View profile

Getting Less for More

The Village Explainer
Getting Less for More
By Dan McGarry • Issue #37 • View online
The Village Explainer is a semi-regular newsletter containing analysis and insight focusing on under-reported aspects of Pacific societies, politics and economics.

A Ni Vanuatu woman checks her phone at a family gathering.
A Ni Vanuatu woman checks her phone at a family gathering.
A trio of internet experts recently published a piece on DevPolicy showing no downward trend in internet prices for PNGeans despite tens of millions of dollars in infrastructure development by China and Australia.
I’d act surprised, but I’m not. That said, I don’t want to want to sound cynical either.
I don’t want to, but it’s hard to be ebullient about a regional information landscape that has only worsened in the last half dozen years, if it’s changed at all.
In 2014, I observed that the developed and developing worlds were actually on diverging paths where internet access and affordability is concerned. I came to the same conclusion a couple of years ago, right about the time when Digicel began to look like it wasn’t going to make the running.
It’s a classic example of the Red Queen problem, with developing nations having to run flat out just to avoid losing more ground to the rest of the world. In Alice in Wonderland, the Red Queen tells Alice, “you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!”
Not only does internet cost substantially more in the Pacific islands than it does in Australia or New Zealand, it is several times less affordable, when measured as a percentage of disposable income.
A 2019 price survey by the ITU states that “The global average price of a mobile data basket of 1.5 GB shrank from 8.4 per cent of GNI [per capita] in 2013 to 3.2 per cent in 2019, a CAGR of almost -15 per cent.”
As the ANU researchers show, that’s not what’s happening in Papua New Guinea. Admittedly, PNG is one of the more disheartening examples in the Pacific. In fact it’s one of the worst in the world. Fiji, Vanuatu, Samoa and Tonga have all seen big improvements in pricing and availability in recent years. It’s reaching the point where people in our cities can be just as glued to their phones as any other urban dweller.
But things are hardly ideal.
Dollar for dollar, the difference between regions for mobile voice and data packages might not seem wildly divergent.
But when you consider what a ‘basket’ consists of, things look different. They’re designed to be inclusive. In other words, they’re defined by their lowest common denominator, but they vary wildly on the top end. Here’s where the thresholds are set:
Many Pacific island data bundles barely meet those criteria. Most developed nation exceed them by a huge margin. So they may seem comparable, dollar for dollar, but they emphatically are not when the contents of each bundle are examined.
Let’s take a few examples. According to the ITU cost report, a New Zealander can purchase a somewhat chintzy voice/data plan for about US $15/month. It features 200 minutes of talk time, 500 SMS messages and 1.5 Gb data. In Australia, baseline prices are higher - about US $30/month - but voice and text are unlimited and the plan includes ten times as much data.
Papua New Guinea is ranked 165th globally for mobile voice and data prices, with a reference package costing over US $60/month and offering 140 minutes of voice calling, a paltry 70 SMS messages (do you know anyone who sends less than two texts a day?), and a modest 2.3 Gb in data.
There are obvious disparities between richer and poorer regions, globally.
Dollar for dollar, internet costs don’t show the wild variation they used to even half a decade ago. What that dollar actually buys you though, makes an apples to apples comparison difficult, and could even be misleading.
When you measure affordability, however, the differences are stark:
Internet in LDCs and in sub-Saharan Africa is so unaffordable that it is simply not the same commodity. Network effects work differently when the commodity is a luxury.
The difference between the developing and the developed world is frankly shocking.
A further irritant: We can’t access the same services that most people in the developed world have come to rely on. Not only is it nigh impossible to get a package delivered from Amazon, in many cases, we can’t even sign up. Google, Apple, Amazon, Microsoft and most payment processors offer limited to no support for people who don’t already have the ability to trade in a dozen or so currencies.
And that’s almost everyone in the Pacific.
Banks are running away from us, not toward us. Accessing foreign currency is harder now than it’s ever been. So hard, in fact, that some Pacific nations are on the brink of financial crisis. But that’s a story for another day.
Amalgamated Telecom Holdings, or ATH, has brought the Vodaphone brand to the Pacific. Their subsidiary, ATH International Venture Pte. Limited, recently announced a finance agreement with the ADB for a greenfield rollout into Papua New Guinea. The DevPolicy analysis notes that this adds to investments in American Samoa, Cook Islands, Fiji, Kiribati, Samoa and Vanuatu.
Their presence has been a stabilising influence, and a timely one in light of Digicel’s global travails.
But this is Red Queen progress. With developments like this, we run incrementally faster, only to watch the developed world recede just a little more slowly over the horizon.
It buys us time, but doesn’t forestall an outcome that is appearing increasingly inevitable: The Pacific islands will one day soon have an internet so different from the rest of the world’s that it might as well be no internet at all.
Did you enjoy this issue?
Dan McGarry

The Village Explainer is a semi-regular newsletter containing analysis and insight focusing on under-reported aspects of Pacific societies, politics and economics.

If you don't want these updates anymore, please unsubscribe here.
If you were forwarded this newsletter and you like it, you can subscribe here.
Powered by Revue
Dan McGarry - Port Vila, Vanuatu