bula internet f ict case study - itu: committed to

BULA INTERNET:

FIJI ICT CASE STUDY

June 2004

I n t e r n a t i o n a l T e l e c o m m u n i c a t i o n U n i o n

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This report was prepared by Michael Minges and Vanessa Gray. It is based on researchcarried out from 26th June to 2nd July 2003 as well as articles and reports noted in thedocument. The assistance of the Ministry of Communications and Abel Caine, JaleCuruki and Josua Turaganivalu was indispensable. Equally, the report would not havebeen possible without the cooperation of Fijian organizations. The list of organizationsmet is attached in the annex to this report.

The report is one of a series examining the Internet in developing nations. Additionalinformation is available on the ITU’s Internet Case Study web page at

http://www.itu.int/ITU-D/ict/cs.

The report may not necessarily reflect the opinions of the ITU, its members or thegovernment of the Republic of the Fiji Islands.

The title refers to the popular Fijian greeting generally translated as “Hello”.

© ITU 2004

iii

Contents

1. Introduction ........................................................................ 1

2. Background ......................................................................... 3

2.1 Overview ............................................................................3

2.2 Population ...........................................................................3

2.3 Economy .............................................................................4

2.4 Quality of Life ......................................................................5

2.5 Recent history and politics .....................................................5

3. Pervasiveness ...................................................................... 8

3.1 Telephony ...........................................................................8

3.2 Computers and Internet ...................................................... 12

3.3 Mass media ....................................................................... 13

4. Sector absorption .............................................................. 15

4.1 Business ........................................................................... 15

4.2 Government ...................................................................... 15

4.3 Education .......................................................................... 15

4.4 Health .............................................................................. 17

5. Connectivity ....................................................................... 20

5.1 International backbone ....................................................... 20

5.2 Domestic backbone ............................................................ 21

5.3 Exchange points ................................................................. 22

5.4 User access methods .......................................................... 22

6. Market ............................................................................... 24

6.1 Overview .......................................................................... 24

6.2 Fixed networks .................................................................. 25

6.3 Mobile services .................................................................. 26

6.4 Internet access .................................................................. 27

7. Information society ........................................................... 30

7.1 Economic impact ................................................................ 30

7.2 Social impact ..................................................................... 30

7.3 Knowledge base ................................................................. 31

7.4 e-government .................................................................... 32

7.5 e-business......................................................................... 35

8. Conclusion ......................................................................... 38

8.1 A sense of urgency ............................................................. 38

8.2 The small market argument ................................................. 38

8.3 Falling behind .................................................................... 41

8.4 Recommendations .............................................................. 42

Annex 1: Acronyms ................................................................. 49

Annex 2: Meetings .................................................................. 51

Annex 3: ICT Satistics ............................................................. 52

Figures

2.1 Map of Fiji ...........................................................................3

2.2 Fiji’s economy ......................................................................4

3.1 Universal telephone service in Fiji ...........................................8

3.2 Fiji mobile market .............................................................. 11

5.1 Southern Cross .................................................................. 20

5.2 International Internet bandwidth capacity and pricing ............. 21

6.1 Ownership of Fiji's telecom sector ........................................ 24

6.2 International telephone price and traffic trends ...................... 26

6.3 Fiji's telecommunication market ........................................... 27

6.4 Internet hosts and domains ................................................. 28

7.1 Telecoms and the economy.................................................. 30

7.2 Fiji online .......................................................................... 33

7.3 Three thrusts of Fiji's ICT Policy ........................................... 35

8.1 Where Fiji stands ............................................................... 41

8.2 Fiji in the DAI .................................................................... 42

Tables

2.1 Population indicators ............................................................4

2.2 Ranking Fijian human development ........................................5

4.1 Fiji at school ...................................................................... 16

8.1 Competition in small countries ............................................. 39

Boxes

3.1 Measuring household ICT ......................................................9

3.2 Rotuma ............................................................................. 10

4.1 The University of the South Pacific- successful distance learning ..... 18

7.1 Strategic Development Plan 2003-2005 ................................ 34

8.1 How small is too small? ....................................................... 40

8.2 State of the Internet in Fiji .................................................. 43

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1

1. Introduction

1. Introduction

Information and communicationtechnologies (ICT) are an importantissue for members of the InternationalTelecommunication Union (ITU), theUnited Nations’ specialized agency fortelecommunications. In that respect,the ITU has embarked on a series ofcase studies researching the Internetin different nations.1 This study looksat the diffusion of the Internet in theRepublic of the Fiji Islands. It toucheson specif ic problems includingisolation and undersized markets thatsmall island developing states such asFiji face in adopting information andcommunication technology.2 Thestudy also examines how Fiji isevolving into an information society,particularly relevant in the context ofthe World Summit on the InformationSociety (WSIS), the first phase ofwhich took place in Geneva,Switzerland in December 2003.3

The organization of this report is basedon a framework developed by theMosaic Group4 for characterizing thestate of the Internet in an economy.The scope has been widened toincorporate telecommunicationnetworks such as the fixed-line andmobile telephone networks. Mosaicconsiders six factors as follows:

• pervasiveness: a measurebased on users per capita and the

degree to which non-techniciansare using the Internet.

• geographic dispersion, ameasure of the concentration ofthe Internet, from none or a singlecity to nationwide availability.

• sector absorption: a measureof the degree of utilization of theInternet in the education,commercial, health care andpublic sectors.

• connectivity infrastructure: ameasure based on internationaland domestic backbonebandwidth, exchange points, anduser access methods.

• organizational infrastructure:a measure based on the state ofthe Internet Service Providerindustry and market conditions.

• sophistication of use: ameasure characterizing usagefrom conventional to highlysophist icated and drivinginnovation.

The report also considers other factorsnot included in the above frameworksuch as the evolution to an informationsociety, pricing, and governmentpolicies.

2

Fiji Internet Case Study

1

Resolution 31, “Telecommunication infrastructure and information and communication technologies for socio-economic and cultural development” calls upon the ITU to “organize, conduct or sponsor necessary studiesto bring out, in a different and changing context, the contribution of ICTs to overall development.” ITU. FinalActs of the Plenipotentiary Conference (Marrakesh, 2002). 2003.

2

The ITU notes, “that small island nations and communities face particular problems in bridging the digitaldivide.” See Resolution 129 (Marrakesh, 2002) in ITU. Final Acts of the Plenipotentiary Conference(Marrakesh, 2002). 2003. Small island developing states (SIDS) form an official grouping in the UN system.For a list of the 45 SIDS see http://www.un.org/special-rep/ohrlls/sid/list.htm. [Accessed 18 June 2004].

3

The second phase of the Summit will take place in Tunis, Tunisia, in 2005. For more on WSIS see the website at: www.itu.int/wsis/index.html. [Accessed 18 June 2004].

4

Since the Global Diffusion of the Internet (GDI) project’s inception in 1997, the Mosaic Group has studied theInternet in nearly 30 countries. See http://mosaic.unomaha.edu/gdi.html. [Accessed 18 June 2004].

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2. Background

2.1 Overview

The Republic of the Fiji Islands is locatedin the Pacific Ocean, midway betweenthe Equator and the South Pole. Theisland group is situated 3’000 kilometresnortheast of Sydney, 2’000 kilometresnorth of Auckland and 5’000 kilometressouthwest of Hawaii (Figure 2.1).Covering a land area of 18’333 squarekilometres, Fiji comprises 332 islandsof volcanic origin of which around onethird are inhabited. The name of thecountry appears to be derived from Viti,in reference to the largest islandpronounced Fisi by Tongans and thenreferred to as Fiji by Captain JamesCook, the British explorer.

2. Background

Fiji is a cultural mosaic, with a blendof Melanesian, Polynesian,Micronesian, Indian, Chinese andEuropean influences. During the 19th

century Fiji was the trade centre ofthe South Pacific and in 1874 theBritish claimed it. Tens of thousandsof indentured Indian labourers werebrought to Fiji under British colonialrule, mainly to work on the sugarplantations.

Fiji’s two major islands are Vanua Levuand Viti Levu. Suva, the capital, aswell as Lautoka and Nadi, the othermain urban centres are located on VitiLevu. Administratively, Fiji consists of

14 provinces.

2.2 Population

According to the 1996 Census,Fiji had a population of 775’000,spread over about one third ofthe islands. The populationgrowth rate has dropped fromtwo per cent in the year 1976-1986, to 0.8 per cent between1986-1996. It is estimated thatby July 2002 the population hadincreased to 820’000. Fiji has anaverage household size of5.3 people with some155’000 households. Thecountry has a population densityof roughly 44 persons per squarekilometre. Almost 80 per cent ofthe population live on the twomajor islands and 53.6 per centof the population lives in ruralareas. Fiji has a relatively youngpopulation, with over 35 per centunder the age of 15 and only5.1 per cent above the age of 60.Almost 55 per cent of thepopulation is below the age of 25(Table 2.1).

According to the last census51 per cent of the population wasethnic Fijian and 44 per cent was

Figure 2.1: Map of Fiji

Source: www.reliefweb.int/w/map.nsf/home.

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Figure 2.2: Fiji’s economy

Distribution of foreign exchange earnings, 2001 (left) and percentage change of GDPand tourist arrivals (right)

Note: In the right chart, foreign exchange earnings defined as exports plus balance of payments servicereceipts.Source: ITU adapted from the Ministry of Planning and National Development.

of Indian descent. Other ethnic groupsinclude Rotuman, Chinese, Europeanand other Pacific Islanders. More thanhalf of Fiji’s population (53 per cent)are Christians, about 38 per cent areHindus and eight per cent are Muslim.

Fiji’s official language English is usedin government, business and school.However most Fijians are bilingual asthey also speak one of local languagesat home. The indigenous Fij ianlanguage is most widely spoken andconsists of several dialects. The Indiancommunity speaks the hybridHindustani Fijian.

2.3 Economy

Fiji is one of the most industrializedPacific Island countries. Its 2002 percapita Gross National Income ofUS$ 2’160 was the highest of the eightfully independent Pacific Island states.The World Bank classifies Fiji as aLower Middle Income economy.

Its open economy is relativelydiversified. Services accounted for67 per cent of Gross Domestic Product(GDP) in 2002 with the remainder splitalmost equally between the primaryand secondary sectors. The main

Source: Fiji Islands Statistics Bureau.

Total population 820'000 (2002)

Urban population (%) 46 (1996 Census)

Population Density (per/km2) 44 (1999)

Age distribution, 1996, %:

Below 15 years 3515-59 years 60Above 60 5

Table 2.1: Population indicators

export items are sugar and garments(accounting for half of exports in2002) while tourism is a significantsource of foreign exchange with some400’000 tourists generatingF$ 568 million in 2002 (Figure 2.2,left).

Fiji’s economic growth has declinedfrom an average of eight per cent ayear in the 1970s to under three percent in the 1980s and 1990s. The dropin economic growth has exasperateddisparities between indigenous and

Sugar

10%

Garments

14%

Other

53%

Tourism

23%

Foreign exhange earnings, 2001

-40

-30

-20

-10

0

10

20

30

1998 1999 2000 2001 2002

GDP

Tourist arrivals

Percentage change

5

2. Background

other communities and between ruraland urban areas. Around a quarter ofthe population is estimated to be livingin poverty. Although ethnic Fijians haveretained ownership of over 80 per centof the total land area, they areunderrepresented in the businesssector.1 According to the 1996 Census,ethnic Fijians’ average weeklyhousehold income was 20 per centbelow that of Indo-Fijians and 13 percent lower than the national average.

The military coup in May 2000 hadserious repercussions on Fij i ’seconomy. Gross domestic product(GDP) fell by 3.2 per cent, sugarcaneand garment production droppedsharply and the number of touristsplunged 28 per cent (Figure 2.2,right). Many workers lost their jobsand emigration rose sharply with themajority of Indian descent, many ofthem highly skilled professionals.

Since the end of political crisis, theeconomy has made a significantrecovery. GDP grew by 3.8 per centin 2002, and is expected to havereached five per cent during 2003.Tourist arrivals are almost back to pre-coup levels.

2.4 Quality of Life

The United Nations DevelopmentProgramme (UNDP) ranked Fiji 81st outof 175 countries in its 2003 HumanDevelopment Index (HDI) (Table 2.2).2

Fiji’s HDI ranking has worsened from44th in 1998 to 66th in 2000 and 81st in2003. The ranking is based on acomposite of four indicators: lifeexpectancy, literacy, school enrolmentand GDP per capita. The position of Fiji,which places the country in the top thirdof the Medium Human Developmentgroup, is 11 points higher than its GDPper capita rank, suggesting that it isdoing better than its income level wouldsuggest. Education indicators comparefavorably with the average for countriesclassified under Medium HumanDevelopment. Adult literacy for Fiji wasreported by UNDP as 93.2 compared to78.1 for the Medium HumanDevelopment average. Schoolenrolment stood at 76 per centcompared to the average of 64 per centfor Medium Human Developmentcountries.

2.5 Recent history and

politics

After 96 years of British rule Fiji gainedindependence in October 1970. Fiji is a

Table 2.2: Ranking Fijian human development

UNDP 2003 Human Development Indicators, 2001 data

Note: GDP per capita is in US$ Purchasing Power Parity.Source: ITU adapted from UNDP.

Ranking within groups

Fiji Human Development Small IslandIndicators Oceania Middle Income States

Rank Indicator Value Rank Country Rank Country (PPP) Rank Country

81 Overall 4 Australia 74 Thailand 36 Seychelles

95 Life expectancy 69.3 20 New Zealand 78 Jamaica 71 St. Lucia

51 Literacy 93.2 70 Samoa 81 Fiji 62 Mauritius

61 School enrolment 76 81 Fiji 92 Guyana 81 Fiji

92 GDP per capita (US$, PPP) 4’850 132 P.N. Guinea 103 Cape Verde 86 Maldives

6


republic with a President as the head ofstate, a Prime Minister as the head ofgovernment and a bicameral parliament.The 55-member Great Council of Chiefs(Bose Levu Vakaturaga), consisting of thetraditional chiefs, has considerable moraland political influence. Its advice is soughton major issues and it appoints thePresident.

Tensions between the two main ethnicgroups – the native Fijians and Fijiansof Indian descent – have led to twocoups, in 1987 and 2000. Thosebehind the 2000 coup have beenconvicted and democratic elections in2001 confirmed a new Prime Minister,native Fijian Laisenia Qarase.

