The Mobile Economy

Pacific Islands 2015

Copyright 2015 GSM Association

 Pacific Islands Mobile Economy 2015

About the GSMA This report is authored by GSMA Intelligence, the definitive
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 Pacific Islands
THE Mobile
MOBILE Economy
ECONOMY 2015

Contents
Executive summary 2

1 The mobile industry in the Pacific Islands 8

1.1 Regional overview 8

1.2 Subscriber growth set to slow 10
1.3 A diverse region dominated by larger markets 12
1.4 Technology migration now underway 14
1.5 Market structure a challenge in many markets across the region 18
1.6 The role of satellite in the Pacific Islands 21

2 Contribution to economic and social development in 22

the Pacific Islands
2.1 Mobile contribution to economic development 23
2.2 Mobile contribution to social development 32
2.3 Digital Inclusion in the Pacific Islands 33
2.4 Delivering financial inclusion in the Pacific Islands 38
2.5 Disaster Response 40
2.6 Tackling the gender gap in the Pacific Islands 42
2.7 Mobile addressing a range of other social challenges in the region 43
3.2 Connected living: Mobilising the Internet of Things 50
3.3 Digital commerce 55

3 Policy: Supportive and collaborative action 44

3.1 Spectrum a scare resource requiring careful management 44
3.2 The importance of national broadband plans 47
3.3 Building regulatory capacity in the region: the potential role of the 50
GSMA
 Pacific Islands Mobile Economy 2015

Executive Summary
The mobile industry in the Pacific Islands has grown rapidly over
recent years, despite the challenges of a region that is one of the
most remote and geographically demanding. The unique mobile
subscriber base in the region reached 4.1 million by the end of
2014, up from 2.3 million in 2009. This is an annual growth rate of
12.6%, well ahead of the global and developing region averages.

Wake Hawaiian Islands

Northern Johnston Atoll
Mariana
MARSHALL
ISLANDS
Guam M I C
R
Caroline
O
N Kingman Reef
Palmyra Atoll
E
FEDERATED STATES
PALAU
OF MICRONESIA Gilbert Howland S Kiritimati
Baker I Jarvis
PAPUA NEW Phoenix
A
GUINEA NAURU
INDONESIA TUVALU KIRIBATI
SOLOMON Line
ISLANDS
M Tokelau

E SAMOA Tuamotu Arch.

L Wallis & Futuna Cook Is.
Society A
A VANUATU
FIJI American I
N Samoa
E S S
I A
Niue Tahiti
E
TONGA N
New Caledonia
L Y Pitcairn

AUSTRALIA P O Tubuai

French Polynesia
Norfolk Kermadec

NEW ZEALAND

*GSMA Intelligence estimates that the total number of active SIM connections at end 2013 was 6.3 billion.

2 | Executive Summary
 Pacific Islands Mobile Economy 2015

The region is also beginning to see an increasing switchover (DSO) and freeing the Digital Dividend
technology migration in its mobile networks and spectrum bands for mobile broadband will be essential
devices, with both an increasing proportion of 3G steps in bridging the digital divide and meeting the
(and to a lesser degree 4G) connections, as well as strong demand for data services going forward.
smartphone ownership. Mobile broadband connections
The GSMA has identified four frequency ranges
are expected to see an almost four fold increase by
within which the spectrum requirements for future
2020 across the region, growing from 1.1 million in
mobile broadband use could best be satisfied.
2014 to 4.1 million, reaching almost half of the total
These bands, which include a portion of the C-Band
connection base, helped by ongoing network build outs
(3.4-4.2GHz), should be identified for International
and more affordable devices.
Mobile Telecommunications (IMT) at the World
Despite the progress to date, subscriber penetration Radiocommunication Conference in 2015 (WRC-15). The
rates in the Pacific Islands continue to trail behind C-band is one of the few bands where a harmonised
those in other regions, both in terms of the broader portion could be made available for potential future
Asia Pacific region as well as other developing regions mobile broadband use worldwide and which is large
such as Sub-Saharan Africa. By the end of 2014, unique enough to support very high levels of data traffic and
subscriber penetration stood at 37%, a figure that is the fastest data rates. Governments in the Pacific
forecast to increase to around 42% by 2020. This will Islands may be reticent to support an identification
still leave the region trailing the developing market because local mobile data demands are less intense
average of 55%. and the C-Band is heavily relied upon for fixed satellite
services (FSS). An IMT identification at the international
Market liberalisation and the creation of more enabling
level simply provides more flexibility to each country
regulation has helped spur growth in the region in
to react to their specific market conditions, and does
recent years. The more modest rate of subscriber
not act as an additional constraint to existing services.
growth over the next few years largely reflects
It will not impact C-band satellite services in the Pacific
difficulties in extending connectivity to the outlying
Islands for as long as they are deemed necessary.
regions and islands, issues around affordability for
low income populations, and the challenge many of The Pacific Islands may also need an alternative to the
the smaller markets face in supporting more than one C-band to provide capacity in the future, to cater for
operator. demand from both domestic usage and tourism. The
2.7-2.9GHz band is a realistic and attractive option,
However, if the connectivity gap between the Pacific
with several countries from Europe, APAC and Africa
Islands and the rest of the Asia Pacific region is not
supporting its identification for IMT. The Pacific Islands
to widen further, smaller and less developed markets
should also consider supporting the proposal for a
need a more supportive regulatory framework, with
sub-700MHz UHF IMT identification at WRC-15, as
possible government collaboration or incentives, to
proposed in the USA and Canada. This band represents
ensure sufficient investment in the future. Robust and
the most cost efficient way to cover the whole islands
implementable national broadband plans can play
with mobile broadband connectivity. Other regions can
an important role as part of a broader focus on ICT
then benefit from lower price equipment when capacity
development in local economies.
becomes a problem and these alternative spectrum
Spectrum is a precious and finite resource and bands are required.
fundamental to the delivery of mobile services. With
The mobile ecosystem is directly responsible for driving
global data traffic set to see an almost ten-fold increase
major economic progress and welfare across the Pacific
by 2019, the ITU predicts that mobile broadband
Islands. In 2014, mobile technology was responsible
networks globally will need between 1340MHz and
for 4.7% of the regions GDP, representing nearly US$2
1960MHz of spectrum to meet the anticipated demand
billion in value added terms. The mobile ecosystem
in 2020. In many countries in the region, concrete
directly accounted for more than a third of that value,
commitments to the harmonised allocation and
with indirect and productivity impacts accounting for
assignment of sub-1GHz spectrum are yet to be fulfilled.
the rest.
Coordinating and accelerating the analogue to digital

Executive Summary | 3
 Pacific Islands Mobile Economy 2015

The period to 2020 will see mobile networks becoming services means mobile has the best opportunity to
the gateway to the internet for many of the people in drive connectivity and internet access throughout the
the region who remain unconnected today, overcoming Pacific Islands.
in some cases barriers such as geographical
However, mobile operators, regulators and other
remoteness which seemed unassailable just a few
industry stakeholders should recognise the scope for
years ago. Broader and easier access to the internet
partnerships and the ongoing role for complementary
will enhance economic and social prospects for many
alternative technologies (particularly satellite) in
and drive strong growth in the period to 2020. The
addressing the connectivity challenges in the region.
economic contribution of mobile technology will grow
The unique challenges to infrastructure roll out in the
at a faster rate than the rest of the regions economy,
region, as well as a lack of scale in many small island
claiming over 6% of the regions GDP by 2020.
states, may require innovative new business and
The economic footprint of the mobile industry can partnerships in order to reduce the cost of services
also be seen through the number of jobs it supports and so make mobile accessible to the still unconnected
in the region. In 2014, the mobile ecosystem directly populations in the region
and indirectly provided employment to over 25,000
Mobile services are increasingly seen as a driver of
people, with the figure projected to increase to over
socio-economic development in the region, particularly
30,000 by 2020. The industry also makes a very large
in the areas of financial inclusion, disaster preparedness
contribution to the funding of the public sector in the
and response, and bridging the gender gap. In many
form of general taxation with around US$220 million
Pacific Island countries today, fewer than 10% of
contributed across the islands in 2014. By 2020 this
adults are thought to have access to basic financial
amount will have grown to around US$280 million if we
services, mainly due to challenging geography, poor
assume that tax rates remain at current levels.
infrastructure and the high costs associated with
Mobile phones are bringing internet access to delivering services to sparse populations. Mobile money
previously unconnected populations across the world, services have been launched and significant progress
especially in developing regions where there is a lack of has been made in several countries in bringing financial
alternative access technologies. This is particularly the services to the unbanked throughout the Pacific
case in the Pacific Islands, with fixed line penetration Islands.
in most markets in the low single digits. At the end
The Pacific Islands is one of the worlds most
of 2014, around 15% of the population across the
environmentally vulnerable regions, as highlighted by
Pacific Islands were using mobile devices to access the
the impact of the devastating cyclone in Vanuatu that
internet, a figure that will more than double to a third of
struck the country on March 13th. Mobile operators and
the population by 2020.
governments are increasingly using mobile services
These figures for mobile internet access are both to coordinate disaster preparedness, response and
much lower than the averages for the broader Asia assessment activities across the region.
Pacific region and for the developing world as a whole.
Mobile has already made an important contribution
There are a number of difficulties in extending mobile
to growth and development across the Pacific Islands,
internet access in the Pacific Islands, with issues around
but has the potential to do much more. Realising the
affordability and expanding network coverage to
full transformative potential of the mobile industry in
remote and often inaccessible rural areas particular
the region will require increased collaboration between
challenges given high levels of poverty and low
all players in the region. This includes cooperation
population densities.
between the mobile operators and other ecosystem
Connectivity at present is delivered through a players; as well as collaboration with governments,
combination of mobile, satellite, undersea cables and regulators and other industry stakeholders.
fixed networks, and these technologies will continue to
serve as the backbone of communications in the region
in the future. The geographic and physical limitations
of fixed networks and the relative expense of satellite

4 | Executive Summary
 Pacific Islands Mobile Economy 2015

The Pacific Islands refers to a large area of the Pacific together provide over 99% of the mobile subscribers in
Ocean in which there are in excess of 20,000 islands, the region, and specifically excludes both Australia and
with a broad range of countries and territories. This New Zealand.
report focuses on twenty-one island states which

UNIQUE
POPULATION CONNECTIONS
SUBSCRIBERS
(000) (000)
(000)

