Developments in the South Pacific region include Telstra's $2 billion bid for Digicel in an effort to block China from acquiring the mobile network assets, writes Paul Budde.
LAST WEEK, we published the first part of the overview of broadband developments in the South Pacific, where we covered the three largest countries - Papua New Guinea, the Solomon Islands and Fiji.
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 also important to report on the latest development since last week. 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.
Now back to an overview of broadband developments in New Caledonia, French Polynesia, Timor-Leste, Vanuatu and Samoa.
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, OPT-NC is also deploying a nationwide FttP network. Fibre subscriber numbers had increased to over 20,000 by end 2020 with 32,800 homes passed.
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 smartphones by 2025.
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 remain 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 98% network coverage nationally. All three major mobile operators - Timor Telecom, Telkomcel and Telemor - launched LTE services during 2019.
Earlier this month, 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 U.S.$40-$60 million (AU$54.6-$82 million). The project could be completed in September 2022. The cable is likely to be built with the money pledged by the Australian Government back in 2019.
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 Kacific1 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 the coming years.
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.
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-American 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 is an Independent Australia columnist and managing director of Paul Budde Consulting, an independent telecommunications research and consultancy organisation. You can follow Paul on Twitter @PaulBudde.