7

1

A significant characteristic of Fiji’s economy is its traditional form of land ownership. Similar to the SolomonIslands and Samoa, some 85 per cent of Fiji’s land is under communal title. Derived from customary formsof land ownership and kinship traditions of sharing resources, this distinct institutional structure stipulatesthat land, an important part of cultural and socio-economic heritage, should not be sold or privately owned.Since 1940 the Native Land Trust Board (NLTB) has been the centralized authority in charge of managingnative land. The land issues have also contributed to the larger socio-economic conflict along ethnic lines.

2

See the United Nations Development Programme “Human Development Indicators 2003” available at:http://www.undp.org/hdr2003/indicator/index.html. [Accessed 18 June 2004].

2. Background

8


3. Pervasiveness

This chapter examines individual,household and community access toInformation and CommunicationTechnology (ICT) (fixed and mobiletelephones, computers, Internet aswell as newspapers, radios andtelevisions).

3.1 Telephony

At the end of 2002 it is estimated thata little over one third (35.5 per cent)of Fiji ’s households had a fixedtelephone l ine.1 Household fixedtelephone penetration is growing lessthan two per cent a year so it wouldtake another seven years for half ofFiji’s households to have a fixed lineand almost thirty to reach universal

service or over 90 per cent ofhouseholds with a telephone line(Figure 3.1, left). It appears there hasbeen little substitution of mobile forfixed lines in households, unlike manyother countries (Figure 3.1, right).

Though the extent of substitutabilityhas not been measurable, this will nowbe possible when the results of theHousehold Income and Expenditure

Survey 2003 are compiled (Box 3.1).In any case, it is not believed thatthere are many households that haveonly a mobile telephone.

Fiji’s growth in main telephone linesbetween 1997 – 2001 was 32 per cent,ten per cent less than the worldaverage and only half the rate forcountries at a similar level of economicdevelopment. Fij i is performingroughly at the average for its incomelevel in terms of household telephonepenetration. The average number ofresidential telephone lines for LowerMiddle Income countries was 35.8 inthe year 2000. Household telephonepenetration has tended to match thegrowth in per capita income. Howeverit does not appear that telephonetariffs—which have been at the same

Figure 3.1: Universal telephone service in Fiji

Households with a fixed telephone, Fiji and mobile cellular subscribersas % of total telephone subscribers, 2002

Note: In the left chart, residential telephone lines per 100 households are used as a proxy for householdtelephone penetration. Forecast is based on current growth rates. In the right chart, each dot representsa country.Source: ITU World Telecommunication Indicators Database.

60%

70%

80%

90%

100%

Households with a fixed telephone, % Mobile cellular subscribers as % of total

telephone subscribers

Fiji

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0 5 10 15

SUBSTITUTE SUPPLEMENT

9

level for almost a decade—are a majorbarrier to fixed telephone access. Fiji’slocal telephone tariffs are among thelowest in the world at F$ 2.84(US$ 1.30) a month for residentialsubscription and a flat 12 Fiji ¢(5.4 US ¢) for a local call of unlimitedduration. Assuming 60 calls permonth, the total cost for local servicewould amount to 2.8 per cent of percapita income. The main barrier to ahigher level of universal telephoneservice appears to be a lack ofinfrastructure rather than affordability.

Universal access refers to coverage oftelephone service. There are variousways of measuring universal accesssuch as the number of localities withtelephone service, payphoneavai labi l ity and mobile cel lularpopulation coverage. There areroughly 1’650 villages in Fiji.2 Of thosesome 900 do not have service or55 per cent. Larger size villages wouldtend to be covered by telephoneservice so the actual percentage of thepopulation covered by telephoneservice is higher. One proxy foruniversal access is mobile populationcoverage with 50 per cent of theinhabitants of Fiji capable of receivinga signal. Thus a minimum estimatefor the percentage of the Fijianpopulation with potential easy accessto telephone service is 50 per cent.

Box 3.1: Measuring household ICT

One of the shortcomings of analyzing ICT use inFiji is the lack of official surveys. An accuratemeasure of household ICT penetration andindividual use of ICT can only be obtained throughsurveys. This is being addressed by the HouseholdIncome and Expenditure Survey 2003 (HIES)conducted by the Fiji Islands Bureau of Statistics.When the results are in, Fiji will for the first timehave a picture of the level of ICT usage inhouseholds. Policy makers will be able to analyzethe results by locality and other variables.

The Survey asks about the availability of varioushousehold conveniences as well as expenditureon the items. The areas covered include electricity,fixed telephone, fax machine, mobile phone, paytelevision, Internet and credit card. Unfortunatelythe survey does not ask if the household has apersonal computer but hopefully this will be

redressed in the future. The survey also asks whenthe household began the service which canprovide an indication of how long it has beenavailable and the degree of growth. One questionthe survey will uncover is how many householdshave a mobile phone. It would have been usefulto know how many households have only a fixedline, only a mobile phone, both a fixed and mobileand no telephone to understand the degree ofsubstitutability. This can be extracted from theindividual quest ionnaires but wi l l add toprocessing time.

The HIES is just the first step in understandingICT usage in Fiji. Future surveys will be neededon individual Internet use, the extent of ICT usein business and ICT sector production, investmentand employment to have a more complete pictureof access and trends.

The figure is higher when factoring inmobility. This includes people in ruralareas visiting a town with telephoneservice or inhabitants with a mobilephone residing in areas withoutcoverage but using the phone whenthey travel into covered areas. Anestimated 25 per cent of inhabitedislands do not have direct connectionto the telephone network and use highfrequency radio for emergencycommunications.

There are around 2’000 payphones inFiji. Some 500 are “Drua” payphonesthat resemble the double-hulled warcanoes of the same name. In the past,these canoes were the only form ofinter-island communication explainingthe symbolic link to a payphone. Thereare another 1’000 wall-mountedphones and some 500 booths.

Perhaps the major universal servicepolicy is the subsidization of local fixedline tariffs. This is sustained by higherpriced international and mobilecommunications that are shared withthe domestic operator. It is debatablehow well this policy is working sinceuniversal service is growing slowly.Part of the problem is a lack ofinfrastructure investment in localservice due to market structure withinternational, mobile and domesticservices operated by different entities.

3. Pervasiveness

10


For example, the rate of telecominvestment to revenues in Fiji is 25 percent compared to over 50 per cent forLower Middle Income economies. Theother government universal accesspolicy is payments to Telecom Fiji(around F$1 million per year) toextend service in rural areas.Assuming an average cost of aroundF$20’000 per installation it wouldrequire around F$18 million to providetelephone service to all of Fiji’s

unconnected villages.3 At the currentlevel of government contributions, itwould take another 18 years toprovide telecommunication access toall of Fiji’s villages.

In many developing nations, mobilehas played a major role in enhancingtelecommunication access. The resultsin Fiji have been mixed. During theearly years of mobile in Fiji, growthwas unexceptional and in line with

Box 3.2: Rotuma

The island of Rotuma, with some 2’500 inhabitants,lies some 465 kilometres to the north of Fiji’s mainislands. While most places in Fiji can be reached inless than an hour by plane, it takes 2 hours and15 minutes to fly from the capital Suva to Rotuma.The 43 square kilometre island is considered to be100 per cent rural. Rotuma is not on the electricitygrid with energy created from self-generatedsources.

The northernmost island holds a special status inthe country. Unlike other provinces, Rotuma hasone seat in Parliament.4 It also holds a specialtelecom status as the only part of the country tocurrently be connected by a satellite system fordomestic communications. Installed in 1995 at acost of F$ 2 million, the earth station connects toAustralia where calls are rerouted back to Fiji. GivenRotuma’s remote location and limited transportationand power facilities, the project was a logisticalchallenge. The earth station is powered by solar

panels and a diesel generator and can be monitoredremotely, a real plus given that there is only oneflight a week.

As a result of this link, residential telephone servicecan be provided in Rotuma and it has the thirdhighest home telephone penetration in Fiji. OtherICT are appearing. The high school has hadcomputers since 1998 as a result of British aid anda computer lab is being installed with the assistanceof an Australian church group. The local hospitalalso recently received a computer that will facilitaterecord management; it also has a CD containinginformation on medical treatments. Rotuma is alsopresent on the Internet with a web site run out ofthe University of Hawaii. 5 However Internet accessfrom the island of Rotuma itself is expensive sincethere is no local Internet point of presence. If costscan be reduced, Rotuma will be ready, alreadyhaving translated a number of computer terms tothe local language.6

Box Figure 3.2: Rotuma

Source: Air Fiji and ITU adapted from 1996 Census.

Nadroga Cakau

droveRaNamosiLauLomaiviti

Macuata

Bua Kadavu

TailevuSerua

Ba

Rewa

Fiji

Rotuma

Naitasiri

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

0% 20% 40% 60% 80% 100%Rural population, %

Households with a telephone, %, 1996,

by province

11

forecasts which predicted only around1’000 new subscribers a year. At theend of 1998, there were only some8’000 subscribers. This changed withthe introduction of pre-paid in 1999.Subscriber growth was almost 200 percent in 1999, the highest in Fiji’smobile history. Growth has sinceslowed reaching its lowest level everof 16 per cent in 2002.

There were 93’583 mobile cellularsubscribers at March 2003 for apenetration rate of 11.4; 91 per centof customers are pre-paid. Mobilepenetration is probably close tosaturation, given current levels ofcoverage and tariffs. Mobile is moreof a complement than a substitute inFiji with most people that have a fixedline also possessing a mobile phone.The number of mobile subscribers hasnot passed fixed and thus mobile isnot greatly extending access to thosewithout fixed lines. Mobile populationcoverage stood at 51 per cent in 2002.If there was 100 per cent coveragethe market might be at least twice ashigh as it is now or some200’000 customers.

The mobile operator, Vodafone Fijiplans to accelerate roll-out of rural

coverage. At the moment, populationcoverage is almost exclusively inurban areas. One diff iculty inextending the mobile network is landownership. Vodafone often has to paya lot of money to land owners for theinstal lat ion of a base station.Sometimes the demands areunreasonable and it would not makeeconomic sense to install the network.

Another barrier to increased mobilepenetration is pricing. While Fiji hassome of the lowest fixed line pricesin the world, it also has some of thehighest mobile ones. Fiji’s pre-paidpeak rate call charge of F$ 1.98(US$ 1.05) per minute is the highestof any Vodafone network (Figure 3.2,right). The off-peak rate is muchlower at 40 Fiji cents (21 US cents).A Short Message Service (SMS) costs20 Fiji cents (11 US cents). Thelowest denomination pre-paid cardis F$ 11 (US$ 5.86) with a validityperiod of six months. In July 2003,a new entry-level mobile phone wasbeing advertised for F$ 199 (US$106) (including Subscriber IdentityModule (SIM) card and F$20 of talktime). Prepaid cards are available ata variety of outlets including postoffices and petrol stations and can

Figure 3.2: Fiji mobile market

Number of mobile subscribers, 1994-2002 and forecast 2003-2005 (years ending 31 March) (left) andmobile pre-paid price per minute, US$, August 2003, selected countries where Vodafone operates (right)

Note: Left: Forecast based on 2001-2002 growth rate. Right: Pre-paid prices converted to US$ usingexchange rate of 13 August 2003.Source: ITU adapted from operator information.

-

20

40

60

80

100

120

140

160

94 95 96 97 98 99 00 01 02 03 04 05

-

2

4

6

8

10

12

14

16

18

20

Pre-paidPost-paidFixed densityMobile density

Mobile subscribers in Fiji,

000s

Forecast

$- $0.2 $0.4 $0.6 $0.8 $1.0 $1.2

India

Egypt

Kenya

South Africa

Malta

Australia

UK

New Zealand

Fiji

Average

Off-Peak

Peak

Prepaid prices, per minute, US$, August '03

3. Pervasiveness

12


also be recharged at bank ATMmachines.

3.2 Computers and Internet

There are no official statistics on thenumber of computers or Internetusers in Fiji. According to one report,there were 40’000 personal computers(PCs) in Fiji in 2002.7 Other data basedon sales estimates, suggest a lowerfigure. For example Courts, thebiggest retailer, sells about 200 PCs amonth. Including other retailers, thereare around 3’600 PCs sold per year.Assuming replacement every fiveyears that would equal around18’000 PCs in entire country. Thevalue of computer imports in 2001 wasreported as US$ 6 million, a 25 percent increase over the previous year.8

Assuming an import value ofUS$ 1’000 per PC, there would be anestimated 24’000 PCs in the country(assuming a five year replacementrate). The rounded average of thevarious estimates suggests a figure ofaround 30’000 PCs in Fiji or 3.6 per100 inhabitants. The ratio of the worldaverage of home to total computersis 50 per cent. Applying that figure toFij i , there are an estimated15’000 homes with a computer or9.7 per cent.

The number of Internet users hasbeen estimated based on the numberof subscribers multiplied by three. Thiswould result in an estimate of some23’000 Internet users in 2002 or2.8 per cent of the population.However the ISP—Connect—nowestimates that there are 50’000 usersin Fiji raising penetration to some6.1 per cent.9 Connect multiplied the8’000 subscribers—most of which arehome accounts—by three and addedto that estimates of users ingovernment, the University of theSouth Pacific and business. Connectplans to carry out a study on the homemarket to find out why people are notonline, which might give a moreaccurate indication of the number ofInternet users. The Household Income

and Expenditure Survey 2003 alsoasks households if they have Internetservice but the results were notavailable at the time of this report.

Connect’s estimate of 50’000 Internetusers in Fiji correlates to a number ofother indicators. For example, theestimated newspaper circulation in thecountry is 49’000, the number ofsalaried workers is 42’393, thenumber of people aged 20 and abovewho have tertiary education is 43’580and those in secondary schoolbetween the ages of 15-19 is 43’391.This suggests that Fiji’s Internetpenetration could fairly easily bedoubled (by getting all those witheither tertiary education or all thosecurrently in secondary and tertiaryeducation online). The number ofinhabitants with a secondaryeducation is around 400’000. Thisgives some indication of Fiji’s potentialInternet market.