American Samoa 55 28 55

Cocos (Keeling) Islands 0.6 0.2 0.3

Cook Islands 21 6 9

Fiji 890 591 1,020

French Polynesia 281 138 242

Guam 169 88 155

Kiribati 105 17 22

Marshall Islands 53 17 26

Micronesia 517 83 104

Nauru 10 5 9

New Caledonia 261 208 268

Niue 1 0.7 1

Norfolk Island 2 0.8 1

Northern Mariana Islands 55 19 29

Palau 21 10 19

Papua New Guinea 7,554 2,342 3,638

Samoa 193 118 240

Solomon Islands 579 275 368

Tonga 106 39 67

Tuvalu 10 3 6

Vanuatu 261 104 180

Executive Summary | 5
 MOBILE ECONOMY
PACIFIC ISLANDS
Unique subscribers and SIM connections

4.1M
2014 2014

37%
PENETRATION RATE

5.1M
2020
2020

42%
PENETRATION RATE

CONNECTIONS Excluding M2M

2014
6.5M 58% PENETRATION
RATE

2020
8.5M 69% PENETRATION
RATE

2009-14 2014-20
Subscriber
growth set to
slow, highlighting
12.6% 3.8%
Regional subscriber growth was well ahead of global
need for average, at a CAGR of over 12.6% 2009-14
collaborative But growth set to slow to below global average, with
a CAGR of 3.8% 2014-20
action

Accelerating moves to mobile broadband networks and smartphone adoption

Mobile broadband connections to increase Smartphones

17%
By 2020 there will
2014 be 4.9 million

1.3M 4.9M smartphone

48%
connections, up
2020 from only 1.3 million
2020
2014
at the end of 2014
 Mobile addressing economic and social challenges across the region

Delivering digital inclusion Delivering financial Delivering innovative

to the still unconnected inclusion to the still new services
populations across the region unbanked populations Growing range of new
Mobile internet subscriber 11 live services in 6 markets services and apps
penetration: 16% 2014 across the Pacific Islands launched in recent years
34% 2020 as of April 2015

Mobile ecosystem contribution to GDP

2014
US$2bn 2020 6.2% GDP
2014
4.7%
GDP

Public funding
US$2.8bn
Employment

Mobile ecosystem contribution to public Jobs directly supported by

funding in region before regulatory fees
mobile ecosystem

12,000 JOBS 2014

16,000 JOBS 2020

US$220M 2014

US$280M 2020
Plus an additional 15,000
indirect jobs supported in 2014
 Pacific Islands Mobile Economy 2015

1 The mobile
industry in the
Pacific Islands
1.1 Regional overview
The Pacific Islands cover a wide geographic area with expense of satellite connectivity means mobile has the
a large number of small islands and comprises mostly best opportunity to drive connectivity and internet
of developing economies. Countries vary significantly access throughout the Pacific Islands.
in size, ranging from Papua New Guinea (PNG) with a
The Pacific Islands are amongst the most
population of 7.6 million, to Niue and the Norfolk Islands
underdeveloped regions in the world in terms of
with populations of only one or two thousand. Much
mobile connectivity. By the end of 2014, only 37% of
of the region is relatively remote and geographically
the population subscribed to mobile services, which is
challenging, with a combination of small island
well below the global average of 50%, as well as other
countries with large distances from the central island,
developing regions such as Sub-Saharan Africa (SSA)
or in other cases larger islands with difficult and often
(with 39%). Unique subscriber growth is forecast to
inaccessible terrain. Connectivity at present is delivered
be modest over the next few years, approaching 42%
through a combination of mobile, satellite, undersea
by 2020. This will leave the region trailing the broader
cables and fixed networks, and these technologies will
Asia Pacific where penetration will be over 57%, and the
continue to serve as the backbone of communications
developing world average of 55%.
in the region in the future. However, the geographic and
physical limitation of fixed networks and the relative

8 | The mobile industry in the Pacific Islands

 Pacific Islands Mobile Economy 2015

Source: GSMA Intelligence

Unique subscriber penetration - regional comparison

(Millions)

57% 59%
55%
49% 50%
42% 45% 45%
37% 39%

Pacific Islands APAC SSA Developing Global average

regions

2014 2020

The mobile industry in the Pacific Islands | 9

 Pacific Islands Mobile Economy 2015

1.2 Subscriber growth set to slow

Over the last few years, the Pacific Islands have seen see relatively modest growth, largely due to difficulties
relatively rapid unique subscriber growth, reaching in extending connectivity to the outlying regions and
4.1 million in 2014, up from 2.3 million in 2009. This islands, and the challenge of affordability in a region
is a compound annual growth rate (CAGR) of 12.6%, with widespread poverty. The region will be home to
which is well ahead of the global and developing 5.1 million subscribers by 2020, with a CAGR of 3.8%,
region average, and only behind Sub-Saharan Africa below the developing world average of 4.9%.
(with 15.2%). Going forward, the next few years will

Source: GSMA Intelligence

Unique subscriber growth rates

(CAGR)

Global average
4.0%
7.2%
Developing regions
4.9%
9.4%
APAC
5.1%
9.9%
SSA
6.4%
15.2%
Pacific Islands
3.8%
12.6%
2014 - 2020 2009 - 2014

10 | The mobile industry in the Pacific Islands

 Pacific Islands Mobile Economy 2015

As is common in other developing markets, mobile with local market conditions, such as the level of
subscribers across the Pacific Islands tend to have competition between operators and availability of
multiple SIM cards in order to take advantage of attractive tariffs. On average, each unique subscriber in
promotional offers, as well as to avoid cross-network the region has just over 1.5 SIM cards, compared to the
call charges. Levels of multi-SIM ownership vary global average of 1.8.

Source: GSMA Intelligence

Connections (excluding M2M) and subscribers - Pacific Islands

7
69%
6
Million

4 42%
3
26%
2
17%
1

0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Connections Subscribers Connection Subscriber

penetration penetration

The mobile industry in the Pacific Islands | 11

 Pacific Islands Mobile Economy 2015

1.3 A diverse region dominated by larger

markets
Regional average figures can disguise the diversity of above the global average figure of 50%.
mobile markets across the region, and also be distorted PNG has one of the lowest subscriber penetration rates
by the role of one or two larger markets. The region is in the world, and in fact, the Pacific Islands is home
dominated by one market PNG home to two thirds to many other poorly penetrated markets. Of the 30
of the regions population (7.6 million) and almost lowest penetrated markets across the globe, six are
60% of the regions subscribers (2.3 million). PNG also in the Pacific Islands region, namely Micronesia (16%),
has one of the lowest subscriber penetration rates in Kiribati (17%), Cook Islands (29%), Cocos Islands (31%),
the region at 31%. This is well behind more developed PNG (31%), and Marshall Islands (32%).
markets such as New Caledonia (80%), Fiji (66%) and
Samoa (61%), all of which have penetration rates well

Source: GSMA Intelligence

Subscribers by country (major markets)

2014

Subscribers

2,342
Subscriber
80% penetration

66% 61%
49% 52%
48%
Thousands

40% 37%
31%
591
16%
275 208 138 118 104 88 83 39

Papua Fiji Solomon New French Samoa Vanuatu Guam Micronesia Tonga
New Islands Caledonia Polynesia
Guinea

12 | The mobile industry in the Pacific Islands

 Pacific Islands Mobile Economy 2015

Source: GSMA Intelligence

Subscriber penetration by country

2014

80%

66%
61%
56%
51% 52%
47% 48% 49% 49%
38% 40%
34% 35% 37% 37%
32%
39% 31% 31%

16% 17%
Micronesia

Kiribati

Cook Islands

Cocos (Keeling) Islands

Papua New Guinea

Marshall Islands

Northern Mariana Islands

Tuvalu

Pacific Islands

Tonga

Norfolk Island

Vanuatu

Palau

Solomon Islands

Nauru

French Polynesia

American Samoa

Guam

Niue

Samoa

Fiji

New Caledonia

The Pacific Islands region is very diverse, with widely Mobile broadband uptake (as a proportion of total
varying levels of mobile market maturity. Subscriber connections) ranges from low single digit percentages
penetration ranges from 16% in Micronesia to 80% in several markets to a high of 33% in Fiji, while
in New Caledonia, and connection penetration smartphone adoption is at its highest at 44% of total
ranges from 20% in Micronesia to 124% in Samoa. connections in New Caledonia.

The mobile industry in the Pacific Islands | 13

 Pacific Islands Mobile Economy 2015

1.4 Technology migration now underway

2G remains the dominant technology in the Pacific are currently expected to remain 2G-only through
Islands today, accounting for 83% of connections by the the end of the decade. In contrast, eight countries
end of 2014. However, several markets across the region will by then have most of their connections on mobile
are already beginning to see a migration to higher broadband technology, albeit the vast majority of these
speed mobile broadband (3G and 4G) networks. In Fiji, will be 3G as opposed to 4G. The largest country, PNG,
for example, mobile broadband connections accounted will also have made significant progress, growing its
for 33% of total connections respectively at the end of mobile broadband share of connections from 13% at
2014, with LTE already accounting for 14% of the total the end of 2014 to 40% in 2020. As a result, mobile
connection base. broadband connections are expected to see an almost
However, seven markets have yet to launch 3G or 4G four fold increase by 2020 across the region, growing
networks, namely the Cocos Islands, Marshall Islands, from 1.1 million in 2014 to 4.1 million, reaching almost
Micronesia, Niue, Norfolk Island, Palau and Tuvalu, and half of total connections (48%).

Source: GSMA Intelligence

Connections by technology generation

1% 18%

30%

99%

52%

2009 2020
2G 3G 4G

Despite the expected strong growth, mobile broadband However, just examining the technology split of 3G and
adoption in the Pacific Islands is still forecast to be 4G, the Pacific Islands adoption of 4G as a percentage
lower than many other regions. Across the developing of all mobile broadband connections will be slightly
world on average, mobile broadband (3G and 4G higher (37%) than the average in the developing world
connections) will account for two thirds of total (34%).
connections by 2020, well ahead of the level in the
Pacific Islands which is just under 50%.

14 | The mobile industry in the Pacific Islands

 Pacific Islands Mobile Economy 2015

Source: GSMA Intelligence

Technology generation comparison

2020

Pacific Islands

18%

52%

30%

2G 3G 4G

Developing world average

22%
35%

43%

2G 3G 4G

The mobile industry in the Pacific Islands | 15

 Pacific Islands Mobile Economy 2015

As with subscriber penetration, 4G growth will be 4G connections, or just under 1 million. Almost a fifth of
dominated by just two markets. Despite subscriber total connections in PNG will be 4G by 2020, up from
penetration remaining at one of the lowest levels in only 1% in 2014. Fiji, where 4G will actually overtake 3G
the world by 2020 at only 34%, the relative size of the in terms of connections by 2020, will account for 38%
country means PNG will account for 57% of the regions of the regions 4G connections.

