w14 minges

Markets, Monopoly, Mobile & Morals:Small Island Developing States Case Studies : Markets, Monopoly, Mobile andamp; Morals: Small Island Developing States Case Studies Presented by: Michael Minges, ITU Opinions expressed may not reflect the views of the International Telecommunication Union or it members Pacific Telecommunications Council 11-14 January 2004 Honolulu, Hawaii USA


Small Island Developing States (SIDS) & Telecoms : Small Island Developing States (SIDS) andamp; Telecoms 'The vulnerability of SIDS are also non-natural, economic and external in nature. These are compounded by economic constraints, such as small domestic markets with small natural and human resource bases, resulting in lack of economies of scale, competitiveness, diversification and hence investment opportunities.' — Minister for Foreign Affairs andamp; International Trade, Saint Lucia Moral: Conventional wisdom that has been rarely tested Percentage of countries SIDS andlt; 1.2 million population


2003 ITU Case StudiesOne island state from each region : 2003 ITU Case Studies One island state from each region Oceania: Fiji Asia: Maldives Africa: Mauritius Americas: St. Lucia


Demographics - 2002 : Demographics - 2002


Market environment - 2002 : Market environment - 2002


Mobile markets : Mobile markets Coverage: % of population that can receive signal Penetration: % of population that are actually subscribing Effective penetration: % of population that subscribe adjusted for coverage End 2002: All except Mauritius with one operator Bottlenecks: Coverage (Maldives andamp; Fiji), Pricing (St. Lucia), Regulatory (Mauritius (RPP)) Moral: Coverage important


Mauritius missed opportunityTelephone subscribers per 100 inhabitants : Mauritius missed opportunity Telephone subscribers per 100 inhabitants May ’89: Emtel launches first mobile network in Southern Hemisphere. Receiving Party Pays. Mar ’96: Cellplus enters market Nov. ’99: Prepaid launched Moral: Competition without regulatory oversight does not always deliver expected benefits


MaldivesMobile subscribers per 100 inhabitants : Maldives Mobile subscribers per 100 inhabitants 1997: Analogue mobile launched 1999: Conversion to GSM 2001: Prepaid launched Moral: Monopoly can generate high growth when aligned with government objectives


FijiTelephone subscribers per 100 inhabitants : Fiji Telephone subscribers per 100 inhabitants 1994: GSM launched 1999: Prepaid launched Moral: Right technology alone not sufficient


St. Lucia’s mobile history : St. Lucia’s mobile history 1992: Analogue AMPS launched as Boatphone. Primarily aimed at marine market. Receiving Party Pays (RPP). 1995: 300 land clients andamp; 2 cell sites 1999: Prepaid andamp; digital TDMA launched. 17 cell sites. 2002: CPP andamp; SMS introduced. 2 new licenses awarded. Candamp;W begins to subsidize handsets and other promotions. 27 cell sites 2003: Digicel andamp; ATandamp;T enter with GSM. Candamp;W launches GSM. All launch GPRS. Telephone subscribers per 100 inhabitants Moral: 2 is good, but 3 even better!


St. Lucia mobile scene : St. Lucia mobile scene


ECTEL : ECTEL East Caribbean Telecommunication Authority (ECTEL) Regional 'regulator' Negotiate on behalf of member countries Achieved early termination of Candamp;W monopoly Facilitated mobile competition through regional licensing Moral: A regional telecom authority can have more impact on negotiations with incumbents and attracting investment than a single small country


Regional synergy, fibre cable : Regional synergy, fibre cable Digicel (St. Lucia) runs roaming operations from Jamaica Candamp;W (St. Lucia) runs Internet gateway from Antigua Vodafone (Fiji) runs billing from Australia Moral: Small market more attractive if investor has other operations in region and linked by fibre optic


Years after launchMobile subscribers per 100 inhabitants : Years after launch Mobile subscribers per 100 inhabitants Moral: Act sooner to create pro-growth environment.


Tourism & telecoms : Tourism andamp; telecoms Tourism major industry Makes telecom more attractive because creates larger ‘virtual’ market Roaming growing source of revenue. Roamers pay much more. Roaming agreements: Mauritius: 236 operators, 104 countries Maldives: 95 operators, 50 countries Fiji: 73 operators St. Lucia: 68 operators Moral: Factor tourism into telecoms.


Mobile technology : Mobile technology 2.5 / 3G important for data applications MMS postcards could turn into major tourist application WiFi also relevant Moral: Keep up with technology


Summary : Summary St. Lucia dramatically shows impact of mobile competition, particularly entry of 3rd operator Mauritius has lost its early lead in mobile due to competitive constraints, inability to keep up with technology and RPP Maldives proves exception to rule with reasonable penetration andamp; coverage despite monopoly and difficult geographical situation Fiji has done less well: Low coverage and penetration; high tariffs Moral: Align telecom goals with national goals


Message for incumbents : Message for incumbents Justification for monopoly harder and harder to defend; better to get on board now Technology evolution important for protecting market share Market is bigger than thought; incumbent benefits from advertising and interconnection Cooperate regionally with concrete objectives (e.g., fibre optic cable)


Further research : Further research Tourism and telecoms Competition impact Data applications Impact of regional approach


Digital Access Index (DAI) : Digital Access Index (DAI)


Slide21 : Complete case studies for Fiji, Maldives, Mauritius andamp; St. Lucia to be available at: http://www.itu.int/ITU-D/ict/cs