As in many developing countries,barriers to increased Internetpenetration include a lack ofinfrastructure (electricity10, personalcomputer, telephone l ine).Affordability is an issue particularly forpurchasing a PC. Although importtaxes on PCs have been eliminatedand prices have fallen, the price of anentry level PC is around F$ 1’000(US$ 457), still steep for most people.

The price of Internet dial-up servicehas been reduced several times sincethe launch of commercial service inDecember 1996. Connect offers seventime-based dial-up subscriptionpackages. The entry-level packagecosts F$ 10.40 (US$ 4.75) for threehours of usage per month. Fiji ranks21st out of 33 Asia-Pacific countriesin terms of dial-up Internet pricing butcompares favourably to other Pacificnations. Flat-rate local call pricing isan advantage since a dial-up Internetsession will not incur telephone usagecharges beyond F¢ 12 (US¢ 5.4).Nonetheless, despite the reduction incharges and flat-rate local calls,Internet access is still perceived asexpensive for the average Fijian.

There is not yet any formalgovernment plan for providingcommunity Internet access at publiclocations although there have beenseveral trials in rural locations and somelibraries have access. There are around

13

50 privately operated Internet cafes inFiji, with most outside Suva primarilycatering to tourists. Connect operatestwo in Nadi and Suva. FINTEL operatesan Internet kiosk at its building in Suvacharging 10 Fiji cents per minute. FijiPosts operates an Internet café at themain post office in Suva. They had asecond one in Lautoka but it could notbe maintained so it was shut down.The postal service would like tobecome an ISP and use its network ofpost offices to provide Internet access.There are 52 post offices in thecountry of which 26 support countersales and would have PCs and atelephone for dial-up access. Themajor problem for the other offices isa stable power source; some onlyhave four hours of electricity per day.Fiji Posts currently has a 64 kbpsconnection to the Internet that theysoon plan on doubling. They are makingupgrades to the computer network andif their proposed network isimplemented within the next year, thenthey could feasibly provide Internetaccess at post offices after that.

3.3 Mass media

Radio broadcasting began in 1935.The Fiji Broadcasting CorporationLimited operates six stations: twoeach in Fijian, Hindi and English.11 Itoffers national public broadcastingservice on two of the stations throughan arrangement whereby the

government buys airtime. Othercommercial radio stations are alsoavailable. There are no recent officialstatistics on the number of radios orhouseholds with a radio. The UnitedNations Educational, Scientific andCultural Organization (UNESCO)reported half a million radio sets in1997. Projecting forward, there weresome 550’000 sets in 2002 or 68 setsper 100 inhabitants. Assuming fourradios per household, then 90 per centof households have a radio.

Television broadcasting in Fiji startedin October 1991. Fiji Television Limited(Fiji TV) was established in June 1994and offers a free-to-air channel andterrestrial-based pay televisionchannels (known as Sky TV).12

Broadcasts are in Fijian, Hindi andEnglish. Fiji TV’s broadcast exclusivityrecently ended but no other stationshave yet launched. The 1996 Censusreported 46 per cent of householdswith a television set. Projectingforward, it is estimated that 57 percent of Fijian households had atelevision set in 2002.

There are several English-languagedaily and Fijian- and Hindi-languageweekly newspapers available in Fiji.The daily circulation of the threenewspapers audited by the AustralianAudit Bureau of Circulations was49’124 in 2001 or six per cent of thepopulation.13

3. Pervasiveness

14


1

Household telephone penetration is not compiled on an annual basis in Fiji. The 1996 Census reported that27.2 per cent of households had a telephone. According to Telecom Fiji, the percentage of residential to totalmain telephone lines is 56. An estimate for the number of households with a telephone is derived from thenumber of residential telephone lines.

2

There are conflicting figures regarding the number of villages. The figure of 1’650 was provided byTelecom Fiji however their 1995 Annual Report mentions a figure of 1’066. The 1996 Census reported1’346 Enumeration Areas (the smallest geographical unit for which statistical information is collected)with 688 in rural areas and 658 in urban ones.

3

The figure of F$ 20’000 per installation was provided by Telecom Fiji.4

The House of Representatives consists of 70 members. Thirty-seven Members of the House are elected fromamong persons registered on the roll of voters who are Fijians. Twenty-seven Members of the House areelected from among persons who are registered on the roll of voters who are Indians. One Member of theHouse is elected from amongst persons who are registered on the roll of voters who are Rotumans. FiveMembers of the House are elected from among persons who are registered on the roll of voters who areneither Fijians, Indians nor Rotumans (ie. General Electors Roll). See:http://www.parliament.gov.fj/mp/hr.aspx. [Accessed 18 June 2004].

5

http://www.hawaii.edu/oceanic/rotuma/os/hanua.html. [Accessed 18 June 2004].6

http://www.hawaii.edu/oceanic/rotuma/os/NewsArchive/Archive2003/RotumaFiji03/RotumaFiji03.htm.[Accessed 18 June 2004].

7

Fuatai Purcell and Janet Toland. ICT in the South Pacific: Shrinking the Barriers of Distance. VictoriaUniversity of Wellington (New Zealand). 2002. http://www.fdc.org.au/files/toland-2.pdf.[Accessed 18 June 2004].

8

http://www.intracen.org/tradstat/sitc3-3d/ip752.htm. [Accessed 18 June 2004].9

This figure is greater than the estimated number of PCs suggesting a high degree of sharing.10

According to the 1996 census, 96’756 households in Fiji had electricity or 66.9 per cent.11

http://www.radiofiji.org. [Accessed 18 June 2004].12

http://www.fijitv.com.fj. [Accessed 18 June 2004].13

http://www.business.vu.edu.au/bho2250/Top20Media/TopmediaPacific.htm. [Accessed 18 June 2004].

15

4. Sector absorption

This chapter identifies the degree ofutilization of ICT in different sectorsof the economy.

4.1 Business

There have not been any officialsurveys about the extent of ICT usagein the business sector. The sentimentis larger businesses are the biggestusers of ICT in the country. Businessesin sectors such as tourism and financeappear to be intense ICT users. Fiveof Fiji’s six banks have web sites andaccording to the Fiji Islands Trade andInvestment Bureau (FTIB), more than80 per cent of hotel operators havetheir own websites.1 According toFTIB, Small and Medium Enterprises(SMEs) are less intensive users andface difficulties adopting ICT.

4.2 Government

The use of ICT within the governmentdeveloped gradually and without anoverall guiding strategy. Information

Technology and Computing Services,(ITC, www.itc.gov.fj) which started outas a small unit within the Ministry ofFinance has since expanded its role andtoday is the official ICT department forthe whole of the Fiji government.2 Bythe end of 2000 ITC had connectedmost ministries and departments inSuva to the Internet through thegovernment network GOVNET. ITCprovides different services includingapplication development, training anda customer support centre. Databasemanagement systems are one of themost frequently used governmentapplications. They have been set up fora number of ministries and includeinformation on immigration, land rentaland youth activities.

At mid-2003 GOVNET providedInternet access to about 3’000 (outof a total of 17’000) civil servants. Itsobjective is to connect up to 10’000government users. It will require

significant effort to connect all publicentities since besides the ministriesand related agencies in Suva there aregovernment offices in other locationsas well as 19 local councils. The onlypublic entities outside Suva connectedto GOVNET are libraries.

One of the major problems thatGOVNET faces is the high leased linecost it has to pay to Fiji Telecom, atotal of F$ 9’000 per month. As aresult, broadband connectivity islimited and many ministries connectedto GOVNET, which provides bandwidthup to 128 kbps, complain about theslow speed. Some governmentagencies have chosen not to be partto GOVNET, typically because ofquality of service concerns. Oneexample is the Publ ic ServiceCommission, in charge of humanresources, which has its own ICTteam. Thus government entities endup with the choice between free butslow access through GOVNET or anexpensive but better qualityconnection through the private ISP. Inorder to reduce costs and providebetter services, ITC is planning to buildits own private network. It has appliedfor an ISP license but the request isstill pending.

Another constraint ITC faces is lack ofqualif ied staff. The F$ 12’000(US$ 5’479) that ITC received fortraining in 2002, is insufficient. 3 Atotal of 14 employees left during thelast year causing the abandonment ofseveral ongoing projects.4

4.3 Education

The Ministry of Education (MoE) hasabout 80 employees, ten per cent ofwhich have a personal computer withaccess to the Internet (through thegovernment network, GOVNET). Mostother staff have personal computers,but no Internet access. Like mostministries connected to GOVNET, the


16


MoE complains about the slowconnection and inadequate services. Tooptimise the available bandwidth, theMoE, like other ministries, has beenasked to limit its use to between 2-4hours and to a certain time of day. TheMoE does not have its own web site.

4.3.1 Primary and secondary

education

Only 19 out of a total 899 primary andsecondary schools — just over two percent — are government-run and directlyunder the Ministry of Education.Although the government pays mostteachers and establishes the curriculumand examination requirements,religious and community basedorganizations own and operate theschools. In 2001, 210’743 students —representing over 25 per cent of Fiji’stotal population — were attending pre-primary, primary or secondary school(Table 4.1).5

There is no precise data on the numberof schools with PCs and Internet access.The Ministry of Education estimates thatonly about 30 secondary schools havea well-equipped computer lab withaccess to the Internet. This suggeststhat less than three per cent primaryand secondary schools provide studentswith access to the Internet. Otherschools use computers foradministrative purposes only. If all67’830 secondary school students hadaccess to the Internet, this would

represent around eight per cent of thetotal population.

Some 100 secondary schools (50 percent of all secondary schools) offer ICTcourses to a limited number of studentsthrough the Technical VocationalEducation programme.

The medium-term StrategicDevelopment Plan 2003-2005 stipulatesthat “Education also needs to be aligned

to technology developments and future

skill demands such as Information

Technology” and “computer education

needs to be strengthened for all

students, and in particular for secondary

school students who will be entering

tertiary institutions and the world of

work in the near future”.6 The Plan’seducational policy objectives call forreviewing the curriculum to include ITby 2004 and increasing access tocomputers in schools. The MoE hasrequested funding to equip moreschools with PCs and another tenschools with computer labs and theInternet by 2004. Concrete policies andrules on connecting educationalinstitutions are lacking and schoolsestablish their own ICT budget. Unlikesome other countries, there are noreduced Internet access prices forschools. Another barrier is a lack ofelectricity in an estimated 300 mainlyprimary schools. Since it is unlikely thatmany schools will have Internet accesswithin the next few years, the

Table 4.1: Fiji at school

2001

Note: Enrolment ratio calculated by ITU based on 1996 Census data on school attendance.Source: Fiji Ministry of Education.

Institutions Students Teachers Student: NetTeacher ratio enrolement

ratio (%)

Total 1’462 210’743 9564 22:1

Pre-primary 563 7076 558 13:1 26 (1996)

Primary 700 142’913 5’112 28:1 98.2 (1996)

Secondary including vocational 199 67’830 3’894 17:1 80 (1996)

17

government has mandated ITC toconnect all public libraries. The librariescould be used as a public access pointfor school children.

At the College for Secondary TeacherEducation, there is a computer labwhere teachers can take ICT courses.While the MoE intends to set up acomputer lab in the primary teachereducation college, there are no concreteplans to integrate ICT training in theteachers’ education program.

4.3.2 Post-secondary education

Fiji is home to the main provider ofhigher education in the Pacific region,the University of the South Pacific(USP, www.usp.ac.fj).7 Apart from abranch of Austral ia’s CentralQueensland University(www.suva.cqu.edu.au), USP is theonly university in Fiji. The number ofUSP students has increased steadily,from 5’228 in 1988 to 18 in 2004. In2002 over half of these were studyingon-campus with the remainingfollowing courses at USP branches onother Pacific islands. Almost threequarters of USP students are Fijians.

USP is largely computerized, includingstudent records, employeeinformation and f inancial andpurchasing systems. Administrativedata can be updated and is accessiblefrom any one of its centres. TheUniversity has more than 1’500 PCsand every student and teacher hastheir own email account. There is afibre-optic local area network on theSuva campus and a one Mbpsconnection to the Internet.

USP is the leading provider of distanceeducation in the region with4’772 students in a dozen Pacificisland nations (Box 4.1).

4.4 Health

The Ministry of Health (MoH,www.health.gov.fj) is one of the fewministries with a web site. It providesinformation on health related projects,links to press releases and otherhealth related organizations, as wellas email contacts. The ministry’sheadquarters has a two Mbps leased

line connection to ITC. Like otherministries, it complains about the slowspeed. The MoH estimates that it hasabout 500 computers, most of whichare used for PATIS (see below).Internet access and email are limitedto some 150 managers, only aboutfive per cent of the total MoH staff.

The Ministry has become one of themost computerized in Fiji. Its PatientInformation System (PATIS) providescomputerized health care managementand is part of an Australian fundedHealth Management Reform Project(1999-2003).9 PATIS is currently usedin 12 of Fiji’s 20 hospitals. It includes aunique identification number for eachpatient through which medical recordscan be retrieved and modified from allconnected hospitals. Because of highleased line costs, the PATIS networkuses dial-up communications betweenthe ministry headquarters in Suva andparticipating hospitals. For securityreasons, this connection is only usedto update PATIS and not to access theInternet.

As part of the Health Reform andconnected to PATIS, the MoH is alsothe first government entity to pilot theFinancial Management InformationSystem (FMIS). Launched in mid-2003, the pilot project aims toimprove financial management andincludes information on inventory,public expenditure and a humanresource database. Eventually, theplan is to implement FMIS within theentire government.

There are no official telemedicineprojects carried out by the Fijigovernment. The Fij i School ofMedicine (FSM, www.fsm.ac.fj), aprivate organization that is the majorregional health institution, has beeninvolved in several ICT projects. Thisincludes a web site(www.pachealthnet.org) allowinghealth professionals across the regionto exchange information, includingdata and images, for remoteconsultation and diagnosis. The PacificTelepathology service (www.fsm.ac.fj/PWS/telepath.htm), which was set upat FSM in June 2003, provides for theexchange of medical information


18


Box 4.1: The University of the South Pacific- successful distance learning

Twelve Pacific countries spread over 33 million squarekilometres of ocean, an area more than three times thesize of Europe, own the University of the South Pacific(USP).8 Its three main centres, located in Fiji, Vanuatuand Samoa and eleven local ones offer decentralizedtertiary education. Centres are located in 11 of the12 member states. Sixty per cent of its students makeuse of the distance education program.