Source: GSMA Intelligence

Technology mix by country

2020

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%
French Polynesia

Guam

American Samoa

Fiji

Nauru

Solomon Islands

New Caledonia

Samoa

Vanuatu

PNG

Cook Islands

Northern Mariana Islands

Kiribati

Tonga

Cocos Islands

Marshall Islands

Micronesia

Niue

Norfolk Island

Palau

Tuvalu

2G 3G 4G

16 | The mobile industry in the Pacific Islands

 Pacific Islands Mobile Economy 2015

Smartphone adoption closely mirrors the update of developed markets. Having grown slowly in comparison
mobile broadband. Feature phones (typically running to other regions of the developed and developing
on 2G networks) will retain dominance in some world, from just over 2% adoption at the start of
markets, particularly those lacking mobile broadband the decade to 20% at the end of 2014, smartphone
networks, and a significant presence even in the most adoption will nearly triple to 58% by the end of 2020.

Source: GSMA Intelligence

Smartphone adoption in the Pacific Islands - selected markets

72% 72%
68% 68% 66%
58% 59% 59% 57% 55% 55%
51%
44% 44%

31% 31%
23% 24%
20% 21% 20%
16% 16% 14%
Pacific Islands

French Polynesia

Guam

New Caledonia

American Samoa

Fiji

Vanuatu

Samoa

Solomon Islands

Papua New Guinea

Tonga

Micronesia

2014 2020

The mobile industry in the Pacific Islands | 17

 Pacific Islands Mobile Economy 2015

1.5 Market structure a challenge in many

markets across the region
At least in part, the regions underdevelopment can On average, each market has 1.7 operators, or 2.6 on a
be traced to the competitive environment, and the population-weighted basis. Furthermore, in contrast
challenges of sustaining more than one operator in to many other regions as well as most other countries
some of the smaller markets in the region. Of the in the broader Asia-Pacific region, there is only one
regions twenty one countries and territories, ten are mobile MVNO in the Pacific Islands (Inkk Mobile in Fiji)
currently served by only one mobile operator, while plus a further operator sub-brand MVNO (Smart Pinoy,
only three countries have three or more operators. of NTT DoCoMo in Guam).

Source: GSMA Intelligence

Number of mobile operators

1
4

1 3 3
2.6
2 2 2 2 2 2 2 2
1.7
1 1 1 1 1 1 1 1 1 1
American Samoa

Cocos (Keeling) Islands

Cook Islands

Fiji

French Polynesia

Guam

Kiribati

Marshall Islands

Micronesia

Nauru

New Caledonia

Niue

Norfolk Island

Northern Mariana Islands

Palau

Papua New Guinea

Samoa

Solomon Islands

Tonga

Tuvalu

Vanuatu

Weighted average

Simple average

MNO MNVO Sub brand

18 | The mobile industry in the Pacific Islands

 Pacific Islands Mobile Economy 2015

The Pacific Islands geography and demographics Recent press reports suggest that Marshall Islands is
certainly present challenges to increasing competition set to pass legislation that would open the countrys
and broadening coverage, particularly the smaller telecom market to competition and see a new mobile
nations and territories. For example, negotiations entrant, a move that is supported by the World Bank
between the government of Kiribati and a potential and could see the government receive additional
new entrant failed after a year of discussions in 2009, funding from the financial institution.6
due to concerns about the feasibility of having two In the case of Vanuatu, the government subsidised
mobile operators serving a country with a population the extension of networks to areas where the two
of only tens of thousands of inhabitants.1 Many of current mobile providers would not intend to provide
the states in the region consist of an archipelago service on a commercial basis. Despite the cost to
of many islands with a capital island of some size the government, the policy has been a success, with a
but several other sparsely populated islands, which significant increase in connectivity in Vanuatus outer
may be dispersed over hundreds of kilometres, with islands. The ITU summarises the broader societal
deficiencies in other infrastructure, such as electricity, benefits well: increased connectivity facilitates
that are essential to telecommunications. business transactions throughout the country as well as
Additionally, the region suffers from occasional but social links among the population. Opening the mobile
often devastating natural disasters that can damage sector to competition has driven down the cost of
the infrastructure already in place, as well as the telephone calls, improving service affordability.7
underlying economic growth. For example, Samoa had Regarding regulation, the ITU suggests that smaller,
been expected to graduate from the UNs list of least less developed markets need a more supportive
developed countries (LDCs) in 2010 after recovering regulatory framework with possible government
from two cyclones in the early 1990s, but was struck by support to ensure sufficient investment. Where high
an earthquake and tsunami in September 2009 which investment is necessary but demand is insufficient to
resulted in approximately 200 deaths and an estimated justify commercial investment, unregulated market
US$380 million of damage2, including to transport and forces may lead to unacceptable outcomes. There
power infrastructure, delaying its graduation from LDC needs to be the political will in place to ensure
status until 2014. that excesses of the market are tempered by a real
However, these challenges are not always concern to ensure that everyone can benefit from the
insurmountable. Samoa liberalised its mobile market richness of opportunities that the Internet and mobile
in 2006, paving the way for a new operator to enter technologies can offer.8
the market in early 2007. This led to a doubling of the It also recommends that planning and financing of
subscriber penetration rate in just over 12 months3 and development be broadened beyond government and
network coverage to expand to 95% of the territory.4 corporates: in recognition of the need to engage
The ITU stated, regarding the liberalisation, that the broader coalitions of partners if the benefits of ICTs are
introduction of competition into the mobile service truly to serve the most marginalised, we need to focus
market was a direct result of government institutional much more explicitly on Multi-Stakeholder Partnerships
reform that unwound the monopoly, employing careful (MSPs) that bring together stakeholders other than just
planning, consultations and a consensual approach as governments and private sector corporations.9
part of the reform.5
The ITU also highlights Vanuatu and the Solomon
Islands as states which have also successfully
introduced new competitors to their markets, in 2008
and 2010 respectively, despite similar challenges.

1. The Role of ICT in Advancing Growth in Least Developed Countries, ITU, 2011
2. The Role of ICT in Advancing Growth in Least Developed Countries, ITU, 2011
3. GSMA Intelligence data: Q4 2006, unique subscriber penetration rate 14.9%; Q1 2007, 30.4%.
4. The Role of ICT in Advancing Growth in Least Developed Countries, ITU, 2011
5. The Role of ICT in Advancing Growth in Least Developed Countries, ITU, 2011
6. https://www.telegeography.com/products/commsupdate/articles/2015/02/23/marshall-islands-poised-to-open-telecoms-market-digicel-waits-in-the-wings/
7. The Role of ICT in Advancing Growth in Least Developed Countries, ITU, 2011
8. The Role of ICT in Advancing Growth in Least Developed Countries, ITU, 2011
9. The Role of ICT in Advancing Growth in Least Developed Countries, ITU, 2011

The mobile industry in the Pacific Islands | 19

 Pacific Islands Mobile Economy 2015

1.6 The role of satellite in the Pacific Islands

Satellites play an important role in the provide connectivity to remote areas or scattered
telecommunications infrastructure of the Pacific islands that are some distance from the main island in
Islands, reflecting the challenging geography of the the archipelago. Satellite services can play a particular
region and the particular problems around bringing role in disaster relief and emergency communications,
connectivity to a large number of small and often when terrestrial-based services may be struggling to
remote islands. Commercial satellites in Asia Pacific cope.
operate primarily on two bands, the C-band and Ku- Fixed satellite services have a range of applications,
band. The C-band has wider coverage but requires including acting as complements to mobile network
larger antenna, and technological developments mean deployments, for example in providing backhaul for
issue of rain fade that has traditionally impacted the mobile services in remote areas. The role of satellite
Ku-band may become less of an issue.10 There are signs systems was recognised by ITU Member States at
of an increasing migration away from the C-Band, WTDC-2014, with three Resolutions acknowledging the
for example O3b has had some success in the region benefits that satellites provide to remote areas, and in
offering broadband services in Ka-band. Similarly, helping bridge the digital divide for remote and rural
Kacific aims to launch a Ka-band satellite in 2017 to regions with limited fixed line infrastructure. In the Cook
provide satellite broadband services, and has already Islands, broadband internet access, voice and video
begun to sign-up customers in the region.11 services, as well as backhaul for mobile services, are
There are a number of commercial satellite companies delivered by O3bs satellite network.12
providing satellite services in the region, with the There are a growing number of VSAT (very small
region benefitting from ubiquitous satellite coverage. aperture terminals) deployments in the Pacific Islands,
Satellites can play a role in providing both international with a range of potential uses. As well as backhaul
and domestic connectivity, both of which are severely services, VSAT can be used by corporates to provide
limited in many countries in the region. Whilst several reliable communication services, or by schools
new submarine cables have improved internet and communities in remote locations to provide
connectivity in the region over recent years, for some of connectivity. Satellite services are also the main means
the small islands and territories the lack of international of distributing television content across the region, with
connectivity remains a significant issue, with satellite in a number of satellite based direct-to-home (DTH) TV
many cases the only realistic option. services in operation, although most countries in the
The completion of new undersea cables can also region also have terrestrial broadcast TV services.
stimulate further demand for satellite services to

10. JTG4567/550-E: A study of rain fade depth on FSS frequency bands

11. https://www.telegeography.com/products/commsupdate/articles/2014/12/08/teletok-selects-kacific-for-satellite-broadband-solution/
12. http://www.broadbandcommission.org/documents/reports/bb-annualreport2014.pdf

20 | The mobile industry in the Pacific Islands

 Pacific Islands Mobile Economy 2015

Satellites play an
important role in the
telecommunications
infrastructure of the Pacific
Islands, reflecting the
challenging geography of
the region and the particular
problems around bringing
connectivity to a large
number of small and often
remote islands.

