Markets, Monopoly, Mobile & Morals: Small Island Developing States Case Studies Michael.Minges@itu.int Opinions expressed may not reflect the views of the International Telecommunication Union or its members
Pacific Telecommunications Council 11-14 January 2004 Honolulu, Hawaii USA
Small Island Developing States (SIDS) & Telecoms “The vulnerability of SIDS are also non-natural, economic and external in nature. These are compounded by economic constraints, such as small domestic markets with small natural and human resource bases, resulting in lack of economies of scale, competitiveness, diversification and hence investment opportunities.� — Minister for Foreign Affairs & International Trade, Saint Lucia
Percentage of countries SIDS < 1.2 million population
2003 ITU Case Studies One island state from each region
Oceania: Fiji
Americas: St. Lucia
Africa: Mauritius
Asia: Maldives
Demographics - 2002 Population
Land area (km2)
GNI per Note capita US$
Fiji
819'600
18’270
Maldives
280'549
300
2’090 1’190 coral islands; 199 inhabited; 30% of population live in capital
Mauritius
1'210'485
2’040
3’850 42% urban; 97% of population on main island
St. Lucia
159’133
620
2’160 51% urban. Over 300 islands;
around 100 are inhabited. Almost 80 percent of population lives on two main islands.
3’840 38% urban; 1 island
Market environment - 2002 Operator(s) Fiji
Maldives
Mauritius
St. Lucia
Exclusivity until
Note
• Telecom Fiji 2014 (mobile subject Monopoly in each • FINTEL (49% to interpretation) market segment C&W) • Vodafone (49% Vodafone UK) • Dhiraagu (45% C&W) • MT (40% France Telecom) • Emtel
• C&W (100%)
2009 (fixed). 2nd ISP Regulator in 2003 and 2nd created in 2004 mobile in 2004. 2003 (mobile opened earlier)
Numerous licenses being issued
2001
2 new mobile licenses issued
Mobile markets • Coverage: % of population that can receive signal • Penetration: % of population that are actually subscribing • Effective penetration: % of population that subscribe adjusted for coverage • End 2002: All except Mauritius with one operator • Bottlenecks: Coverage (Maldives & Fiji), Pricing (St. Lucia), Regulatory (Mauritius (RPP)) • Moral: Coverage important
Mauritius missed opportunity Telephone subscribers per 100 inhabitants
May ’89: Emtel launches first mobile network in Southern Hemisphere. Receiving Party Pays.
Nov. ’99: Prepaid launched Mar ’96: Cellplus enters market
Moral: Competition without regulatory oversight does not always deliver expected benefits
Maldives Mobile subscribers per 100 inhabitants
1997: Analogue mobile launched
1999: Conversion to GSM
2001: Prepaid launched
Moral: Monopoly can generate high growth when aligned with government objectives
Fiji Telephone subscribers per 100 inhabitants
1994: GSM launched
1999: Prepaid launched
Moral: Right technology alone not sufficient
St. Luciaâ&#x20AC;&#x2122;s mobile history Telephone subscribers per 100 inhabitants 1992: Analogue AMPS launched as Boatphone. 1995: Primarily 300 aimed at land marine market. clients Receiving & 2 cell Party Pays sites (RPP).
1999: Prepaid & digital TDMA launched. 17 cell sites.
Moral: 2 is good, but 3 even better!
2002: CPP & SMS introduced. 2 new licenses awarded. C&W begins to subsidize handsets and other promotions. 27 cell sites
2003: Digicel & AT&T enter with GSM. C&W launches GSM. All launch GPRS.
St. Lucia mobile scene
ECTEL • East Caribbean Telecommunication Authority (ECTEL) • Regional “regulator” • Negotiate on behalf of member countries • Achieved early termination of C&W monopoly • Facilitated mobile competition through regional licensing • Moral: A regional telecom authority can have more impact on negotiations with incumbents and attracting investment than a single small country
Regional synergy, fibre cable • Digicel (St. Lucia) runs roaming operations from Jamaica • C&W (St. Lucia) runs Internet gateway from Antigua • Vodafone (Fiji) runs billing from Australia • Moral: Small market more attractive if investor has other operations in region and linked by fibre optic
Years after launch Mobile subscribers per 100 inhabitants
Moral: Act sooner to create pro-growth environment.
Tourism & telecoms • Tourism major industry • Makes telecom more attractive because creates larger ‘virtual’ market • Roaming growing source of revenue. Roamers pay much more. • Roaming agreements: Mauritius: 236 operators, 104 countries o Maldives: 95 operators, 50 countries o Fiji: 73 operators o St. Lucia: 68 operators o
Moral: Factor tourism into telecoms.
Mobile technology • 2.5 / 3G important for data applications • MMS postcards could turn into major tourist application • WiFi also relevant • Moral: Keep up with technology
Summary • St. Lucia dramatically shows impact of mobile competition, particularly entry of 3rd operator • Mauritius has lost its early lead in mobile due to competitive constraints, inability to keep up with technology and RPP • Maldives proves exception to rule with reasonable penetration & coverage despite monopoly and difficult geographical situation • Fiji has done less well: Low coverage and penetration; high tariffs • Moral: Align telecom goals with national goals
Message for incumbents • Justification for monopoly harder and harder to defend; better to get on board now • Technology evolution important for protecting market share • Market is bigger than thought; incumbent benefits from advertising and interconnection • Cooperate regionally with concrete objectives (e.g., fibre optic cable)
Further research • • • •
Tourism and telecoms Competition impact Data applications Impact of regional approach
Digital Access Index (DAI)
Complete case studies for Fiji, Maldives, Mauritius & St. Lucia to be available at: http://www.itu.int/ITU-D/ict/cs