Especially over the last few years enrolment at USP hasincreased substantially, from 10’452 students in 2002 toover 18’000 in 2004. Students can chose among some160 courses. All courses are taught in English and degreesrange from undergraduate certificates to doctorates.Member countries largely finance the university, whichwas established in 1968.

The distance education programme is supported by USPssatellite communications network, USPNet. The networkhas evolved from radio communications, to itinerant useof the PeaceSat satellite and finally to 64 kbps leasedlines and an upgraded HF radio communications system.A few years ago, these technologies were replaced byUSPNet-2000, a new VSAT telecommunications network.USP has permission to bypass the internationaltelecommunication service provider and to connect its12 member states directly through INTELSAT.

Some courses are completely available by distancewhile all exams are taken under supervision, in one ofthe centres. The university has committed itself tomaking the entire computing science programmeavailable by distance education by the end of 2005.The course will be a combination of print-based, multi-media and on-line methods. While most courses arestill print-based, live video broadcast started in 2000.Although students and staff have access to email andthe Internet, only few web based online courses havebeen delivered in collaboration with foreign universitiesand the principal use of the Internet is electronic mail,research, and file transfer.

While web based courses would further expand theuniversity’s curriculum and increase educational quality,the high costs of Internet bandwidth has restrictedprogress in this direction. High costs and limitedbandwidth have also forced the university to restrictInternet access among its students. This is a majorproblem and has seriously restricted the university’sability to fully take advantage of the Internet. USP’smanagement is looking into possibilities of expandingthe IP platform, as well as to increase the number ofcentres by connecting more places through dial-upaccess.

Note: The satellite master station is at the campus in Fiji with a 7.6 metre antenna and a transmit power of 100 watts.Smaller hubs are located in Samoa and Vanuatu but with reduced transmission capacity. All centres need their own earthstation and local remotes have sufficient capacity to participate in audio and video conferencing and receive videobroadcasts. Data and audio services between all centres are provided through the permanently assigned 64 kbps two-way data circuits. The system also supports up to three simultaneous video transmissions or two simultaneousvideoconferences.Source: University of South Pacific, Information Technology Services(http://www.usp.ac.fj/index.php/its).

Box Figure 4.1: Distance learning through the USPNet VSAT Network

Source: Small Islands Developing States Network (SIDSNET).

19

through the use of dial-up Internetaccess. The Fijian experience showsthat basic Internet services accessibleto those with narrow bandwidthconnections—email, web pages and theattachment of still images—are the

1

Shiu Raj. E-Commerce in Fiji Islands. Regional Seminar on E-Commerce, 11-14 December 2001, Bangalore,India.

2

ITC was originally called the Electronic Data Processing Unit (EDP) within the Ministry of Finance. When itexpanded its role to the rest of the government, it changed its name to ITC.

3

This amount refers to government funding only and does not include training financed through foreignassistance.

4

This is highlighted in ITC’s two annual publications, the corporate plan - which outlines upcoming projects —and the annual report — which summarizes the results of projects. Both are available online, athttp://www.itc.gov.fj/publications.html. [Accessed 18 June 2004].

5

Primary education roughly covers those aged 6-11; lower secondary those between 12 and 15 and uppersecondary usually those between 15 and 17.

6

Government of Fiji. Rebuilding Confidence for Stability and Growth for a Peaceful, Prosperous Fiji. StrategicDevelopment Plan 2003-2005. November 2002.http://www.itc.gov.fj/docs/Strategic%20Development%20Plan%202003%20-%202005.PDF.[Accessed 18 June 2004].

7

Only Western Samoa and Tonga have small universities.8

Cook Islands, Fiji, Kiribati, Marshall Islands, Nauru, Niue, Samoa, Solomon Islands, Tokelau, Tonga, Tuvaluand Vanuatu.

9

See “Fiji — Health Management Reform Project” on the Aus Health International web site athttp://www.ahi.com.au/projects/1014161718_22071.html. [Accessed 18 June 2004].


most commonly used telemedicine /telehealth type applications. Moresophisticated applications such as livevideoconferencing for remote diagnosis,would involve a higher degree oftechnical expertise and bandwidth.

20


5. Connectivity

5.1 International backbone

Fiji has international telecommunicationconnectivity through Intelsat satelliteand the Southern Cross undersea fibreoptic cable.1 Fiji connected to SouthernCross in November 2000 (Figure 5.1).2

FINTEL’s investment to connect to theundersea cable was F$45 million.

All of Fiji’s international Internetbandwidth is via Southern Cross withsatellite only used for voice. Totalbandwidth used by Fiji on SouthernCross is 20 Mbps including private datalines; Internet bandwidth is 10 Mbps.Fiji’s Internet traffic on Southern Crossis terminated by UUNET in the US andby Optus in Australia.

There is some confusion whetherConnect, the ISP, can obtainbandwidth directly from FINTEL ormust go through Telecom Fiji. Thecurrent arrangement is that itcurrently gets two Mbps directly fromFINTEL (for which it pays less) andthe rest through Telecom Fiji (which

Figure 5.1: Southern Cross

Fiji international Internet bandwidth, Mbps and routeof Southern Cross fibre optic submarine cable

Source: ITU research and Southern Cross.

0

1

2

3

4

5

6

7

8

9

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

Nov. '94:

USP

establishes

first direct

connection

to Internet

via satellite;

2400 bps

leased line

to Australia.

International Internet bandwidth, Mbps

Nov. 95: Telecom

Fiji begins trial with

64 kbps satellite

connection to New

Zealand.

Commercial service

launched May 96.

Nov. '00:

FINTEL

connects

to

Southern

Cross

fibre optic

cable.

in turn procures the internationalbandwidth from FINTEL).

Prices for international Internetbandwidth that Fiji is paying seemhigh by global comparison (Figure 5.2,left). Prices have not fal lendramatically despite the SouthernCross connection. There also appearsto be a lack of transparency inbandwidth pricing with different ratesbeing charged depending on thecustomer.

Despite the increase in Internetbandwidth made avai lable bySouthern Cross, a number ofindicators suggest that it is still notsufficient. These include gaugingpotential demand by taking the ratioof international telephone traffic inminutes to international Internetbandwidth. If the results of the so-called Bit Minute Index are over one,then there is probably sufficientInternet bandwidth. In the case of Fiji,the value is only 0.09. On a per capitabasis, Fiji’s international Internet

21

Figure 5.2: International Internet bandwidth capacity and pricing

International Internet bandwidth, selected Pacific economies, bits per capita, 2002 and InternationalInternet bandwidth prices, US$ per Mbps per month, various dates (Fiji = June 2003)

Source: Left chart: ITU adapted from Pacific Forum Secretariat. Right chart: ITU Internet Case Studies.

International Internet bandwidth

US$ per 1 Mbps per month

EgyptMaldives

FijiUganda

Cambodia

12

6

6

10

11

13

18

34

34

44

104

161

9

32

PNG

Solomon Islands

Nauru

Kiribati

Fiji

Vanuatu

Samoa

Tuvalu

Tonga

Average

Niue

FSM

Marshall Islands

Palau

Cook Islands

International Internet bandwidth, bits per capita, 2002

bandwidth is some three times lessthan the Pacif ic region average(Figure 5.2, right).

In addition to the ISP, there are otherpotential customers for bandwidthsuch as call centres. Another potentialuser could be Fiji’s budding movieindustry with the idea of digitallytransferring films to Hollywood forovernight editing.3

FINTEL has been backing the PacificCable project that would link all SouthPacific countries to Southern Cross.It is not proposed as a commercialscheme since the small islands cannotgenerate suff icient revenues tofinance the project. Instead the ideais being promoted as important fordevelopment. The total project costis estimated at US$ 450 million.Discussions have been held with theEuropean Union, World Bank andAsian Development Bank. The projectwould involve two extensions from Fijito other countries.

5.2 Domestic backbone

Telecom Fiji’s domestic backbonecovers most of the major islands andis primarily microwave. Around onequarter of inhabited islands are not

covered by the microwave networkand have no direct connection to thePublic Switched Telephone Network(PSTN). Most would have an HF radioservice for communications. Thereare strips of fibre on the main island(Viti Levu, Nausori-Suva, Suva-Pacific Harbour and Nadi-Rakiraki).Plans call for installing a fibre ringaround the whole island placing thecable next to the main road; thisshould be complete within the nexttwo years. There is also a fibre ringbeing created around the SuvaCentral Business District. A domesticsatellite system is used for the islandof Rotuma, home to2’800 inhabitants.

A VSAT project has just been signed;the first phase will be completed byMarch 2004. This will be IP based withspeeds of 128/256 kbps. It calls foraround 300 VSAT locations and willcost F$19 million. The government isallowing accelerated depreciation forthe project that makes it marginallyeconomic. The VSAT terminals arefrom NERA (a Norwegian company)whereas INTELSAT is used for thespace segment.4

Data protocols used on the domesticbackbone include frame relay using

5. Connectivity

22


Cisco routers. The theoreticalbandwidth is 155 Mbps but actualspeeds are much slower. It is usedmainly for leased lines. Internet trafficis routed over Telecom Fiji’s backbonenetwork (so-called DDS service) at2 Mbps with a planned upgrade thatwould double speeds.

The Fiji Electricity Authority (FEA) hasits own microwave telecommunicationnetwork connecting the islands of VitiLevu, Vanua Levu and Ovalau. FEA isplanning to install fibre optic cable inthe Suva area. Although FEA wouldlike to lease excess telecommunicationcapacity to others, they are forbiddenfrom doing so. According to FEA, it wascheaper to construct their backbonenetwork than lease from Telecom Fiji.

5.3 Exchange points

There has so far not been a need for anational Internet exchange sinceFINTEL has a monopoly on internationaltraffic and there is only one ISP. Inaddition, most Fiji Internet traffic is toweb sites abroad given the Englishproficiency of the population and thevolume of content available overseas.

5.4 User access methods

The majority of Internet subscribersuse dial-up. At the end of 2002, therewere 7’600 dial-up subscribers in thecountry compared to 80 leased lines(speeds between 64 kbps to 1 Mbpswith around half the tourist resortssubscribing) and 10 IntegratedServices Digital Network (ISDN)subscribers. Consumer broadbandaccess methods such AsynchronousDigital Subscriber Line (ADSL) or cablemodem are not available. Fiji Telecomclaims that ADSL is not financiallyviable and is instead pursuing ISDN,launched in 2002. This is in contrastto most other countries where ISDNis declining and ADSL use is growingrapidly. Pay television using coaxialcables is not available. Fiji TV providesan encrypted terrestrial pay TV servicewith around 7’000 subscribers.Several companies have expressedinterest in providing pay televisionservices but using wireless MMDS.One possibility for pushing broadband

access would be to allow pay televisioncompanies to also provide high-speedInternet services as an incentive toencourage them to build a Hybrid FibreCoaxial network. Another possibilityfor broadband access would be PowerLine Communications using theelectrical wiring of FEA.

Mobile and other wireless access tothe Internet is l imited. NeitherWireless Access Protocol (WAP) norGenera l Packet Radio Serv ices(GPRS) are available. There are plansto launch GPRS in 2004. GPRS willbe offered by “long lining” back toAustralia through the Southern Crossfibre optic cable. The main localinvestment will be to upgrade basestations with software for GPRS. Theexperience of running off of serversin other countries already exists withAustra l ia rout ing Mult imediaMessaging Services (MMS) fromservers in New Zealand. Around 200mainly corporate users are accessingthe Internet via the mobile network(for example by using Bluetooth toconnect a mobile phone to a PDA andcheck e-mail). Text messaging is alsogoing up in use with the number ofShort Message Serv ice (SMS)doubling to 6.1 mill ion in 2002(5.6 per subscriber). Around a thirdof mobile subscribers are using SMS.

Internet access through wireless LocalArea Networks (LANs) using thepopular IEEE 802.11b standard (i.e.,Wi-Fi) is not commercially available.One uncertainty is whether TelecomFiji, Vodafone Fiji or Connect (the ISP),should pursue this technology.Another issue is demand with mostFijians unable to afford a laptopcomputer. The regulatory status of the2.4 GHz frequency used by Wi-Fi isalso unclear.5 Wi-Fi does not have tobe used only for hotspot services. Itis a promising technology forconnecting computers in governmentand educational institutions to localInternet backbones as well as in publicInternet access facilities.6 Connect islooking at 802.16a technology in the3.5 and 5.5 GHz frequency.7 Speedscan reach 268 Mbps depending onvarious factors.

23

1

For more information about Southern Cross, see http://www.southerncrosscables.com[Accessed 18 June 2004] and http://www.alcatel.com/submarine/refs/cibles/pacs/southerncross.htm.[Accessed 18 June 2004].

2

The Southern Cross cable is named after the plane that made the first trans-Pacific Ocean crossing in 1928.The cable parallels the plane route from Oakland (near San Francisco) to Brisbane, Australia with stops inHawaii and Fiji. http://www.austehc.unimelb.edu.au/tia/505.html. [Accessed 18 June 2004].

3

Mere Tuqiri. “Move Over Hollywood. Here Comes Fiji’s Follywood.” Pacific Magazine. September 2002.http://www.pacificislands.cc/pm92002/pmdefault.php?urlarticleid=0037. [Accessed 18 June 2004].

4

Telecom Fiji. “Rural Telephone Penetration to Grow Through New Satellite Network.” Press Release.22 July 2003. http://www.telecomfiji.com.fj/newsroom/2003_press_release/22july03.shtml.[Accessed 18 June 2004].

5

Although the term unregulated frequency is not used in ITU texts, the implication is that frequencies forindustrial, scientific and medical use should not require licensing.

6

Indeed the UN has hailed Wi-Fi as a promising technology for developing nations and hosted a recentconference on the issue. See http://www.w2i.org/pages/wificonf0603/PressRelease3.html.[Accessed 18 June 2004].

7

It has been looking at equipment from Aperto Networks. See http://www.apertonet.com/index.html.[Accessed 18 June 2004].