The mobile industry in the Pacific Islands | 21

 Pacific Islands Mobile Economy 2015

2 Contribution
to economic
and social
development
in the Pacific
Islands
Mobile has had a profound impact on national population than many other basic services, such as
economies worldwide, particularly in the areas of job electricity, sanitation and financial. As a result, mobile
creation and economic growth. Increasingly ubiquitous is already helping to address a number of pressing
and higher speed mobile networks contribute to many social, economic and environmental challenges. These
aspects of economic, political and social life in both challenges are often particularly acute in developing
developed and developing regions. regions, given factors such as high levels of poverty,
rapid population growth, and in some areas, the
Mobile is the predominant infrastructure in many
vulnerability to natural disasters.
emerging markets (including the Pacific Islands)
and is often available to a larger proportion of the

22 | Contribution to economic and social development in the Pacific Islands

 Pacific Islands Mobile Economy 2015

2.1 Mobile contribution to economic

development
Mobile network operators, infrastructure service providers, distributors and retailers of mobile technology,
and content and service providers constitute an ecosystem of interlinked industries with a strong and growing
presence in the 21 countries of the Pacific Islands covered in this report.
In 2014, mobile technology made a huge and central contribution to the economy of the region. The total was
US$1.8 billion in value added terms, a contribution of approximately 4.7% of the regions GDP. There were four
elements to this impact:

1 The direct contribution of mobile operators

2 The direct contribution of the rest of the mobile ecosystem

3 The indirect impact on the broader economy

4 The increase in productivity brought about by the use of mobile technologies.

There are further positive social and economic knock-on effect on other sectors of the regions
impacts from mobile technologies which have not economies, inducing further economic activity in the
been quantified, for example the improved access to supply chain. It is estimated that this effect generated
education, health and emergency services brought another US$130 million, or approximately 0.3% of GDP.
about by the use of mobile technologies in the region.
As access to mobile phones and the mobile internet
The overall estimate should be seen as a conservative
in the region continues to climb, more and more
estimate of the overall impact from mobile technology.
individuals and businesses can work more efficiently
The direct contribution from mobile network operators and at a lower cost. Mobile technologies continue to
in 2014 was over US$500 million in value added terms pave the way for the development of new business
(1.3% of the regions GDP). The mobile ecosystem of models and services which in turn also have a positive
interlinked mobile services and industries generated an economic impact. The total productivity impact
additional value of approximately US$155 million in the of mobile technology generated approximately
region, contributing 0.4% to the regions total GDP. an additional US$1 billion in value added in 2014,
accounting for 2.6% of the Pacific Islands overall GDP.
The economic activity directly generated by both
mobile operators and the ecosystem has a broader

Contribution to economic and social development in the Pacific Islands | 23

 Pacific Islands Mobile Economy 2015

Source: GSMA Intelligence

Total (direct and indirect) contribution to GDP

(2014, US$ M)

1,000 1,800

2.6%

160 130 4.7%

500 0.4%
0.3%

1.3%

Mobile Related General Productivity

Operators industries economy IMPROVEMENT
Total impact

Mobile ecosystem

Note: Total does not add up due to rounding.

The direct economic contribution of the mobile

ecosystem in 2014
The direct economic contribution to GDP of the mobile within the ecosystem with a contribution of just over
ecosystem is measured by analysing the value added US$500M, representing more than three quarters of
generated by companies operating in the sector the total economic contribution of the ecosystem. One
across the 21 countries of the region13. Value added of the distinct features of the mobile economy of the
is estimated here as the total income generated by Pacific Islands is that almost all mobile handsets are
the industry to its employees (through the payment imported from outside the region. Mobile devices have
of wages and other compensation), to government in any case a positive impact on the economy of the
(through tax contributions) and to shareholders (in the islands through the distribution and retail of imported
form of profits)14. handsets which generate revenues and jobs for local
businesses and people.
In 2014 the mobile ecosystem contributed a total
of around US$655 million in value added (1.7% of
GDP). Mobile operators are the largest contributors

13. Company information was obtained from GSMA Intelligence (https://gsmaintelligence.com/) and complemented where possible with further data provided by mobile operators in the region.
14. Value added by the sector can also be approximated as the difference between the value of sales made by the sector and the direct cost of making those sales.

24 | Contribution to economic and social development in the Pacific Islands

 Pacific Islands Mobile Economy 2015

Source: GSMA Intelligence

Direct GDP contribution of the mobile ecosystem

(US$ M, % 2014 GDP)

500

1.3%

60 70
0.2%
25 0.2%
0.1%

Infrastructure and Network Distributors and Content, applications

SuppORT Services operators Retailers and other services

Broader economic impacts of mobile technology in 2014

The economic activity generated by the mobile viable an increasing number of smaller-scale tourist
ecosystem results in a positive economic impact in operations. This growth and productivity effect varies
other sectors of the Pacific Islands economy. For significantly by country and sector and has generated
example, local transport and construction services in total a US$1 billion contribution to the regions GDP
in the islands draw part of their revenues from in 2014.
supporting the operations of extending and upgrading
Overall, considering direct, indirect and productivity
mobile network infrastructure. The same effect can
impacts, in 2014 the mobile industry made a total
be observed in many other sectors of the economy,
contribution of US$1.8 billion to the economy of the
including energy and professional services. It is
Pacific Islands in value added terms, equivalent to 4.7%
conservatively estimated that this multiplier effect
of the regions GDP. This contribution is significantly
of the mobile ecosystem on the rest of the economy
higher than the contribution from mobile technologies
generated a value added of approximately US$130
to the global economy, which is estimated at just under
million in 2014 (0.3% of GDP).
4% in 2014.15 The larger share of the mobile industry
In addition to the direct and indirect contribution to in the Pacific Islands is explained in part by the rapid
GDP by mobile network operators and the mobile growth in the use of mobile technologies in the region,
ecosystem, an estimated 2.6% of the regions 2014 GDP which is helping the regions companies to partly catch
can be attributed to the increased productivity brought up with the levels of productivity growth observed in
about by the use of mobile technology in businesses other regions some years ago. Another factor is that
and the workplace. For example, mobile technology relatively lower levels of economic activity in the region
plays a key role in the development of financial services mean that the share of the mobile technology as a
and e-commerce, and supports the growth of new percentage of the overall economy is also larger.
services and business models in tourism, making

15. http://www.gsmamobileeconomy.com/

Contribution to economic and social development in the Pacific Islands | 25

 Pacific Islands Mobile Economy 2015

Employment and public funding contribution in 2014

In 2014 mobile operators and the ecosystem provided Additional jobs were also indirectly supported as the
direct employment to approximately 12,000 people in industrys economic activity generated demand and
the region. Most of this employment was generated jobs in other sectors, in particular in the direct supply
by mobile network operators (4,000 jobs) and by chain of the mobile ecosystem. In 2014 approximately
companies involved in the distribution and retail of 15,000 jobs were indirectly supported, bringing the
mobile handsets (5,500 jobs). An additional 2,500 total impact (both direct and indirect) of the mobile
jobs were generated through the provision of mobile industry in the region to approximately 27,000 in 2014.
infrastructure services and the provision of media and
content, some of which is by local entrepreneurs.

Source: GSMA Intelligence analysis

Employment impacts in 2014

15,200 27,200

1,800 12,000
5,600
4,100
400
Infrastructure operators DISTRIBUTION CONTENT, APPS DIRECT INDIRECT TOTAL
& SERVICES

Note: Total does not add up due to rounding.

26 | Contribution to economic and social development in the Pacific Islands

 Pacific Islands Mobile Economy 2015

The mobile ecosystem also makes a very significant contribution to the funding of governments in the region. This
includes value added tax on mobile subscriptions, corporation tax, and income and social security contributions
made by the 12,000 people in the region which are directly employed in the mobile ecosystem. GSMA Intelligence
estimates that the mobile ecosystem made a contribution to the public finances of governments of US$220 million
in 2014.

Source: GSMA Intelligence analysis

Tax contribution by the mobile industry

(2014 million US$ M)

80 220

50
90

MOBILE SERVICES CorporatION Employee income TOTAL

VAT tax and social security

Contribution to economic and social development in the Pacific Islands | 27

 Pacific Islands Mobile Economy 2015

Outlook and trends in the period 2015-2020

In the period to 2020 the value added generated by the mobile ecosystem and enabled by the use of mobile
services will continue to grow. This growth will be experienced across all the key economic measures that have
been considered in this report: value added, employment and the contribution to the funding of the public sector.
By 2020, the total economic value added across the region will increase by around US$1 billion, reaching US$2.8
billion in 2020.

Source: GSMA Intelligence analysis

Mobile industry contribution to 2020

(US$ M, % 2014 GDP)

6.2%
6.0%
5.7%
5.4%
5.0%
4.7% 4.7% 2,600
2,800
2,500
2,300
2,100
1,900
1,800

2014 2015 2016 2017 2018 2019 2020

Footnote In 2015, all major international organisations, including the International Monetary Fund, expect the GDP of the region to experience a one-off
positive jump due to the start of large scale exports of natural gas from Papua New Guinea. As a result, and despite expected strong growth in the value
added generated by mobile technologies of around 8% in 2015, the also very strong growth in the energy sector means that as a percentage of GDP mobiles
contribution will remain stable at 4.7%. Once the one-off effect goes away from 2016 onwards the share of mobile as a proportion of GDP is expected to
continue to grow until 2020.

As a percentage of GDP, the contribution of the mobile industry will also increase, from 4.7% in 2014 to 6.2%
in 2020. This strong growth is higher than the growth that is forecast at the global level, which puts the Pacific
Islands among the regions in the world where the impacts from mobile technologies will be most transformative
from a socio-economic perspective during this period.

28 | Contribution to economic and social development in the Pacific Islands

 Pacific Islands Mobile Economy 2015

Source: GSMA Intelligence analysis

Economic value added: Pacific Islands compared to rest of the world

Pacific Islands

155

World

130

100

2014 2020

Contribution to economic and social development in the Pacific Islands | 29

 Pacific Islands Mobile Economy 2015

Approximately a quarter of the growth in economic internet penetration such as PNG, Vanuatu and
value added during the period will originate from the the Solomon Islands. There is less growth potential
growth in the mobile ecosystem itself. The growth in through productivity improvements where market
the number of mobile internet subscribers during this penetration is already high, such as in New Caledonia
period will drive revenues and value added across and the French Polynesia, which are also amongst the
the ecosystem. However, most of the growth in value countries with highest income per capita in the region.
added discussed above will be generated in the form It is important to note that there is some upside to
of productivity gains to the economy and business our projections in these higher income countries if the
creation enabled by the use of mobile services. development of the internet of things and the roll-out
of mobile broadband networks can start delivering
Growth in the period to 2020 is expected to be
efficiencies and lower costs for businesses already
particularly strong in those countries with lower
during this period.
income levels and relatively low levels of mobile

Source: GSMA Intelligence analysis

Forecast of total value added generated by mobile technologies

2014, bubble size proportionate to size of market

45%

New Caledonia
40%
Fiji
Unique mobile internet subscribers

35%

30%
Samoa

25%

French Polynesia
Solomon Islands
20%

15%

Vanuatu
10%

5% Papua New Guinea

0%

2% 4% 6% 8% 10% 12% 14%

Growth in GDP generated by mobile technologies, 2014-2020 CAGR

30 | Contribution to economic and social development in the Pacific Islands

 Pacific Islands Mobile Economy 2015

The total number of jobs both directly and indirectly generated by the ecosystem will also grow significantly in
the period to 2020. The number of jobs created by the mobile ecosystem will grow from 12,000 in 2014 to nearly
16,000 in 2020. The growth in the economic activity generated by the industry will also result in more jobs in the
broader economy throughout the period, reaching over 18,000 jobs in 2020 from around 16,000 in 2014. Similarly,
the public funding contribution of the mobile ecosystem (excluding spectrum and other regulatory fees) will also
grow over the period reaching approximately US$280 million by 2020 if tax rates remain at current levels, up from
US$220 million in 2014.

