband penetration remains low, the incumbent operator is slowly exchanging copper fixed lines for fibre. Several ongoing submarine cable developments will also assist in increasing data rates and reduce internet pricing in coming years.

Samoa

Samoa was one of the first Pacific Island countries to establish a regulatory infrastructure and to liberalise its telecom market. In 2006, it became the first 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.

LTE is developing on the back of its initial launch in 2016 by Digicel Samoa, followed by BlueSky Samoa (now Vodafone Samoa) in early 2017. Digicel Samoa completed its LTE network in September 2020.

Like other countries in the Pacific Islands, Samoa’s telecoms sector has been inhibited by a lack of international connectivity. While Samoa has had access to the Samoa-America-Samoa (SAS) cable laid in 2009, this cable has insufficient capacity to meet the country’s future bandwidth needs.

This issue was addressed with two new submarine cables which became available in 2018 and 2019. These, combined with the Samoa National Broadband Highway (SNBH), have improved internet data rates and reliability, and have reduced the high costs which were previously associated with internet access in Samoa.

Paul Budde