5. Connectivity

24


6. Market

6.1 Overview

The Ministry of Information,Communications, and Media Relationswith eight staff, is responsible fortelecommunication regulation andpolicy. The current law governing thetelecom sector — the Post andTelecommunication Decree — datesfrom a 1989 cabinet decision (there wasno parliament between 1987-1992).The decree established Fiji Posts andTelecommunications Limited (FPTL) asa corporate entity spun off from theDepartment of Telecommunications.The decree also granted 25-yearexclusive rights for nationaltelecommunications to FPTL and forinternational telecommunications to FijiInternational Telecommunications(FINTEL). In July 1996, post andtelecommunications were separatedand FPTL renamed Telecom Fiji Limited.

In March 1998, the government createdAmalgamated Telecommunication

Holdings Limited (ATH) to manage itsassets in the telecommunication sector.This included 100 per cent of TelecomFiji, the fixed line and national longdistance operator as well as 51 per centof Vodafone Fiji, the mobile operator.The government wanted to include its51 share in FINTEL—the internationaloperator—in ATH but its other owner,Cable and Wireless of the UK objected.However the government’smanagement rights in FINTEL arecarried out by ATH.

In 1998, Credit Suisse First Boston washired to carry out the steps for a partialprivate sale of ATH. The sale took placein December. The best offer wasreceived from the Fiji National ProvidentFund (FNPF)—the country’s pensionsystem—who bid F$254 (US$ 130)million for 49 per cent of ATH. FNPFpaid an extra F$23 million premiumfor the right to acquire an additionaltwo per cent for majority ownership

Figure 6.1: Ownership of Fiji's telecom sector

June 2003

Note: * The Government of Fiji shares in FINTEL are managed by ATH.Source: ITU adapted from ATH, FNPF.

Governmentof Fiji

FINTEL

Internationaloperator

TelecomFiji

Domesticoperator

VodafoneFiji

Mobileoperator

Cable &Wireless(UK)

ATHVodafone

(UK)

NationalProvident

FundOthers

49% 51%* 100%

51% 49%

34.6%

58.2%

7.2%Governmentof Fiji

FINTEL

Internationaloperator

TelecomFiji

Domesticoperator

VodafoneFiji

Mobileoperator

Cable &Wireless(UK)

ATHVodafone

(UK)

NationalProvident

FundOthers

49% 51%* 100%

51% 49%

34.6%

58.2%

7.2%

25

that it exercised in September 1999.In March 2002, additional governmentshares were offered to the public andinstitutional investors and ATH waslisted on Suva’s South Pacific StockExchange (SPSE).

A new telecommunications bill is underpreparation. The draft bill calls forestablishment of a telecommunicationregulator and a licensing framework.

The Minister of Communications ischarged with establishing advisorygroups to assist in the formulation ofindustry policies. The Information

Technology Advisory Council (ITAC) iscomposed of around a dozengovernment and privateorganizations, including severalministries, telecom operators, the ISPand the university. The ITAC iscurrently preparing an ICTDevelopment Policy document.

6.2 Fixed networks

6.2.1 National operator

Telecom Fij i, the domestictelecommunication company,operates the nation’s fixed line andthe national transmission network. Italso owns Connect, the only ISP inoperation at the time of this report.Telecom Fij i is ful ly owned byAmalgamated TelecommunicationHoldings (ATH). It is also the jointventure partner with Vodafone Fiji, themobile operator, owning 51 per cent(Figure 6.1). Telecom Fiji is thenation’s largest operator in terms ofrevenue and staff.

Telecom Fiji traces its roots back to 1910when the government took over thetelephone network owned by ColonialSugar Refinery Company (whichintroduced Fiji’s first telephone systemin 1895). In 1990, Fiji Post andTelecommunications Limited (FPTL) wascreated to take over the government’stelecommunication and postal servicesand granted a 25-year exclusive licensefor domestic telecommunications. InJuly 1996, FPTL split into two separateentities, Post Fiji Limited and TelecomFiji Limited. Government ownership inTelecom Fiji was transferred to ATH inMarch 1998 with the latter later listing

shares on the South Pacific StockExchange.

All operators are obliged to use theTelecom Fiji domestic network. Itshares revenues with FINTEL andVodafone Fij i for terminatinginternational and mobile calls. Thesepayments help Telecom Fiji keepdomestic line rentals and local callcharges low which it states aresignificantly below cost. This situationis not sustainable in the long run.

6.2.2 International operator

Fiji International Telecommunications

(FINTEL),1 formed in December 1976,is the operator for international services.It is 51 per cent owned by thegovernment of Fiji. Cable and Wirelessof the UK, which has operatedinternational telecommunicationservices in Fiji since 1902, owns theremainder. FINTEL has an exclusivelicense for international services until2014. FINTEL had 78 employees at theend of 2000.

FINTEL has a revenue sharingagreement with Telecom Fiji with thelatter receiving 53 per cent forterminating international calls. Thesepayments in effect subsidize localtelephone charges. Despite theworldwide trend towards reducedinternational calling prices, Fiji’sinternational call prices have onlychanged once over the last ten years.FINTEL pricing is constrained due to thepolitical sensitivity of raising local callcharges, the inevitable outcome ifinternational prices were to be reduced.FINTEL favours an interconnectarrangement rather than the currentrevenue sharing system.2 It is also infavour of rate rebalancing since volumewill go up.

Fiji’s high international call chargesmake it an attractive target foralternative calling schemes such as callback and Internet Telephony since theycan significantly undercut FINTEL.Though deemed illegal by thegovernment, these practices seem tobe having an impact on FINTEL. Itsrevenues declined 19 per cent in the2002 financial year (though ironicallyprofits rose 15 per cent). A local call

6. Market

26


back company, TELPAC, is charging upto less than 44 per cent less than FINTELand reportedly has captured 15 per centof the market.3

The impact of call back traffic (whichshows up as incoming traffic) coupledwith high domestic international callingprices is reflected in Fiji’s internationaltraffic statistics. The ratio of incomingto outgoing international traffic (inminutes) has grown from 2 in 1997 to2.5 in 2002 (Figure 6.2, right). A largepart of this increase is due to incomingtraffic from the United States, hub forcall back traffic. Incoming traffic fromthe United States grew 268 per centbetween 1995 and 2001 and its sharein Fiji’s total incoming traffic rose from18 to 38 per cent. In the meantime, Fijiwas forced to apply benchmarkaccounting rates by the United Statestelecommunication regulator. It wasobliged to reach an accounting rate of38 US cents by 1 January 2001, areduction of 82 per cent from 1995(Figure 6.2, left). As a result, thoughFiji is receiving much more traffic fromthe United States, it is making lessmoney than before.

FINTEL needs to diversify to overcomedeclining revenues from traditionalinternational telephony and to recoup

its investment in the Southern Crosscable. Provision of internationalInternet connectivity, though not amajor source of revenue yet, isgrowing. FINTEL has also obtainedan ISP license but has had problemsproviding service due to the lack ofan interconnect agreement withTelecom Fiji. For the time being ithas reached agreement to provideservice through an Internet kiosk atits headquarters in Suva.

6.3 Mobile services

Vodafone Fiji is the nation’s mobileoperator.4 The company is 49 percent owned by Vodafone, the UKinternational mobile operator withthe remainder held by ATH, theF i j ian ho ld ing company fortelecommunications. Vodafone Fijilaunched digital GSM service in the900 MHz frequency in July 1994.Interestingly, Vodafone Fiji doesnot have a mobile l icense butc la ims exc lus iv i ty for mobi leservices until 2014 through itsassociation with Telecom Fiji. Thecompany had 104 staff at March2003.

There is close collaboration with theVodafone group particularly with its

Figure 6.2: International telephone price and traffic trends

Trend in price of retail call and settlement rate from Fiji to US, 1995-2002, 1995 = 100 (left) andFiji international telephone traffic, total and with US, millions of minutes, 1995-2001 (right)

Source: ITU adapted from Direction of Traffic database, FINTEL and FCC data.

-

10

20

30

40

50

60

70

80

90

100

1995 1996 1997 1998 1999 2000 2001 2002

Price of call from Fiji to USA

(1995=100)

Settlement rate

FINTEL tariff

0

10

20

30

40

50

60

1995 1996 1997 1998 1999 2000 2001

Fiji international telephone traffic

millions of minutes

Total outgoing

Total incoming

Incoming from USA Outgoing to USA

27

other Pacific operations in Australiaand New Zealand. There is alsooperational collaboration with forexample, Vodafone Fiji’s post-paidbi l l ing outsourced to VodafoneAustralia. The Vodafone connection iscited as one of the reasons forVodafone Fij i ’s strong marketorientation and the company notesthat it has the Vodafone group “ethos.”

Vodafone Fiji faces two constraints inraising mobile penetration: pricing andcoverage. Peak time call charges areamong the highest in the world. Partof the problem is negotiating anappropriate interconnection rate withTelecom Fij i . The currentinterconnection rate is 60 Fiji centsfor local calls and 44 Fiji cents for longdistance. Interestingly, the off-peakmobile rate is cheaper (and less thanthe interconnect charge) than thefixed rate for long distance calls.Another source of friction is the useof CDMA phones in a mobility modeby Telecom Fiji’s wireless local loopcustomers.

Half of the population is within rangeof the Vodafone Fiji network. Effortsto extend coverage have beenhampered by reaching agreementwith landowners for installing basestations. Another constraint iselectricity, which is not available

throughout the country. In addition,Vodafone Fiji is not allowed to installits own long distance transmissionnetwork but must use Telecom Fiji.Vodafone Fiji is also not allowed todeal directly with FINTEL forinternational service but must gothrough Telecom Fiji.

Fiji’s tourism industry has a favourableimpact on Vodafone Fiji with manyoverseas visitors bringing their mobilehandset with them. Vodafone Fiji has72 roaming agreements andinternational roaming accounts foraround 15 per cent of revenues. Some60 resorts and hotels have mobilecoverage and Vodafone Fiji hopes toexpand this. International SMS usageis expanding with local users findingit cheaper to send messages to friendsand relatives abroad than to call.

6.4 Internet access

Commercial Internet service wasintroduced by Telecom Fij i inDecember 1995. In June 2002,Telecom Fiji’s Internet operations werespun off into a new company calledConnect. Like Vodafone Fiji, Connectdoes not have an ISP license butclaims a legal monopoly through itsparent Telecom Fiji which has anexclusive l icense for domestictelecoms through 2014. Connect has

Figure 6.3: Fiji's telecommunication market

Note: Year ending 31 March.Source: ITU adapted from operator reports.

Telecom

Fiji

56%Vodafone

Fiji

15%

FINTEL

29%

Fiji telecom

market revenue,

2002

Total = F$ 227

(US$ 104) million ILD

20%Local

7%

NLD

18%

Data &

Internet

14%

Mobile

41%

Fixed

telephone

45%

Telecom revenue by market segment, 2003

Total = F$ 133 (US$ 61) million

6. Market

28


around 35 staff. The government hasissued eight ISP licenses but nonehave been activated due to a lack ofinterconnect arrangement withTelecom Fij i . Connect has aninterconnect arrangement for usingTelecom Fiji’s network with pricingdependent on the volume of traffic.

One of the reasons given forestablishing an Internet subsidiary isto make it more customer orientedand to provide better quality byfocusing on Internet issues. On theother hand, Connect does not havefull independence. For example, itwould like to procure internationalbandwidth directly from FINTEL tolower costs but Telecom Fiji insists itmust go through them. The currentsituation is that Connect buys fromboth. Connect is also keen to providehigh-speed service but is constrainedby the Telecom Fiji network. As aresult, it cannot launch broadbandservices such as ADSL until TelecomFiji agrees. One option is to offer high-

speed access through fixed wirelessbut here too it must obtain theapproval of Telecom Fiji.

6.4.1 Domain name

The University of the South Pacific(USP) is responsible for Fiji’s domainname (.FJ). In 1990 USP asked toregister the domain name and theInternet Assigned Number Authority(IANA) delegated it to them.5 USPregisters all second level domains inFiji, except for the academic sector,which is entrusted to Connect(school.fj for high schools). Althoughthe government (gov.fj) domain istechnically the responsibility of thepublic sector, USP carries out this task.It costs US$50 to register a domainand US$25 per year after that.Registration details are on online.6

There were 1’361 registered domainsat June 2003 with com.fj having themost. Network Wizards reported 785Internet host computers using the FJdomain name in its January 2003survey (Figure 6.4).

Figure 6.4: Internet hosts and domains

Number of Internet hosts, 1993-2002 (left) anddistribution of FJ domain registrations, June 2003 (right)

Source: ITU adapted from The World Factbook, Central Statistics Office.

Internet hosts

5 552 75 92

214

359

555

668

785

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

gov.fj

2%

ac.fj

1%

Other

3%

net.fj

11%

org.fj

15%

com.fj

68%

Domain registrations (FJ)

Total = 1'361

June 2003

29

1

http://www.fintel.com.fj/home.html. [Accessed 18 June 2004].2

For more on interconnection issues see “Round 2 is over inter-connect.” The Review (Fiji). 1 June 2003.3

Robert Keith-Reid. “Fiji Telecom Row’s Heading to Court.” Pacific Magazine. January 2003.http://www.pacificislands.cc/pm12003/pmdefault.php?urlarticleid=0039. [Accessed 18 June 2004].

4

http://www.vodafone.com.fj. [Accessed 18 June 2004].5

At that time, USP had dial-up connectivity through the University of Waikato in New Zealand. In 1993, USPgot a direct connection through AARNET at University of Melbourne. In 1996, USP switched over to TelecomFiji’s Internet service. http://www.iana.com/root-whois/fj.htm. [Accessed 18 June 2004].

6

http://whois.fj/public/index.php?USP-DomReg=979d618c621af64eb6151b6b76415abf.[Accessed 18 June 2004].

6. Market

30


7. Information society

7.1 Economic impact

The contribution of the communicationsector to Fiji’s Gross Domestic Product(GDP) has risen from 2.7 per cent ofGDP in 1989 to 3.6 by 2002 althoughit has declined from a high of 4.2 percent in 2000 (Figure 7.1, left). This ispartly attributed to a drop ininternational telecommunicationrevenues the last several years. Anothermeasure often used to weigh the impactof the telecommunication sector is theshare of telecommunication revenuesto GDP. The value for Fiji in 2001 is5.9 per cent, ranking it 16th in the world(Figure 7.1, right). This figure is moreof a reflection of high prices caused bythe monopoly situation rather thanwidespread use of telecommunicationsthroughout the economy. Asmentioned, the actual value-added ofthe communication sector is relativelylow at 3.6 per cent.