Source: GSMA Intelligence projections

Employment projections in the period to 2020

(Jobs)
18,400
15,200 15,600
12,000

2014 2015 2016 2017 2018 2019 2020

Ecosystem employment Indirect employment

Source: GSMA Intelligence projections

Public funding contribution

(US$ M)

280
220

2014 2015 2016 2017 2018 2019 2020

Contribution to economic and social development in the Pacific Islands | 31

 Pacific Islands Mobile Economy 2015

2.2 Mobile contribution to social development

In many developing regions, mobile phones are increasingly seen not just as an economic driver, but also as a
driver of social development. Mobile connectivity through feature phones can provide communications and access
to basic services to currently disadvantaged populations. Indeed, as mobile networks become more ubiquitous,
mobile penetration rates are often higher than those for other basic services. As a result, mobile can act as an
enabler when other more traditional delivery mechanisms fall short, and this is already being used to provide
underserved populations with access to information and services.

Source: Mobile for Development Impact product and service tracker

Mobile-enabled product and service evolution, Pacific Islands

25

20
Number of deployments (cumulative)

15

10

Money Health Learning Others

Note: Others includes mobile agriculture and NFC

Studies have shown that mobile services and access to the internet can also accelerate economic growth,
especially in developing countries. For this reason, developing an ICT framework has become a priority for
governments in the Pacific Islands. The vision set out in the Framework for Action on ICT for Development in
the Pacific (FAIDP) is Improved livelihood of the Pacific communities through effective utilisation of ICT. The
main goals of the FAIDP are access to affordable ICT, efficient and effective utilisation of ICT for sustainable
development and adoption of ICT as a national priority in the Pacific Islands.

32 | Contribution to economic and social development in the Pacific Islands

 Pacific Islands Mobile Economy 2015

2.3 Digital Inclusion in the Pacific Islands

Mobile phones are bringing internet access to speed mobile broadband networks, can then act as a
previously unconnected populations across the world, platform for the delivery of a range of more advanced
particularly in developing regions where there is a lack applications and services, and act as a key platform for
of alternative access technologies. Fixed broadband the delivery of broader ICT strategies and to promote
penetration on average across the Pacific Islands both growth and sustainable development.
stands at less than 1% of the population, and where
At the end of 2014, around 15% of the population across
fixed connections do exist they are often prohibitively
the Pacific Islands were using mobile devices to access
expensive.
the internet, equivalent to around 1.7 million individuals,
Mobile internet access can create a virtuous cycle a figure that has tripled in the last three years alone.
in developing countries. In the first instance, mobile Going forward, mobile internet penetration will reach
connectivity using simpler feature phones can around a third of the population by 2020, by which
provide communications and basic services to time an additional 2.4 million people across the Pacific
currently disadvantaged populations. Mobile can act Islands will gain mobile internet access. Over three
as an enabler when other more traditional delivery quarters of subscribers will be accessing the mobile
mechanisms fall short, and is already being used internet by this date on mobile broadband networks, up
to provide underserved populations with access to from just over half at the end of 2014.
information and services. Mobile and mobile internet
access, particularly when provided over higher

Source: GSMA Intelligence

Mobile internet subscriber penetration

49.0% 49.2%
45.5%
37.5%
33.6% 31.7% 33.4%
28.6%
20.3%
15.5%

Pacific Islands APAC SSA Developing regions Global average

2014 2020

Contribution to economic and social development in the Pacific Islands | 33

 Pacific Islands Mobile Economy 2015

However, this will still leave mobile internet penetration Islands. The countries that are driving this growth are
rates in the Pacific Islands trailing both the averages for PNG, where the total number of Facebook users has
the broader Asia Pacific region and for the developing tripled since mid-2011, and then Fiji and Samoa.
world as a whole. This lack of internet access compared
The GSMA launched its Digital Inclusion programme
to other regions in the world has the potential to hinder
in April 2014 to expand global connectivity and
development opportunities and prevent the region
increase mobile internet adoption. The programme
from truly engaging in the information age.
will collaborate with mobile operators, governments,
Today the largest online network in the Pacific Islands internet players and non-government organisations to
is Facebook. As of November 2012, there were address four key barriers to mobile internet access.
approximately 700,000 Facebook users in the Pacific

Network infrastructure and policy: increasing network coverage to currently unserved areas.
Affordability and taxation: the combination of low incomes, the cost of the device, charging fees, and data
plan payments creates an affordability barrier to accessing the mobile internet. This issue is compounded by
government taxes and fees, such as airtime taxes and handset taxes.
Consumer barriers: Illiteracy, digital illiteracy and lack of internet awareness are consumer barriers to mobile
internet adoption.
Local content: the availability of content that is both local language and locally relevant can play a vital role in
the adoption of mobile internet.

2.3.1 Network infrastructure and policy:

extending coverage to currently
underserved areas

Network coverage is critical for access to the mobile referred to as being sea-locked. The lack of electricity
internet, particularly higher speed networks that infrastructure and a low road density can provide
allow consumers to utilise a range of new services extra obstacles to extending network coverage, which
and applications. At the end of 2014, mobile operators negatively impacts the economic case for mobile
reached a little over 40% of the population in the operators to expand networks in these areas.
Pacific Islands with higher speed mobile broadband
There are a number of measures that can be taken both
(3G) networks, slightly below the coverage seen in SSA
by industry players and by governments and regulators
and well below the developing market average, which
to help address these issues. Infrastructure sharing is
stands at approximately 70%.
a solution that can help reduce the cost of extending
A large proportion of the still unconnected population network coverage, particularly into remote areas. It has
lives in rural and in some cases geographically remote the potential to strengthen competition and reduce the
areas. Many states are fragmented into a large number carbon footprint of mobile networks, while reducing
of small islands, and the region as a whole often costs.

34 | Contribution to economic and social development in the Pacific Islands

 Pacific Islands Mobile Economy 2015

Mobile operators in many developing regions are region. The role of satellite communications has already
employing a wide array of solutions to tackle the been highlighted in the report, and particularly for
challenge of off-grid connectivity, including the some of the more sparsely distributed and relatively
growing use of green options such as solar, wind, small populations this role is likely to continue.
water, biomass and fuel cells. Such alternatively
Recent research by Frontier Economics examined the
powered cell sites can significantly decrease diesel
role of network competition in promoting rural mobile
costs (which are often the primary power source in
coverage. Evidence from more than 200 countries
areas off the main electricity grid) and therefore reduce
over a 15 year period shows that network competition
operating costs and maintenance burdens of rural
has driven mobile coverage further and faster than
cell towers. There are a number of examples of these
has been achieved by single networks. There are also
green deployments across the Pacific Islands. Digicel
complementary measures that governments can take
in Vanuatu has deployed hybrid wind/ solar powered
to promote mobile coverage in rural areas. For example,
base stations, with a total of 25 of these deployed in
there may be some rural areas where the economics
the country, while Vodafone in Fiji and Digicel in PNG
are too challenging for network competition to deliver
have also deployed a number of hybrid powered base
coverage, which may require some form of government
stations.
intervention.
The particular geographical challenges of the
region mean that complementary alternative access
technologies are likely to continue to play a role in the

Source: Frontier Economics

Complementary government policies to promote rural coverage

Using public finances to (co)fund

roll-out in uneconomic rural areas

RURAL
COVERAGE Promoting voluntary infrastructure
sharing in rural areas

Licensing of low frequency spectrum in combination

with coverage obligations

Contribution to economic and social development in the Pacific Islands | 35

 Pacific Islands Mobile Economy 2015

2.3.2 Affordability and taxation

Unconnected populations in many developing regions Commission for 2015 is a maximum of 5% of GNI per
suffer from high levels of poverty, and this is a particular capita.17 In the Pacific Islands, the price of mobile
challenge across many Pacific Islands. Poverty in the services ranges from 4.8% of GNI per capita in
region has been exacerbated by a prolonged period of Micronesia to 16.1% in PNG.
relatively weak economic growth, population growth
Broadband, both fixed and mobile, is even less
and increasing urban migration.16 As a result, individuals
affordable compared to basic mobile services. Fixed
face difficult choices on a daily basis about how to
broadband prices as a percentage of GNI vary from
spend their cash resources, which means that mobile
5.2% in Fiji to over 100% in Kiribati, Solomon Islands and
connectivity remains beyond the reach of many people.
PNG. Prices for mobile broadband are more affordable
The ITU has estimated how much ICT services cost under 35% of GNI per capita however they are still
relative to the economic value generated by each far from the target of 5% of GNI per capita.
country. The affordability target set by the Broadband

Source: ITU

Fixed broadband prices as a percentage of GNI per capita

266%

202%

111%

42%
24% 26% 18%
12% 14% 15%
5% 2%
Fiji

Micronesia

Marshall Islands

Samoa

Vanuatu

Kiribati

Solomon Islands

Papua New Guinea

APAC

Developing

Developed

World

16. http://www.oxfam.org.nz/what-we-do/where-we-work/poverty-in-the-pacific
17. GNI: gross nation income per capita, which is GPD plus the income received from overseas

36 | Contribution to economic and social development in the Pacific Islands

 Pacific Islands Mobile Economy 2015

Source: ITU

Mobile broadband prices as a percentage of GNI per capita

33%
31%
29%
28%

15%

9%
7% 7% 8% 8%
6% 5% 6% 6%
4%
1% 1%
Fiji

Samoa

Vanuatu

Solomon Islands

Papua New Guinea

Kiribati

APAC

Developing

Developed

World
Prepaid Contract

There have been considerable efforts over recent In PNG, bmobile offers data bundles valid for 1, 3, 7, 14
years, both by mobile operators and other ecosystem or 30 days. These allow users to access the internet for
players, including device manufacturers, to improve a period of time or alternatively allow full access to a
the affordability of mobile services. Operators have particular website.
played a role in improving the affordability of mobile
Smartphone adoption will be enabled by ongoing
services, particularly with regard to mobile data and
reductions in handset pricing. A number of
internet access, and the challenge of making these
smartphones in the US$25-50 price range were
services available to low income consumers on prepaid
launched over the last year, such as the Mozilla Firefox
tariff plans18. A range of flexible tariffs are now available
smartphone, with new models from several handset
from operators focusing on mobile data. For example
manufacturers. These launches only mark the start of a
Vodafone Fiji offers flexible prepaid plans which are
price expansion trend towards low-cost levels that will
priced based on the days of use or the amount of data.
spread to more developing economies.

