Tag: markets

Universal Access

Dan McGarry1 Comment

On Wednesday of this week, Minister Edward Nipake Natapei and Australian High Commissioner John Pilbeam jointly announced the creation of a telecommunications Universal Access Fund. Designed to ensure that communications services reach all parts of Vanuatu, the fund was rolled out with an initial contribution from AusAID of 215 million vatu.

The idea is to allow market forces to work in the vast majority of the country, providing mobile telephone services on a for-profit basis. Digicel’s license terms state that it must make its service available to 85% of the population.

Mobile telephone service costs are tiny compared to traditional land lines. Infrastructure is minimal, and it’s not as susceptible to damage by the elements. Digicel is confident that it can profitably provide services over such a wide area. They’re so confident that they’ve ponied up a significant chunk of cash as a performance bond.

In time we’ll see TVL and smaller, ‘boutique’ operators entering these once marginal markets as well. But there will always be areas in Vanuatu that simply can’t be serviced profitably. This is where government enters the scene. They’ve designated a basket of money that will ensure that everyone from Aneityum to the Torres islands has access to mobile phone services.

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The Honeymoon's Begun

Dan McGarry

On Tuesday this week, Parliament agreed to put an end to the telecommunications monopoly in Vanuatu. This news has been greeted with widespread enthusiasm. People throughout Vanuatu believe that this means the days of over-priced, low-quality telephone and Internet services are finally over. But is this really the case?

The answer is mostly yes, with a few important qualifications. It’s almost certain that costs will decrease, service coverage will increase and quality will improve. It’s also quite likely that new kinds of services will be rolled out as well. But many of the environmental factors that constrained telecommunications in the past still remain.

With competition guaranteed. The major telecoms companies are in a beauty contest now. Customers in Vanuatu will shortly find themselves being wooed by players old and new, offering all kinds of exciting services, prices and promotions.

Let’s look into our crystal ball and try to see what things will be like over the next year or so.

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