Despite the relatively low contributionof telecommunications to overall

Figure 7.1: Telecoms and the economy

Contribution of the communication sector to GDP, Fiji and telecom revenues as a percentage of GDP,selected economies, 2001

Note: The left chart measures the value-added of the communications sector (which includes posts).Source: ITU adapted from Fiji Islands Bureau of Statistics and World Telecommunication Indicator database.

Contribution of communication sector to GDP, %

3.2%3.3%3.4%3.5%3.6%3.7%3.8%3.9%4.0%4.1%4.2%4.3%

1998 1999 2000 2001 2002 0% 2% 4% 6% 8% 10% 12%

Samoa

Micronesia

Vanuatu

Fiji

Jamaica

Maldives

Kiribati

Telecom revenue as % of GDP, 2001

economic output, as a business,telecommunication firms are amongthe largest in the country. ATH, theholding company for governmentholdings in the sector, has the biggestmarket capitalization on the SouthPacific Stock Exchange and is Fiji’ssingle largest enterprise in terms ofrevenues. ATH pays a minimum of50 per cent of net profit in dividendsensuring its major shareholder, the FijiNational Provident Fund (FNPF) asteady source of income for financingthe nation’s pension system.1 ATH isalso one of the biggest taxpayers tothe government. This situationcomplicates liberalization of thetelecommunication sector.

7.2 Social impact

ICT is slowly beginning to impact Fijiansociety. Access to traditional ICTs suchas radio and television is high. Over90 per cent of households areestimated to have a radio and overhalf the population have access to

31

television. Five years ago the Internetwas just getting started in Fiji; at theend of 2002 an estimated 6.1 per centof the population were users. Fiji’sinhabitants are also getting exposedto ICTs through their mobile phoneswith the number of text messagesreaching six million in 2002, or almostsix per subscriber per month. Thepopulation is starting to use electronictransactions. ANZ bank, one of thelargest, has 30 Automatic TellerMachines (ATMs) on the two mainislands where customers can not onlywithdraw cash but also pay theirphone bill and recharge their pre-paymobile account. ANZ also offerstelephone and online banking.

Most Internet use is to sites abroad.However local content is beginning todevelop. One of the radio stations hasaudio streaming (albeit paid streamingand aimed at Fijians abroad). Thereare some promising areas for localcontent: the local newspaper plans toput up classif ieds and anothercompany is planning to make a sitewith vacancies in the hotel industry.Fiji has limitations in developing localcontent. There are few domesticsolutions for web site design andhosting and design skills are lacking.This is unfortunate since it isestimated that F$1’000’000 a year islost to hosting abroad with virtuallyall local hotel and resort web siteslocated overseas.

A major drawback is that most of thepopulation are still not aware of thepotential of the Internet. Also, pricingof Internet service is expensive formany and discourages heavy use. Itis too costly to experiment, be creativeand come up with new ideas. This alsodiscourages the development ofInternet cottage industries that aredependent on inexpensive Internetaccess.

7.3 Knowledge base

7.3.1 Literacy and school

enrolment

A signif icant determinant of acountry’s ability to transition to aninformation society is its knowledgebase. Indicators such as educational

attainment and school enrolment helpdetermine the potential for ICT use.The 2003 UNDP Human DevelopmentIndex indicator for education—composed of school enrolment andliteracy—suggests that Fiji is doingwell compared to other developingcountries. Fiji received a score of 0.88on the education index, which is highcompared to the medium humandevelopment average of 0.74. Adultliteracy has increased from 80 per centin 1985 to over 93 per cent in 2001.This is 15 per cent above the mediumhuman development average of 78 percent. Fiji has universal access toprimary education, increased accessto secondary education and virtualgender parity. In 1996 net secondaryschool enrolment was 80 per cent andin 2001 compulsory education wasextended to lower secondary.

Qualitative differences do existbetween rural and urban areas. Ruralschools tend to have poorer facilitiesand fewer teachers are trained. In2000 the pass rate in rural schools wasonly 26 per cent compared to 62 percent in urban schools for Fiji SchoolLeaving Certificates.2

Information and CommunicationTechnology (ICT) has not been a toppriority among efforts to improve theeducational system and thegovernment remains vague on policiestowards making new technologiesmore accessible in schools. In its 2001Annual Report3, the Ministry ofEducation highlights Fiji’s efforts toadapt the educational system tochanging needs and global throughthe “ introduction of proposed

programmes in Agriculture Science,

Computer Education, Home

Economics, Industrial Arts and Office

Technology”. This general statementis the only reference made to ICT. Theministry’s focus over the next threeyears does not include any ICT specificprogrammes or objectives.

7.3.2 ICT training

The University of the South Pacificoffers a range of courses and degreesthrough its five faculties (Agriculture,Humanities, Law, Pure and AppliedSciences, and Social and Economic


32


Development). In addition to certificateand diploma ICT programmes, studentscan also obtain a bachelor’s degree witha single or double major in ComputerScience and Information Systems. In2002, 116 students were studyingcomputer science as their sole major(3.4 per cent of all bachelor degreestudents) and another 1’417 as a doublemajor (44.7 per cent of all bachelordegree students). In addition, ninestudents were enrolled in masters ordoctorate programmes in theDepartment of Mathematics andComputing Sciences. There are plansto expand the number of ICT coursesand to establish a Faculty ofComputational, Mathematical andInformational Sciences.

USP is also beginning to offer industry-accredited training programmes inareas such as networking andoperating systems. It is planning asurvey of companies with ICTemployees to compare the privatesector’s needs with the number of USPgraduates and their qualifications. Thiswill help USP plan its ICT curriculum.In regards to CISCO NetworkAcademies, two are being establishedin Fiji. One will be located at USP andthe other at the Fiji Institute ofTechnology (FIT), a post-secondaryinstitution which in 2000 enrolled over12’000 students.

It is not clear how many Fijiansgraduate in ICT from overseasinstitutions and return home. Theexisting data are not always up-to-date or clear about the field of study.For example according to statistics forscholarships offered by New Zealand,some 104 students studied therebetween 1995-2001 of which only onewas in the field of Computing andMathematical Studies.4 It is possiblethat the 15 obtaining degrees inEngineering included computerscience studies.

7.3.3 ICT manpower

Although Fij i has been able togenerate an increasing number ofgraduates, thanks to USP, it suffersfrom a shortage of experienced ICTprofessionals. Political instability hashad an impact with some ICT

professionals undoubtedlyemigrating.5

Recruiting from abroad is difficult sincework permits are not easily obtained.Companies need to justify that theycannot find a Fijian for the post. TheDepartment of Immigration tracks thenumber of expatriate workers in theworkforce, by occupation and countryof origin.6 However ICT is notidentified as a category; at the end of2000, there were 173 expatriateengineers of which some may be inthe ICT field.

7.4 e-government

The official Fiji Government web site,at www.fiji.gov.fj, is hosted andmaintained by the Ministry ofInformation (Figure 7.2). The siteincludes official press releases andlinks to government agencies withtheir own web site. In August 2003four out of 25 ministries as well assome agencies and the Parliament(www.par l i ament .gov. f j /ma in /index.aspx) had their own web sites.Notable exceptions include theMinistry of Communications and theMinistry of Education.

The main driver of e-governmentapplications is Information Technology

& Computing Services (ITC, atwww.itc.gov.fj), under the Ministry ofFinance and National Planning. Oneof its most successful projects was thecomputerization of the 2001 elections,facilitating registration and verificationof voters. A web site allowed votersto check their electoral details. Whilethis proved useful during the electionprocess, the website generated anumber of privacy issues, and hassince been brought offline.

The Fiji government does not provideany interactive applications but islimited to static websites providingtext based information and thedownloading of documents. Onlinedocuments are provided on the ICTweb site and include immigration, aswell as citizenship and passportapplications. According to ITC, the firstpilot e-government project will be thedevelopment of a dynamic website for

33

Figure 7.2: Fiji online

Fiji government website

Source: www.fiji.gov.fj.

the Immigration Department. This willallow customers to apply, pay for andreceive immigration services online.

Under the “People online” project ITCis working in three different areas toprovide citizens with access to theInternet and e-governmentapplications:

• One is to connect all 19 publiclibraries to the Internet. This isspecifically aimed at studentsthat do not have access to theInternet through theireducational institution.

• Another is the establishment ofrural telecenters. These wouldeventually be turned into aprivate business to becomesustainable. A pilot project thatwas carried out in the village ofVerata showed that a computerwith dial-up access was of greatinterest to citizens. The publicaccess point was so popular thatschool chi ldren from othervillages were prepared to walk foran hour just to be able to usethe Internet.

• A third, so-called ”Supercentres”is aimed at those in urban areaswho cannot afford to use Internetcafés. These one-stop e-government centres wouldprovide access only togovernment sites, and allowcitizens to complete forms online.The idea is to charge a small feeto make the project sustainable.One bottleneck is that this willonly become viable once anumber of signif icantgovernment applications areonline.

7.4.1 Government strategies

and plans

Fiji’s goals regarding ICT are outlinedin the country’s Strategic

Development Plan 2003-2005 (SDP).7

The overall goal, “Universal access to

international ly competit ive

information and communication

technology services” highlights theneed for market liberalization andsector reform. Other objectivesinclude enhancing rural coverage,aligning ICT training with marketneeds (including the provision of ICTequipment in schools) and introducing


34


e-government services. Concreteperformance indicators are includedto measure these objectives(Table 7.1). While the SDP tacklesFiji’s main barriers to the expansionand use of ICT, it does not specifyexactly how the objectives will beachieved. Without suff ic ientcommitment, including the necessaryfunding, it may be difficult to achievethe identified targets.

The IT Advisory Council (ITAC) wasset up in 2001 to advise the Minister

Table 7.1: Strategic Development Plan 2003-2005

ICT objectives and indicators

Source: Strategic Development Plan 2003-2005.

Policy Objectives

To reduce telecom rates in the short termby promoting more discussions betweenpotential investors in ICT services andFINTEL/Telecom Fiji to negotiate favourablerates under which the investments wouldbe viable.

Increased coverage of telecommunicationservices especially to rural areas.

In the medium term, liberalisation of thetelecommunications sector through morecompetition and the removal of exclusivelicences.

To ensure the regulatory and legalframework functions to promote ICTdevelopment.

To align Fiji’s ICT training to developmentsin the employment market.

To introduce “e-government” in order toraise efficiency of service delivery.

Key Performance Indicator

Reduction in telephone charges by an average of15 per cent by 2005.At lease one international call centre established by2003.

Telecommunication access to at least 400 moreunconnected villages by 2005.

Telecommunications legislation and regulatory bodyestablished by 2004.Exclusive telecommunications licenses removed by2005.Increased competition with more Internet ServiceProviders (ISP).Quality standards comparable to the global marketestablished by 2004.

All ICT related legislation reviewed and amendedby 2003.A fully developed internationally compliant privacysystem for the handling of information in the ICTsector in place by 2003.

An additional 10 schools per year with computers andinternet access. Corporate sponsorship provided foradditional schools.Teachers’ computer skills upgraded.ICT employment skills training modules adopted by ITtraining providers by 2004.

Integrated e-government development plan adoptedby 2003.Suitable government services available through theinternet by 2005.

of Communications on policy. TheCouncil includes representatives ofkey government ministries, theacademic community and the privatesector.8 The ITAC has been draftingan ICT Policy. The draft policy hasthe vision “to harness Fiji’s ideal

geographic location, competent

workforce and world-class information

technology infrastructure to promote

Fiji’s international competitiveness

and create a dynamic, vibrant and well

connected e-society.”9 It has threetarget areas: government, business

35

and community (Figure 7.3). Forgovernment, the policy calls for thedelivery of online services includingat least 25 by the year 2006. The draftpolicy also states that governmentshould make greater use of ICT toimprove its own internal processesincluding online procurement. Forbusiness, the policy calls for theestablishment of bilateral partnershipswith other nations that are welladvanced in business ICT applications.Greater l iberal ization of thetelecommunication sector is alsoidentified in the business section.Community identifies policies forgetting more citizens online, raisingawareness and providing training. Thedraft policy calls for the creation ofthe ICT Development Unit (ICTDU) toserve as a focal point for carrying outthe policy, identifies the annualamount the government shouldcontribute through 2006 to make thepol icy a real ity and notes thatimproved indicators will be needed tomeasure performance.

The Ministry of Communications ispresently drafting a new telecommunica-

Figure 7.3: Three thrusts of Fiji's ICT Policy

Source: ITAC, “Policy Directions and Strategies for the Development and Growth of Information andCommunication Technology”.

tions bill in consultation with otherstakeholders. The bill would replace the1989 Post and Telecommunication Decreethat currently guides the sector. The draftbill calls for the creation of theTelecommunication Authority of Fiji assector regulator, established a licenseregime, makes provision for universalservice and covers the facilitation ofcompetition by mandating interconnectionand forbidding the abuse of significantmarket power.

7.5 e-business

Fiji’s e-commerce capabilities arepresently limited but it hopes toexpand them significantly in thefuture. There is presently no domestice-commerce infrastructure (e.g.,capability for processing credit cardtransactions securely within Fiji) norare the needed laws in place meaningthat currently any electronictransaction does not technically havelegal validity in Fiji.

The Ministry of Commerce, BusinessDevelopment and Investment hasrecently formulated an e-commerce


36


policy framework that has beenendorsed by the cabinet. The policyexamines the various areas impactedby e-commerce and the steps neededto develop e-commerce. This includesissues such as payments systems andprivacy. The policy notes whichexisting laws would need to bemodif ied to cover electronictransactions and also calls for thecreation of a new legislation such asan Electronic Transaction Bill. Theprocess to create the neededlegislation would likely last around ayear and require some internationalassistance.

Fiji is hoping to attract ICT businessby leveraging on its English speakingworkforce, time zone (GMT +12 hoursso that processing can be carried outovernight for North American or Asiancustomers), geographical location inthe centre of the Pacific, relatively lowlabour costs and connection to theSouthern Cross fibre optic cable. Thegovernment offers a number ofincentives such as rapid one-stoppaperwork processing, low cost office

rental, duty free imports of ICTequipment, accelerated depreciationand other investment benefits andunrestricted repatriation of profits.The Fiji Islands Trade and InvestmentBureau (FTIB) is the statutoryorganization coordinating the effort.One bottleneck has beentelecommunication prices. Althoughpromotional material claims that Fiji’stelecom operators will match or betterregional tariffs for investors, FTIBclaims that high prices are the mainbarrier to attracting IT businesses.