18. https://gsmaintelligence.com/files/analysis-subscription/?file=131205-prepaid-data-tariffs.pdf

Contribution to economic and social development in the Pacific Islands | 37

 Pacific Islands Mobile Economy 2015

2.3.3 Consumer barriers and local content

Two main barriers for consumers in accessing the telecentres. Through partnerships with the World
internet are literacy and awareness. Literacy remains Bank and key industry players such as Telecom Fiji and
a significant barrier to internet access in developing Vodafone, which provides support with infrastructure,
regions. While there has been significant progress in several centres are being set up. The first telecentres
reaching the goal of universal primary education, adult were launched in 2012 in schools and in local centres
illiteracy remains a challenge in a number of countries to serve the surrounding community. Many of these
across the Pacific Islands. Whilst declared adult literacy potential users consist of people who have never used
rates for many countries are around the 70% level, the internet before, therefore assistants are available
research has suggested that the true or functional in the telecentres to help people learn how to use the
literacy rates are significantly lower19. internet.
Combined with an overall lack of awareness about The availability of local content can play a vital role in
the internet and its potential uses and benefits, these the adoption of mobile internet. In Fiji, Vodafone has
factors create a significant barrier for mobile internet been trying to address this problem by launching the
adoption, even where coverage and affordability first local App-Store, the V-app Store. The purpose
issues have been addressed. Building awareness of of this initiative is to have localized apps for local
the internet and needed skills in the developing world situations that serve local needs. Apps like shopping,
will require help from multiple stakeholders to deliver banking, cinema, news, sports, information, lifestyle,
awareness through campaigns and literacy training travel, education and fashion can all be customized
programmes. for the Fijian market, which should make them more
relevant for the local population.
In Fiji, a key element of the countrys national
broadband plan has been the establishment of

2.4 Delivering financial inclusion in the

Pacific Islands

In many Pacific countries today, fewer than 10% of Programme (UNDP) and the UN Capital Development
adults are thought to have access to basic financial Fund (UNCDF) launched a joint project, the Pacific
services. Challenging geography, poor infrastructure Financial Inclusion Programme (PFIP)20, to help provide
and the high costs associated with delivering services sustainable financial services to low income households
to sparse populations are barriers to financial inclusion in the Pacific. The programme, now in its second
in the region. phase, aims to increase financial inclusion across the
region by ensuring that Pacific Islands implement
A range of players are looking to address the issue of
national financial inclusion strategies that address the
financial inclusion in the region, including governments,
affordability of financial services, increase financial
mobile operators, financial institutions and other
literacy and education, and lower barriers to entry21.
stakeholders. The United Nations Development

19. http://devpolicy.org/in-brief/alarming-literacy-gap-in-the-pacific-20131122/
20. http://www.pfip.org/
21. http://www.sids2014.org/index.php?page=view&type=1006&nr=2451&menu=1507

38 | Contribution to economic and social development in the Pacific Islands

 Pacific Islands Mobile Economy 2015

Mobile has played a key role in accelerating the without the need of a credit card or smartphone.
adoption of these services. Today there are a total of 11 It offers customers a range of promotions and an
live mobile money services available to the unbanked in expanded network to make payments easier and more
six different countries across the Pacific region: two in convenient. Digicel has seen over 50% of mobile money
Fiji, five in PNG, one in Samoa, one in Solomon Islands, users register their accounts to an NFC tag, and a 30%
one in Vanuatu and one in Tonga. Six of the eleven increase in unique users of mobile money services25.
services are operationally run by mobile operators.
Providers in the region have also shown some success
At the end of 2014, there were a total of 595,000
in increasing the penetration of financial inclusion
registered mobile money accounts in the region,
amongst women. MiCash was launched by Nationwide
though just a quarter of the accounts were active22.
Microbank in PNG in 2012, in a market where only
At the end of 2014, there were almost 4,000 mobile
15-20% of the population were estimated to have
money agents across the region, over 80% of which
access to financial services. The uptake of the service
were active23.
was particularly strong amongst women, with women
Fiji was the first county in the region to have launched a accounting for around 38% of the customer base and
mobile money service in 2010. Services are now offered using the service primarily for savings. The company
by both mobile operators: Digicel and Vodafone. also undertook a number of local marketing campaigns,
Today, 169,000 underserved people have been reached for example visiting villages and plantations, in order to
through mobile money services. There has been a educate women on financial services and the benefits
generally supportive and enabling regulatory regime of using mobile money26.
in Fiji towards mobile money services, and in 2014, the
While a growing proportion of the population in the
two providers signed a Trust Deed Instrument with
Pacific Islands have the technology that allows them
the Reserve Bank of Fiji to further protect customer
to access financial services, more needs to be done
funds. In 2011, the Department of Social Welfare (DSW)
to educate potential users. A survey conducted by
launched government-to-person (G2P) payments, and
the PFIF in Fiji in 2012 suggests that most people are
23,000 social welfare clients are now paid through
aware that mobile money services exist, but do not
electronic savings account. This was the first large scale
have a good understanding of how the service could
transfer of G2P welfare payments of its kind in the
be relevant to them and their financial needs. Frequent
Pacific24.
mobile money users surveyed cited both convenience
In 2012, Digicel Tonga launched a commercial NFC and time saving as the biggest advantages of using
service, Beep and Go. The service won Best NFC mobile money. From the survey results, the price of
Category at the Connected World Forum Awards in transactions did not appear to be a limiting factor,
2012, and in 2013 it won the Best Consumer Innovation even among lower-income users27. In order to increase
Award at the Global Telecoms Business Innovation awareness and on-board new potential customers,
Awards. Beep and Go is the worlds first integrated mobile operators are increasingly partnering with
NFC capable wallet. It works by linking an NFC POS other trusted local brands including post offices, banks,
(point of sale) terminal to a mobile money wallet, microfinance institutions and insurance companies.

22. Based on a 90-day cycle

23. Based on a 30-day cycle
24. Source: Pacific Financial Inclusion Programme
25. Source: Digicel Tongas beep & go wins best NFC category at connected world forum awards, Digicel, November 2012
26. http://www.gsma.com/mobilefordevelopment/reaching-half-of-the-market-women-and-mobile-money-the-example-of-nationwide-microbank-in-png
27. Source: Mobile money attitudes and perception omnibus survey, PFIP, February 2012

Contribution to economic and social development in the Pacific Islands | 39

 Pacific Islands Mobile Economy 2015

2.5 Disaster Response

The Pacific Islands is one of the worlds most vulnerable the exposure of countries to natural hazards and the
regions to natural disasters. According to the UN World social, economic and ecological conditions within these
Risk Index (WRI)28, Vanuatu is the country with the countries. In the Pacific Islands, exposure, vulnerability
highest probability in the world that an individual is and lack of coping and adaptive capacities are the
affected by a natural disaster. This ranking has been main factors that contribute to the high probability
underlined by the devastating impact of the cyclone of individuals being affected by natural disasters. The
which recently struck the country. two most frequent types of disasters in the region
are hydrological (flooding and water movement) and
Tonga, Solomon Islands and PNG are also among
meteorological (storms).
the top ten countries at risk. The index takes into
account both external and internal factors, combining

Source: UN World Risk Report 2014

Probability of an individual becoming the victim of a natural disaster

36.5%

28.2% 28.2%

20.7% 19.4% 19.2%

17.3% 17.1% 17.1% 16.7%
13.7%

1.7%
Vanuatu

Philippines

Tonga

Guatemala

Bangladesh

Solomon Islands

Costa Rica

El Salvador

Cambodia

Papua New Guinea

Fiji

Kiribati

Pacific Islands Other

28. The components of the World Risk Index are: exposure (exposure of the population to natural disasters), vulnerability (sum of susceptibility, lack of coping and adaptive capacity), susceptibility (dependent on
public infrastructure, nutrition, income and general economic framework), lack of coping capacity (dependent on governance, medical care and material security) and lack of adaptive capacity (related to future
natural events and climate change)

40 | Contribution to economic and social development in the Pacific Islands

 Pacific Islands Mobile Economy 2015

In times of disasters, isolated communities become across the islands so that people could charge their
even more isolated, particularly when communications phones and providing a total of US$250,000 free
infrastructure is damaged, and this is where credit to their customers to allow them to continue
operators have an obvious, but critical role. It is to communicate with their families despite top-up
crucial that emergency lines or other forms of back- difficulties. Regular updates on network restoration
up communication systems are already in place and have been provided via social media to keep
maintained such that communities at risk are easily subscribers informed of the network status and to
reached before, during and post emergency situations. alert them of the emergency response activities being
undertaken by the operator. Digicel began its activities
There are numerous examples of how mobile
even before the cyclone struck, pre-positioning fuel
operators and governments have used mobile phones
for use in back-up generators and moving network
to coordinate disaster preparedness, response and
engineers to strategic points enabling them to respond
assessment activities across the region. Digicel has
rapidly to restore networks in the aftermath of the
worked with Government Agencies across the Pacific to
cyclone.
provide SMS warning alerts to key agencies across the
islands in times of emergency. In Vanuatu, the National During natural disasters, networks can go down,
Disaster Management Office (NDMO) established a especially if back-up systems are not in place. An
short code emergency number allowing people to alternative solution to ensure communication during
easily receive disaster warnings and alerts. In addition, these black-outs is satellite communication. The Pacific
NDMO has developed an SMS impact reporting Islands Telecommunications Association (PITA) and
tool, where assessment data can be sent using the the International Telecommunications Unit (ITU) have
short code number. The data received via SMS is launched a project to connect rural villages through
disaggregated and synchronised with Ushahidi, a free satellite communication. One of the objectives of the
open source crisis mapping platform, which provides project is to provide emergency telecommunications
a visual representation of affected areas to inform to help individuals during disasters, and E-centres will
response efforts. serve as the hub for emergency telecommunication
when disaster strikes.
When Cyclone Pam hit Vanuatu, Digicel responded
to the disaster by restoring connectivity in the capital
within a few days, deploying public charging stations

Contribution to economic and social development in the Pacific Islands | 41

 Pacific Islands Mobile Economy 2015

2.6 Tackling the gender gap in the Pacific

Islands

Recent research by the GSMAs Connected Women and other stakeholders can use to help their female
programme has found that, on average, women are customers overcome technical literacy issues. The
14% less likely to own a mobile phone than men. 54% of toolkit explains key mobile functions such as SMS,
women in low and middle income countries in East Asia mobile money, and bill payment, mainly through visual
& Pacific do not own a phone, or 531 million women. and audio resources to account for low literacy levels.
As well as the ownership gap, there is also a usage gap
Other examples of services launched in the Pacific
between men and women. Even when women own a
Islands targeting women are Tapuaki, a website and
phone, they use it less frequently and intensively then
smartphone app that allows Pacific Island mothers
men, especially the mobile internet.29
and other members of the family to find information
A study carried out in PNG shows that only 16% of leading up to, during, and after pregnancy. The app
women at the bottom of the pyramid (BOP) own a and the website are available in local languages.
mobile phone, but 55% have access to a mobile phone. Another example is an SMS-based interactive
The main reason for not owning a mobile phone is counselling and advisory channel launched in Fiji by
affordability, but more than half would be interested Fijis Goodwill Ambassador for Women, Madam Nazhat
in purchasing one. In addition, 35% of BOP women Shameem. Today, more than 25,000 subscribers
surveyed were not comfortable with making a call, and receive information and awareness on child abuse,
just over half could not send an SMS.30 sexual assault, rape and domestic violence, and 11,000
enquiries were received for advice on avenues to
The main barriers to mobile ownership and usage
seek redress and support. A further example is an
identified by women are affordability (handset
SMS advisory service in Fiji on sex education a range
cost, SIM cost, credit cost and battery charging
of health related topics. It has reached over 50,000
cost), network quality and coverage, security and
subscribers and continues to raise awareness on
harassment, operator/agent trust and technical literacy.
diseases with the engagement of a panel of doctors.
Cost remains the greatest barrier overall to owning
and using a mobile phone, particularly for women Closing the gender gap in mobile ownership and
in developing regions, who often have less financial usage in low- and middle-income countries can
independence than men. Improving affordability, have substantial benefits to women and the society.
especially of handsets, will disproportionately benefit For women, access to mobile phones and services
women and help to close the gender gap in mobile offers the benefits of feeling connected, autonomous
phone ownership.29 and safer, the ability to access critical information
and services, and the potential to access increased
In the Pacific Islands, operators and other key players
employment and education opportunities. In addition,
have worked together to overcome technical and
ensuring the increase in ownership and usage of mobile
language literacy barriers. Technical literacy and
phones among women could add an additional US$170
confidence is a particular concern for women in this
billion globally to the mobile industry by 2020. In East
region, who are typically less educated, less confident
Asia & Pacific, this opportunity is around US$17 billion
with technology, and have more basic handsets than
by 202031, around 80% of which will come from closing
men. In PNG, the Connected Women programme has
the usage gap29.
developed a Mobile Skills toolkit that mobile operators

29. Source: Bridging the gender gap: Mobile access and usage in low and middle-income countries, GSMA Connected Women, March 2015
30. Source: Striving and Surviving in Papua New Guinea: Exploring the Lives of Women at the Base of the Pyramid, GSMA Connected Women, November 2014
31. Excluding China

42 | Contribution to economic and social development in the Pacific Islands

 Pacific Islands Mobile Economy 2015

Key stakeholders can work together to address some mobile operators and other industry players can
of the main barriers. Mobile industry key players design services to meet the needs of women who are
can design solutions to bring low cost devices to less literate and ensure that pilots and user testing
customers (e.g. microloans, monthly instalments and of services include women. Policy makers and the
creating partnerships between mobile operators and development community also have a role to play
handset manufacturers), introduce more creative to help women overcome these barriers and drive
pricing to appeal to womens price sensitivity, develop mobile adoption. These recommendations create an
relevant services for women, and, where men make opportunity for stakeholder to accelerate the uptake
decisions on the womens access to mobile, create of mobile technology by women in low and middle
marketing campaigns targeting men to reach women. income countries.
In addition, to address the technical literacy barriers,

2.7 Mobile addressing a range of other social

challenges in the region

Mobile operators and other players have launched Agency for International Development (Australian AID)
services to address social issues in areas such as and in partnership with the mobile technology agency
agriculture, health, and learning. In 2013, Digicel Fiji MobiMedia. Haus Lain provides tips on a wide range of
launched Makete, a USSD-based32 platform for farmers health issues, from maternal health, preventing child
that allows buyers and sellers access to live prices for and infant death from diarrhoeal disease and malaria,
crops. The service reflects a government strategy of prevention of the transmission of HIV and sexually
import substitution, to increase local production of transmitted infections, and helping married couples
certain foods and to help supply the tourist industry. better communicate to maintain strong, healthy
In 2014 in Fiji, Vodafone launched mFarmacy in relationships. Any Digicel mobile service user in PNG
collaboration with the Western Charity Alliance, which can join the service and receive free, weekly health tips.
is focussed on providing information on farming
Also in PNG, APuHC launched an mHealth project for
practices to ensure that healthy produce reaches the
neuro-cognitive disorders in HIV patients in 2011. This
market.
project aims to screen HIV patients for neuro-cognitive
Four health services have been launched in the Pacific disorders through a multi-disciplinary collaboration of
Islands, three of which are in PNG, and one in Fiji. In neurologists, sociologists, information technologists
PNG, Digicel launched Femili Seif hotline in partnership and HIV experts. In Fiji, Vodafone launched F-One,
with Yumi Lukautim Mosbi (YLM) project, a network of a service that provides daily health and fitness
organisations looking to create a just, safe and secure information through SMS.
society. Femili Seif aims to assist women and children
Both of the mobile operators in Fiji have launched
who are victims of violence or abuse, by providing
mobile learning services. The Vodafone ATH
a free 24 hour rapid-reaction communications and
Foundation has ongoing projects that aim to improve
transport service. The service is available in Port
education and health in schools. Vodafone is working
Moresby, Lae, Rabaul, Madang, Mount Hagen and
with charity partners to bring their mobile service
Goroka.
program to primary and secondary schools. Digicel had
The second service in PNG is Haus Lain. It was launched launched a tablet learning project to enhance learning
in 2012 by Population Services International, a global in the region by handing out tablet to students to use
health organization, with the support of the Australian for free.

32. Unstructured Supplementary Service Data (USSD)

Contribution to economic and social development in the Pacific Islands | 43

 Pacific Islands Mobile Economy 2015

3 Policy: Supportive
and collaborative
action
3.1 Spectrum a scare resource requiring
careful management
Realising the enormous socio-economic potential of coordination is crucial. Spectrum allocations need to
mobile broadband connectivity, both in the Pacific be harmonised internationally to enable the industry
Islands and more generally across the developing to realise economies of scale and deliver affordable
world, will depend on the timely release of suitable handsets and equipment. Governments should,
spectrum. Data traffic is set to grow by a factor of up wherever possible, adopt internationally agreed band
to ten times over the next five years33, as more people plans, thereby reducing the cost of developing and
go on line and businesses go digital. Without sufficient manufacturing a wide range of mobile equipment,
spectrum, mobile calls will not connect, web pages from network base stations to handsets and tablets.
will not load, apps will not update and videos will Although mobile devices can support multiple bands,
freeze. In many countries, sparse fixed-line networks each additional band increases the device cost,
mean the majority of the population is solely reliant on reduces the receivers sensitivity and drains the battery.
mobile connectivity to access the vast repository of Operators require large blocks of contiguous spectrum
information and services available over the internet. in order to provide mobile broadband connectivity on a
cost-effective basis.
The International Telecommunication Union (ITU)
estimates between an additional 1340MHz and Moreover, spectrum needs to be licensed in a way that
1960MHz of spectrum will be required to meet does not curb mobile operators ability to invest in new
the anticipated global demand in 2020. 2015 is an networks and services. Using spectrum licenses to raise
important year in this regard, seeing both the ITUs as much cash as possible can be counterproductive in
global deadline for the digital switchover (DSO) the mid-term. Levying excessive license fees on mobile
(June 17th), as well as the World Radiocommunication spectrum will reduce the money available for network
Conference in (WRC-15) in Geneva. deployment, increase consumer prices and limit the
potential economic benefits of mobile broadband.
While management of this scarce resource is primarily
the role of national governments, international

33. http://www.cisco.com/c/en/us/solutions/collateral/service-provider/visual-networking-index-vni/white_paper_c11-520862.html

44 | The importance of spectrum and national broadband plans

 Pacific Islands Mobile Economy 2015

3.1.1 Digital dividend spectrum

Digital dividend spectrum (in the 700MHz band) is of band plan from the 6th APT Policy and Regulation
particular use for cost-effective build-outs of mobile Forum for the Pacific.34 PNG was also one of the very
broadband networks, particularly in rural areas, as it first countries to commercially release the 700MHz
requires fewer base stations to provide coverage as spectrum. Spectrum harmonisation also helps to ensure
compared to higher frequency bands. Freeing this global economies of scale and will reduce interference
spectrum for mobile use, through accelerating the issues along borders and promote international
switchover from analogue to digital television, and then roaming.35
licensing this spectrum for mobile use, will be of great
When considering the DSO, the Pacific Islands should
importance for the Pacific Islands if the region is to reap
assess how much spectrum the broadcasting industry
the full potential of mobile broadband connectivity for
will need in the future, with digital compression
its local populations.
allowing more efficient use of bandwidth. To avoid
There is growing momentum behind the adoption of further TV channel replanning in the future, the GSMA
the APT700 (Asia Pacific Telecommunity 700MHz) recommends that administrations assess likely future
band plan across the broader Asia Pacific and Latin requirements for digital channels in the VHF and lower
American region, particularly the policy commitment part of UHF during the DSO.
to work towards implementation of the APT700MHz

34. http://www.aptsec.org/sites/default/files/2013/08/PRFP-6-OUT-02-PolicyStatementr3.docx
35. https://gsmaintelligence.com/research/2013/5/asias-apt700-band-plan-leads-the-way-to-large-scale-4g-lte-growth/387/