Nonetheless, Fiji is beginning to havesome success attracting offshorebusiness processing centres bringingtwo on board in 2003. ACS, a largeUS outsourcing company, opened afacility in Suva that will eventuallyemploy 300 and provide back officeprocessing for ACS clients in the Pacificas well as US. One of the main reasonswas because of Fiji’s English speakingworkforce. Australia New Zealand(ANZ) Bank has established a callcentre called Quest providing supportto ANZ clients in the Pacific region.

37

1

“The major recipient of the profits is the Fiji National Provident Fund, or in a broader sense, the workers ofthis country. FNPF has now earned $44 million for its members in dividend payments since 1999, and stillretains its terminal value in ATH of 58.2% as a major shareholder.” Telecom Fiji. “ATH Releases 2003 AnnualReport.” Press Release. 1 August 2003.http://www.telecom.com.fj/newsroom/2003_press_release/01august03.shtml. [Accessed 18 June 2004].

2

Strategic Development Plan: 2003-2005. The Fiji School Leaving Certificates is passed at the end of highersecondary school, when students are, on average, 17 years of age.

3

Ministry of Education. Annual Report for the Year 2001. Parliament of Fiji. Parliamentary Paper No. 66of 2002.

4

This information is hosted by the Ministry of Finance and National Planning, at:http://www.fijichris.gov.fj/pages/SAC/SAC-LS-000.htm. [Accessed 18 June 2004].

5

According to the Ministry of Finance and National Planning web site, between 1986 and 1996, an estimated12% of Fiji’s 1986 labour force emigrated (33’000 of 274’000). Between 4’000 and 6’000 persons per yearleft the country between 1997 and 2001. See

6

See http://www.fijichris.gov.fj/pages/SAC/SAC-DI1.htm. [Accessed 18 June 2004].7

Government of Fiji. Rebuilding Confidence for Stability and Growth for a Peaceful, Prosperous Fiji. StrategicDevelopment Plan 2003-2005. November 2002.http://www.itc.gov.fj/docs/Strategic%20Development%20Plan%202003%20-%202005.PDF.[Accessed 18 June 2004].

8

ITAC members are: Mac Works; Ministry of Commerce, Business Development and Investment; University ofthe South Pacific; Ministry of Education; Connect; Fiji School of Medicine; FINTEL; ITC; Fiji Trade &Investment Board; Ministry of Information and Media Relations; Ministry of Commerce, BusinessDevelopment and Investment; National Planning Office and the Ministry of Communications.

9

Information Technology Advisory Council. Policy Directions and Strategies for the Development and Growthof Information and Communication Technology. Draft October 2003.


38


8. Conclusion

8.1 A sense of urgency

Fiji has several common and two specificproblems inhibiting its evolution into aninformation society. The commonproblems—limited infrastructure(specifically in rural areas), shortage ofskilled ICT workforce and computerliterate population, lack of awarenessabout the benefits of ICTs to meetdevelopment needs, lag in introducinglatest technology—are typical of manydeveloping countries. The uniqueproblems – uncertain politicalenvironment following the coup of May2000 and long-term telecommunicationmonopoly situation are not both widelytypical of most developing countries.There is hope that these latter problemscan be solved. It has now been threeyears since the coup and each daymarks a passage to normality. There isa feeling among many, that thetelecommunication monopoly isuntenable and is a barrier to realizingFiji’s potential in ICTs.

While ICT policy makers cannot domuch about the political environment,they can have an impact on the ICTsector. As long as the monopolysituation persists, it will be a brakeon Fiji ’s ICT potential. There issignificant evidence that Fiji is missingout on benefits that a more liberalizedtelecom environment would providein the form of lower prices for ICTservices, better quality and moreinnovation. Fiji’s telecom marketstructure is also an artificial constrainton the existing private operators bypreventing them from entering newsegments.

Fiji has a number of advantages thatwould be more fully exploited in aliberalized telecommunicationenvironment. The decision to connectto the Southern Cross fibre opticundersea cable was forward looking andensures the country an ample supplyof bandwidth. It now needs the

applications, services and growingmarket to exploit the Southern Crossconnection. Fiji’s strategic location in thePacific and headquarters of a numberof regional organizations is anadvantage as is its English-speaking,literate population. Another big plus isthe presence of the University of theSouth Pacific, the largest in the region.These factors can be more fullyoptimised by offering competitivelypriced and advancedtelecommunication services that wouldattract more organizations and supportthe development of an offshore ICTsector in areas such as call centres, backoffice data processing and film. FINTEL,the international operator notes thefollowing about the potential for theSouthern Cross cable:

“This will enable activities such

as call-centers, data processing

zones, tele-medicine and other

tele-services to be available in

Fiji via this cable. …It opens up a

huge range of opportunities such

as multimedia and cable TV and

offers secure, high-speed

service.”1

8.2 The small market

argument

It is often argued that small islanddeveloping states face difficulties inadopting ICTs due to isolation andsmall market size. Fiji’s connection tothe Southern Cross cable effectivelyends cyber-isolation by providing thecountry a fast connection to the digitaleconomy. Though Fij i may begeographically far away from majormarkets, in the Internet world it is nowas close as any country.

Small market size is often used as anargument for the maintenance of amonopoly for the provision oftelecommunication services. The logicis that the market is too small to attractinvestors. The difficulty with this

39

argument is that it is untested with amonopoly established before there hasbeen the experience that wouldvalidate it (Box 8.1). In any case, thisargument is becoming less tenable andtoday there are a growing number ofsmall developing nations—withpopulations smaller than Fiji—thathave competitive telecommunicationmarkets (Table 8.1).

Exclusivity for the provision of telecomservices is a blessing for monopolists.There are few if any examples ofmonopoly telecom operators losingmoney. In fact, operators in monopoly

Table 8.1: Competition in small countries

Countries with competitive telecom markets, population less than one million, developing nations,August 2003

Note: OECS = Organization of East Caribbean States.Source: ITU adapted from ECTEL, World Bank, GSM World and country reports.

Country Population2002

GNIper

capita2002(US$)

Competitionfrom

Note

St. Kitts &Nevis

47'000 6’370 Sep. 2001 OECS agreement with Cable & Wirelessintroducing full competition. Two new licensesissued.

Dominica 78'000 3’180 Sep. 2001 OECS agreement with Cable & Wirelessintroducing full competition. Marpin Telecomssubsequently awarded mobile, ISP and fixedlicenses.

Seychelles 83'000 6’530 Dec. 1998 Second mobile operator launched in December1998.

Tonga 99'000 1’410 Aug. 2002 Shoreline Communications launched as secondmobile operator.

Grenada 106'000 3’500 Sep. 2001 OECS agreement with Cable & Wirelessintroducing full competition. Two new mobilelicenses awarded.

St. Vincent 117'000 2’740 Sep. 2001 OECS agreement with Cable & Wirelessintroducing full competition. Two new mobilelicenses awarded.

St. Lucia 160'000 3’840 Sep. 2001 OECS agreement with Cable & Wirelessintroducing full competition. Two new mobileoperators launched in 2003.

Suriname 446'000 1’960 1998 ICMS granted an overall concession to providepublic services as second operator.

Guyana 879'000 840 Feb. 2001 Cel*Star awarded mobile license.

Fiji 834’000 2’160 2014? Presently monopoly until 2014.

markets tend to make higher profitsthan those in competitive ones. Fijiis no exception. While the ratio ofATH’s profits to its revenues is 20 percent, close to the average of othersmall islands states, those of VodafoneFiji and FINTEL are far higher at 42and 35 per cent respectively.Furthermore, the level ofreinvestment of profits into telecominfrastructure is low in Fiji comparedto other nations. The ATH group’scapital expenditure ratio to revenuesis 24 per cent compared to arecommended ratio of 40 per cent andthe small islands states average of

8. Conclusion

40


Box 8.1: How small is too small?

One of the most noticeable aspects of many of Asia-Pacific’s small island states is how few havecompetitive mobile markets. Out of the region’s 21island economies with a population of less than onemillion, only two—Guam and Macao, China—had morethan one mobile operator in 2002. The lack of multipleoperators is surprising considering the dramaticimpact that competitive mobile markets have had onincreasing telecommunication access in othercountries in the region.

The gut reaction is that the small islands are too smallto attract multiple players. Yet, as the case of Guamand Macao, China illustrates that is not entirely true.With 454’000 inhabitants, Macao, China has half thepopulation of Fiji (844’000 population), which hasonly one operator. With a population of 158’000, Guamhas fewer inhabitants than eight other Pacific islandnations. And if population size was an issue how doyou explain the tiny Principality of Liechtenstein wherethere are no less than four mobile operators servinga population of just over 30’000?

It appears that income rather than size has more ofa bearing on whether a mobile market has competitionor not. Fairly wealthy small economies such asLiechtenstein, Luxembourg and Iceland with per capitaincomes close US$ 30’000 all have multiple mobileoperators. However wealth provides less of anexplanation for the Indian Ocean island of theSeychelles, which is considerably poorer at per capitaincome of US$ 6’500 and a population of 80’000 butwith two mobile operators. Contrast that with Brunei,whose per capita income is twice that of the Seychellesand whose population is four times larger. Yet Bruneihas only one mobile operator and mobile penetration15 points less than the Seychelles. Another exceptionto the wealth argument is Cambodia, one of the

poorest nations in the Asia-Pacific region whose percapita income of some US$ 250 is around one quarterthe average Pacific island. Yet Cambodia manages tosustain no less than four mobile operators.

The argument that wealth dictates thecompetitiveness of a mobile market also does notseem to hold true when comparing FrenchDépartements d’Outre-Mer (DOMs) and Territoiresd’Outre-Mer (TOMs). Income-wise the DOMs and theTOMs fall within a range of around US$ 15’000 percapita and all have a population of less than one millioneach. The former consists of Guadeloupe, Martiniqueand French Guyana in the Western Hemisphere aswell as Réunion in the Indian Ocean. The TOMs areFrench Polynesia and New Caledonia in the Pacific.The DOMs all have more than one mobile operatorwhereas the TOMs have only one. This seems to makea noticeable difference with the DOMs having closeto twice the mobile penetration of the TOMs (BoxFigure 8.1).

Why should the size of a country matter? In otherwords why not throw open the mobile market andsee if there are any takers? Let investors decide theissue. The problem is that many Pacific small islandswill not allow mobile competition, partly a legacy ofexclusive licenses granted to incumbent operators.The results have been less than impressive withmobile densities hovering at 1.4 compared to 5.8 inother developing countries in the region. One goodreason for acting now and opening mobile markets isthat smaller countries are ideal test beds for newwireless technologies. Take the Isle of Man in theUnited Kingdom with 73’000 inhabitants. It becamethe first place in Europe to have third generationmobile service when it was launched on4 December 2001.

Box Figure 8.1: It's better to be a DOM than a TOM

-

10

20

30

40

50

60

70

80

1995 1996 1997 1998 1999 2000 2001 2002

Mobile subscribers per 100 inhabitants,

French overseas economies

DOMs

TOMs

Competitive markets

Monopoly markets

79.0

69.7

68.2

65.9

49.3

37.5

36.6

35.7

Martinique

Guadeloupe

DOM

Réunion

French Guiana

French Polynesia

TOM

New Caledonia

Mobile subscribers per 100 inhabitants,

French overseas economies, 2002

Two mobile operators:

One mobile operator:

Source: World Telecommunication Indicator Database.

Adapted from ITU, Asia-Pacific Telecommunication Indicators 2002.

41

28 per cent. Fiji’s ratio of telecominvestment is far less than Cape Verdeand Mauritius, which have a higherlevel of profitability than Fiji, butreinvest more of their earnings backinto the telecommunication sector.

The consequences of Fiji’s relativelylow level of investment are evident inthe national transmission network andmobile coverage. A major barriertowards greater telephone penetrationin rural areas is the backbone networkdoes not cover them. Contrast thatwith the Maldives, a far more stretchedout but smaller populated country thanFiji and economically, at the same levelof development. The Maldives hassucceeded in providing telephoneservice to all of its 100 inhabited islands.In terms of mobile coverage, Fiji’s figureof 50 per cent is the second lowestamong countries at similar levels ofeconomic development. The mobilenetwork covered almost three quartersof the population in the Maldives atthe end of 2003 even though theMaldives has a smaller market, hasmore inhabited islands, is more spreadout and has a higher rural populationthan Fiji. Therefore it cannot be arguedthat the reasons for Fiji’s low level ofmobile coverage is due to its level ofeconomic development, small marketsize, level of rural population ornumber of islands.

8.3 Falling behind

Fij i ’s relative posit ion intelecommunication penetrationrankings has been declining over thelast 30 years. It has gone from the82nd ranked country in telephonedensity in 1975 to the 99th in 2002.Its overall telephone density was just3.2 points less than the world averagein 1975; by 2002 the gap had risen to14.3 points. There seems to be adegree of complacency about thispossibly because Fiji is performingabout where it should be in terms ofits level of economic development(Figure 8.1, left). However Fiji is fallingbehind other countries that it had beenahead of just over a decade ago suchas Mauritius, Cape Verde and theMaldives (Figure 8.1, right). The lattertwo countries are noteworthy in thatthey are Least Developed Countries,a lower development status than Fiji.

The ITU has been using the Mosaicframework to assess e-readiness innations. Advantages of this frameworkinclude its appl ication to manycountries, detailed analysis andcomprehensive assessment by lookingat a number of different factors. Theframework was appl ied to Fij i(Box 8.2). Fiji ranks twelfth out of20 economies that have been thus faranalysed. One of the features of the

Figure 8.1: Where Fiji stands

Source: ITU World Telecommunication Indicator database.

0.1

1.0

10.0

100.0

$100 $1'000 $10'000

Total telephone density, 2001

GDP per capita, US$

Fiji

0

10

20

30

40

50

60

1990 1995 2001 2002

Total telephone subscribers (fixed+mobile),

per 100 inhabitants

Mauritius

World

Cape Verde

Maldives FIJI

8. Conclusion

42


Mosaic framework is that the valuescan be applied to a radar chart thatallows a visual assessment of wherea country is relatively strong andwhere it is weak. In the case of Fiji, itis relatively weak in the areas ofmarket structure and dispersion.