The importance of spectrum and national broadband plans | 45

 Pacific Islands Mobile Economy 2015

3.1.2 The case for future spectrum identification

at WRC-15

The outcome of the WRC-15 will be the single most An IMT identification in a portion of the C-Band will
important factor determining the future availability of give regulators the tools to manage this challenge
affordable, ubiquitous, high-speed mobile broadband when it emerges without it they will struggle to
services. The event will see administrations from around prevent a network slowdown. However, this is not a
the world agree on changes to international spectrum zero-sum contest between mobile and satellite services,
allocations, and associated regulatory provisions, with as these technologies and markets evolve regulators
a major focus on making additional bands available for can protect the interests of both to create a win-win
potential mobile broadband use. scenario for citizens.
In the absence of new spectrum allocations at WRC- The Pacific Islands may also need an alternative to
15, governments will find it difficult to release enough the C-band to provide capacity in the future to cater
spectrum to accommodate the ongoing rise in mobile for demand from both domestic usage and tourism.
traffic, resulting in a poorer experience for end-users The 2.7-2.9GHz band is a realistic and attractive
and potentially more expensive mobile services. It takes option, with several countries from Europe, APAC and
about eight to 10 years to re-allocate, re-assign and re- Africa supporting its identification for IMT. The GSMA
license spectrum, so WRC-15 will play a pivotal role in recommends that the 2.7-2.9GHz band is also identified
avoiding a capacity crunch in the next decade. for IMT at the WRC-15, so that the ecosystem can be
further developed. The Pacific Islands should also
The GSMA has identified four frequency ranges within
consider supporting the proposal for a sub-700MHz
which the spectrum requirement for future mobile
UHF IMT identification, as proposed in the USA and
broadband could be best satisfied and where existing
Canada. This band represents the most cost efficient
services could continue to use parts of the bands
way to cover the whole islands with mobile broadband
through coordination and spectrum planning. These
connectivity. Other regions can then benefit from lower
bands, which include a portion of the C-Band (3.4-
price equipment when capacity becomes a problem
4.2GHz), should be identified for International Mobile
and these alternative spectrum bands are required.
Telecommunications36 (IMT) at WRC-15. The C-band
is one of the few bands where a harmonised portion Identifying a further 600-800MHz for potential future
could be made available for potential future mobile mobile broadband use at WRC-15 will ultimately benefit
broadband use worldwide and which is large enough to the Pacific Islands, despite its low level of mobile
support very high levels of data traffic and the fastest data usage compared with some other markets. As
data rates. highlighted earlier in this report, the Pacific Islands are
still in the early stages of LTE deployments, although
Governments in the Pacific Islands may be reticent to
the rate of adoption is already accelerating. The
support an identification because local mobile data
resultant growth in data traffic means that new mobile
demands are less intense and the C-Band is heavily
spectrum will ultimately be necessary in the future in
relied upon for fixed satellite services. However, it is
the region. The developed markets which license these
important to recognise that an IMT identification at
bands in the near-term will create the economies of
the international level will not impact C-band satellite
scale that will allow Pacific Islanders to benefit from a
services in the Pacific Islands for as long as they are
wide range of low cost devices when the spectrum is
deemed necessary.
used for mobile services at a later date.

36. An IMT identification refers to a specific frequency range in a band that is designated for potential use by compatible mobile broadband technologies, including all 3G and 4G networks.

46 | The importance of spectrum and national broadband plans

 Pacific Islands Mobile Economy 2015

3.2 The importance of national

broadband plans

By mid-2014, there were 140 national broadband plans found that the introduction or adoption of a broadband
in force in countries around the world, according to plan can lead to 2.5% higher fixed broadband
a report by the Broadband Commission entitled the penetration, and 7.4% higher mobile broadband
State of Broadband 2014.37 These plans take different penetration, on average. The difference in those figures
forms some are enshrined in legislation, others are reflects the key role wireless technologies, which can
essentially a policy framework/strategy and others are be deployed quickly and at relatively low cost, typically
realised through a series of regulations. They also vary play in enabling countries to achieve their national
in scope some plans are focused solely on broadband, broadband goals.
while others encompass IT, as well as connectivity,
The ITU has helped a number of countries in the region
and constitute a comprehensive roadmap towards an
to develop national broadband plans, including Fuji,
Information Society.
and in 2014 helped both the Marshall Islands and
Although many national broadband plans are in Vanuatu to further develop their plans.
their formative stages, there are signs that they are
producing results. The Broadband Commission has

3.2.1 Engaging industry in a national

broadband plan

Realising the full potential of broadband to increase responsibility for its implementation. This coordinating
national competitiveness and empower citizens agency needs to be empowered to work with all the
depends on a strong partnership between government, relevant branches of national and local government
industry and other stakeholders. Ideally, governments to implement policies, address related legislation and
will engage in a consultative, participatory approach specific obstacles, such as cumbersome planning
that involves all key stakeholders in the development of processes. The government will also need to make
a national broadband plan and the associated policy- appropriate funds available and measure progress at
making process. regular intervals.
To ensure a national broadband plan is more than a Policy makers should also consider demand-related
set of aspirations, a government needs to create a factors. For example, they need to ensure that citizens
structure and process that will enable its provisions have the skills to make full use of broadband networks
to be implemented. Ideally, the plan will be owned and that there is a broad selection of digital content
and championed by a high-level ministry and will available in local languages.
be overseen by a government agency with clear

37. http://www.broadbandcommission.org/publications/Pages/SOB-2014.aspx.

The importance of spectrum and national broadband plans | 47

 Pacific Islands Mobile Economy 2015

3.2.2 Four guiding principles for a national

broadband plan
In order to ensure that a country and its citizens can realise full benefits of a national broadband plan, there are
four key principles that should guide the plan:

1. Ensure availability of suitable and harmonised spectrum: in many countries, mobile has already emerged
as the dominant technology for internet access, and it is often too expensive or impractical to provide fixed
broadband connectivity. As a result, policy makers should explicitly recognise the central role of mobile
broadband technologies in delivering national broadband plans, which in turn depends on the availability of
suitable spectrum.

2. Keep costs down: As broadband services are crucial to the competitiveness of a country, they should not be
subject to sector-specific taxes, levies and other fees that increase operators costs and deter investment and
take-up of the services.

3. Remove barriers to the deployment of infrastructure: A national broadband plan needs to consider whether
existing legislation or regulations, such as those relating to electromagnetic frequency (EMF) exposure, may
prevent it from achieving its goals.

4. Ensure sufficient competition: A national broadband plan needs to contain provisions to ensure that the
telecoms market is sufficiently competitive to fuel innovation and drive efficiency.

Wake Hawaiian Islands

Northern Johnston Atoll
Mariana
MARSHALL
ISLANDS
Guam M I C
R
Caroline
O
N Kingman Reef
Palmyra Atoll
E
FEDERATED STATES
PALAU
OF MICRONESIA Gilbert Howland S Kiritimati
Baker I Jarvis
PAPUA NEW Phoenix
A
GUINEA NAURU
INDONESIA TUVALU KIRIBATI
SOLOMON Line
ISLANDS
M Tokelau

E SAMOA Tuamotu Arch.

L Wallis & Futuna Cook Is.
Society A
A VANUATU
FIJI American I
N Samoa
E S S
I A
Niue Tahiti
E
TONGA N
New Caledonia
L Y Pitcairn

AUSTRALIA P O Tubuai

French Polynesia
Norfolk Kermadec

NEW ZEALAND

48 | The importance of spectrum and national broadband plans

 Pacific Islands Mobile Economy 2015

3.2.3 The example of Fiji

Beginning in 2007, the government looked to liberalise of mobile services and so achieving the broader goals
the telecoms sector in Fiji, beginning with the removal of digital inclusion. A number of fiscal and excise duties
of all exclusivities in the telecom sector. An agreement have been removed over recent years on for examples
was signed in January 2008 that led to a number of computers and computer parts. For the mobile sector
changes in the industry: in particular, there was a reduction of import duty on
smartphones in January of 2011, with the rate falling
Digicel became the second mobile operator in the
from 32% to 5%.38
country when it launched services in October of
2008; Fiji adopted its national broadband policy in 2011, with
the plan developed with the assistance of the ITU. In
Fiji International Telecommunications Limited,
recent years the country has seen significant progress
FINTEL, saw its exclusivity over the international
in developing its broadband roll out and the overall
gateway end in July 2009, with a second player
level of ICT development in the country, helped by the
entering the market in October 2010;
enabling legislation and the relatively early adoption of
Telecom Fiji Limited ended its monopoly on the fixed a national broadband plan.
line network in February 2011, although new entrants
As a result of a broad range of actions, Fiji was well
have yet to emerge in this market segment.
prepared for the acceleration in broadband adoption
The changes in the telecom market were enabled by that the country has seen over recent years. However,
the Telecommunications Promulgation 2008, which much remains to be done to bring connectivity, and
set the policy relating to the release of exclusivities particularly mobile broadband, to the still unconnected
and also provided for the creation of an independent population in the country.
regulator for the telecommunication sector, the
The International Telecommunication Union (ITU)
Telecommunications Authority of Fiji (TAF). The TAF
regularly assesses the level of ICT development of its
has the authority to deal with licensing, technical
members and ranks countries on a composite index,
regulation, spectrum, and consumer concerns.
the ICT Development Index (IDI), which includes
The government chose to issue 15 year licences that measures of access, usage and skills. In the most recent
allowed operators to offer a broad range of services. 2014 publication39, Fiji was highlighted as one of the
The use of these open licences and assistance from most dynamic countries in terms of the improvement
the Pacific Island Financial Inclusion Programme saw in its ranking between 2012 and 2013. Fiji saw an
Vodafone become the first operator in the South Pacific improvement of 12 places in its ranking and is currently
to launch mobile money services in June 2010, closely ranked at 91st, helped by the significant growth in
followed by Digicel, with assistance from the GSMAs mobile broadband penetration that the country has
MMU team. seen. Fiji also benefited from increased regional
Tax is an important component of national ICT internet connectivity with the completion of the Tonga
strategies, and high levels of sector-specific taxation cable, connecting Fiji and Tonga.
can be a major obstacle to improving the affordability

38. http://www.itu.int/ITU-D/treg/broadband/MinicasestudyBBFiji.pdf
39. http://www.itu.int/en/ITU-D/Statistics/Documents/publications/mis2014/MIS2014_without_Annex_4.pdf

The importance of spectrum and national broadband plans | 49

 Pacific Islands Mobile Economy 2015

3.3 Building regulatory capacity in the region:

the potential role of the GSMA

The mobile industry is constantly innovating and regulatory approaches. There can be particular
adapting to a variety of pressures, including huge challenges in this for small island developing states,
growth in demand for mobile data, a continuous which may in some cases lack the resources and human
cycle of technology upgrades and shifting business capital to manage these challenges effectively.
conditions due to the emergence of over-the-top
As the global association of mobile network operators,
players, as well as the growing importance of mobile as
the GSMA closely tracks changes in these areas, and
an enabler for connected living and digital and financial
the effects they have worldwide. Using this knowledge,
inclusion.
the GSMA has created a range of high-quality short
Policymakers and regulators play a key role in shaping training courses that offer unique insights into the
the way the industry responds to these issues, so it latest industry, policy and regulatory thinking.
is vital they keep pace with the latest developments
in technology and the business environment, and
understand the implications of different policy and

50 | The importance of spectrum and national broadband plans

Pacific Islands
THE Mobile
MOBILE Economy
ECONOMY 2015
 To download Pacific Islands Mobile Economy 2015
report please visit the GSMA website at
www.gsmamobileeconomy.com

GSMA Head Office

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