In November 2003, the ITU launchedthe Digital Access Index (DAI), a newmeasure for gauging how countriesare performing relative to each otherin providing access to ICT. The DAI isbased on five categories that impacta country’s ability to provide access:infrastructure (fixed and mobiletelephones), affordability (20 hour permonth Internet tariff), knowledge(literacy and school enrolment),quality (broadband subscriptions andinternational Internet bandwidth) andusage (Internet penetration).Countries are categorized into one offour groups: high, upper, medium andlow access. With a value of 0.43 (outof possible 1.0), Fiji falls into themiddle of the medium access groupand ranks 85th out of 178 economies.Within the Pacific, Fiji ranked 3rd afterAustralia and New Zealand (howeveronly five developing Pacific islandnations were included in the DAI).Among Small Island DevelopingStates, Fiji placed 17th out of the26 SIDS considered (Box Figure 8.2,left). Fij i ’s category values arecompared to the SIDS average togauge its relative strengths andweaknesses. Fiji compares well interms of knowledge and affordabilitydue to its relatively high literacy andschool enrolment and flat rate localcall pricing for dial-up Internet access.It does less well in infrastructure,usage and quality.

8.4 Recommendations

• Market liberalisation. Fiji ismissing the benefits that a morecompetitive telecom marketwould provide such as lowerprices, better quality, enhancedinnovation and greater customerfocus.

The existing operators wouldbenefit from addit ionalliberalization since they could

enter closed markets. Indeed thetwo holders of exclusivities in thenational and internationaltelecommunication market haveboth suggested they are notopposed to competition. FINTELstated:

“We will welcome competitionas long as it is managedproperly and it is in accordancewith certain processes andwith the regulatory frameworkin the country.”3

ATH, holding company for thegovernment’s shares in TelecomFiji and Vodafone Fiji notes:

“…the Company is not againstcompetition per se, providedthere is a level playing field forall players in the market.”4

The two foreign investors in theinternational and mobileoperators are no strangers tocompetition. Many of Cable andWireless’ exclusive licenses in theCaribbean have been terminatedearlier in order to introducecompetition.5 Out of 28 countrieswhere Vodafone operates mobileservices, only Fiji is a monopoly.6

The prevailing sentiment is thatcompetition is inevitable and stepsare being taken to open thetelecommunication market. Thisincludes preparation of a newtelecommunication act, theregularization and issuance oflicenses and solvinginterconnection issues for ISPsthat have already been licensed.This process should not be allowedto stall and if anything should beaccelerated. Fiji cannot afford tofall back and miss out on theopportunities. The earliest possibleintroduction of competition shouldbe the goal. If this is phased inand the period extends more thana year, then the current operatorsshould be obliged to meet specificnetwork targets in terms of access.

• Market structure. Fiji not onlyhas a monopolized telecom sector,

43

Box 8.2: State of the Internet in Fiji

The ITU has been using a framework to analyze thedevelopment of the Internet in different nations.Developed by the Mosaic group, the frameworkconsists of values for six different elements that havean impact on Internet take-up. Values range from 0to 4; the higher the value, the better.Pervasiveness measures the overall access rate tothe Internet. Fiji is rated common, 3, as the estimatednumber of users is 50’000 for a penetration rate of6.1 per cent of the population (above the 1 in 100 toreach the pervasive level).2

Dispersion measures the geographical spread ofInternet access. Here Fiji is rated 2, moderatelydispersed. While dial-up Internet is available for theprice of a local call in most urban areas, this is notalways the situation in rural areas. Either the area iswithout telephone service or there is no local point ofpresence meaning that Internet access would incurlong distance charges.

Absorption measures the extent to which differentsectors of the economy are using the Internet. Fiji israted 2, moderate. Most ministries in the capital areconnected to the Internet however only around tenper cent of civil servants have access. While theUniversity of the South Pacific has good connectivity,less than five per cent out of a total 900 primary andsecondary schools have access to the Internet. Theextent of computerization in business is not known.Larger companies would have Internet access and“commercial” (.com.fj) has by far the largest numberof domain registrations. However it is estimated thatcomputerization among smaller and medium

enterprises is low. The Ministry of Health has anInternet connection as do some hospitals.

Infrastructure measures the extent and speeds ofbackbone and local access networks. Fiji is rated 2,expanded. Fiji recently connected to the SouthernCross fibre-optic cable for international connectivity.However, the predominant method of access to theInternet is still via low-speed, dial-up. Broadbandconsumer access technologies are not available.

Organization measures market conditions. Fiji israted 1.5, between single and controlled. Althoughseveral ISP licenses have been issued, there is onlyone ISP in operation. International connectivity isunder monopoly provision.

Sophistication measures how usage ranges fromconventional to highly sophisticated. Fiji is rated 2,conventional. The usage of more advanced applicationssuch as media streaming, e-commerce transactions andgovernment interaction are still developing.

The ITU has carried out evaluations for 20 economiessince January 2000. One way of comparing economiesis to sum the individual scores. The highest rankedeconomy thus far is Hong Kong, China with an overallscore of 22.5 (out of a possible maximum of 24). Fijiranks thirteenth with a score of 12.5. One benefit ofthe Mosaic framework is that it highlights which areasa country need to improve to enhance its Internetdiffusion. In the case of Fiji, this would be dispersionand organizational, the areas where it is below theaverage of the 20 countries evaluated.

Box Figure 8.2: State of Internet in Fiji

0.00 0.10 0.20 0.30 0.40 0.50 0.60

Solomon Islands

Papua New Guinea

Samoa

Cape Verde

Maldives

Fiji

Mauritius

St. Lucia

Jamaica

Seychelles

Infrastructure Affordability Knowledge

Quality Usage

0.00

0.20

0.40

0.60

0.80

1.00Infrastructure

Affordability

KnowledgeQuality

Usage

SIDS

Fiji

Note: The higher the value, the better (0=lowest, 4=highest).Source: ITU.

8. Conclusion

44


but also has different operators ineach segment: local, mobile,international and Internet. Thisadds to higher pricing since mobileor international customerstypically have to go through twodifferent operators (whetherdirectly or indirectly). Existingnetworks such as that of the FEAare also under utilised since theycannot currently providetelecommunication services. Fijicannot afford to pay high pricesand have infrastructure underutilised.

Operators in Fiji are making anexceptionally high level of profitscompared to other economies.While their shareholders may bebenefiting, the economy as awhole is suffering through highercosts. For example FTIB has ahard time attracting investors inthe IT industry because of highcommunications costs.

• Tariff rebalancing. Fij i ’stelecommunication tariffs areunsustainable. International,data and mobile prices are highand local services low, comparedto underlying costs. Arealignment of prices wouldfoster greater investment in basicnetwork infrastructure. One onlyhas to point to mobile pricing toshow that fixed prices could beraised. Mobile is much moreexpensive yet has just as manyusers. However it is important toretain a pricing structure that willnot adversely affect Internetaccess. The current flat rate localcall charge is a benefit for dial-up Internet access. Changing toper minute telephone usagecharges for dial-up Internetaccess would have an adverseimpact on Internet usage.

• Universal access—Clear andmeasurable targets need to beestablished for universal serviceand universal access.Specifically, instead of focusingon the telephone densityindicator, which is too vague,more insightful measurements

should be used. These includethe number of villages withtelephone service, thepercentage of the populationcovered by a cellular mobilenetwork signal, distance ofpopulation from a telephone andthe percentage of householdswith a telephone (disaggregatedby fixed only, mobile only, andboth fixed and mobile). Thoughtalso needs to be given to the ideaof including ICT such as Internetaccess in universal access andservice policies.

The specific way that universalservice and access is to beachieved also needs to beaddressed. There is no mentionof this in the drafttelecommunication act. Forexample, wi l l operatorscontribute to a fund and howwould the fund be administered?Or would special tariffs beavailable for disadvantagedsegments of the population?Also, while rural communicationsare important and the ruralcommunity underserved, thisshould not be the sole focus ofuniversal service and accesspol icy. Fij i ’s population isbecoming more urban and thereare many citizens in towns andcit ies who lack easy andaffordable access. A pol icyproviding preferential access forpublic facilities such as schoolsand libraries also needs to beestablished.

There is also a need to coordinatedifferent ideas for communityaccess. For example there appearto be conflicting sentimentsabout how rural telecentresshould be implemented. It mayalso be practical to leverage onthe network of post offices orother such facil it ies spreadthroughout the country toprovide locations for publicInternet access.

The issue of land as it relates tothe installation of communication(and electric) infrastructure also

45

needs to be resolved in order toenhance public access.

• ICT policy and regulation—There is a need to strengthen ICTpolicy and regulatory capacity,particularly since the market isheaded in the direction ofadditional liberalization. Whilethere is not much need toregulate in a monopoly situation,this becomes critical with theintroduction of competition.

One area of attention would be areorganization of sector oversight.Currently, the Ministry ofCommunications carries out mosttelecom policy activities, with aunit in the Ministry of Financeresponsible for governmentcomputerization, the Ministry ofCommerce, BusinessDevelopment & Investmentresponsible for e-commerce andthe FTIB handling thedevelopment of ICT industry. Theidea of creating a super ICTministry that would combineelements of the previous threeshould be studied. There are plansto create a telecommunicationregulator and this should becarried out as soon as possible.The IT Advisory Council shouldmeet on a more formal and regularbasis and possibly be chaired bythe Prime Minister to demonstratethe importance of this sector andraise its visibility.

• Statistics . The operatorsgenerally collect the only data onthe telecommunication sector.The Bureau of Statistics, thenational statistics office, collectedthe number of households witha telephone and television in the1996 Census. The 2003Household Income and

Expenditure Survey wi l ladditionally for the first time,have data on the number ofhouseholds with a mobile phoneand Internet access, includingexpenditure. These statistics arecrucial for the analysis of thelevel of universal service andshould be used by policy makers.

Data is lacking at individual levelparticularly for PC and Internetaccess and use. There is noreliable figure for the number ofInternet users in the nation letalone a breakdown by gender,location, income, ethnicity, etc.Thus it is impossible to make anaccurate assessment of the levelof ICT usage or the extent of Fiji’sdigital divide. The Bureau ofStatistics with the support of theMinistry of Communicationsshould collect this data in anannual survey. There are modelsurveys available from Eurostatand the OECD upon which thequestionnaire should be based.

One area for which there isscarce data is the impact of ICTon the economy and ICT usageat the enterprise level. Hopefullythe former can be resolved tosome extent with the adoptionof the new UN guidelines onmacroeconomic statistics, whichfor the first time, will supportanalysis of the ICT sector. Thelatter, ICT business usage, shouldbe col lected in a specialquestionnaire. There areguidelines available for this typeof survey.

• E-government. ICT strategiesneed to be backed by thenecessary funding. ITC Services,which has a large range of ideasand the expertise, needs to beprovided with the appropriateresources to develop e-government appl ications.Existing expertise should be usedto advance ICT. A solution has tobe found to improve the qualityof GOVNET. Unless the speed ofthe network and the quality ofservices do not improve, the e-government project will not besuccessful. The group in chargeof e-government must be giventhe authority to standardize e-government services andapplications.

All government ministries anddepartments should be onlineand provide basic information on

8. Conclusion

46


their sector. Even very basic siteswould provide an importantstarting point and guarantee Fiji’srepresentation on the web. ITCServices should be given themandate to coordinate this effortand standardize sites.

• Leverage USP. In many nations,the tertiary sector has played akey role in the development andsustainability of the Internet andas an important source of ICTresearch and development. Thegovernment should use theUniversity of the South Pacific(USP) as a centre of excellencefor new applications and as atesting ground. Investment inUSP would have potentially highpay-off for the government. Thisincludes more ICT courses andthe formation of ICT experts, aswell as the testing of newtechnologies and applications.Students could help thegovernment develop applicationsas part of their studies. Thecurrent situation, especially thehigh cost for bandwidth, isinhibiting USP from developing itspotential. As an educationalinstitution USP should either beal lowed to provide its ownInternet connection or get verylow cost Internet access. This isin keeping with the situation inmany other nations where theacademic system has preferentialaccess and pricing.

• ICT workforce. While there isa general agreement that thereis a shortage of experienced ICTprofessionals, the governmenthas not undertaken measures toanalyse the gap. Such a study

would be a f irst step tounderstanding the currentsituation.7 Fiji needs to knowexactly how many ICTprofessionals it has and howmany it needs. Since the USP isplanning to carry out an ICTsurvey among businesses andthe public sector, the governmentshould use this opportunity toparticipate in the study. The datathat is currently collected on Fiji’shuman resources (mainly by thePublic Service Commission) needto be modified to include morespecific information on ICT (asopposed to general categories,such as ‘engineering’ or‘technology’). In order toalleviate current ICT labourshortages, the governmentshould make work permits forICT specialists easier to obtain.Take the example of developedcountries that facilitate workprocedures for foreignprofessionals because of thehighly competitive internationalmarket for ICT ski l ls. ICTbrainpower is essential for theoveral l development of thecountry.

• E-schools. One of the toppriorities of the governmentshould be to develop a programfor the provision of computers toal l primary and secondaryschools and connection to theInternet. This could includeobligating ISPs to offer apreferential tariff for academicinstitutions. The Ministry ofEducation needs to define andimplement an ICT curriculum forsecondary schools and offerrelevant course material.

47

8. Conclusion

1

http://www.pacificislands.cc/pm12001/pmdefault.php?urlarticleid=0010. [Accessed 18 June 2004].2

There is no formal Internet user survey conducted in Fiji. The ISP estimates that there are 50’000 users.They multiplied the 8’000 subscriber base by three (24’000) and added to that estimated leased line andLAN users in government bodies and the university.

3

“Interview with Mr. John Richards, Chief Executive of Fintel.” 7 February 2003. World Investment News(WINNIE). http://www.winne.com/topinterviews/richards.htm. [Accessed 18 June 2004].

4

“Draft Proposed Telecommunications Bill.” 4 June 2003. South Pacific Stock Exchange CompanyAnnouncement. http://www.spse.com.fj/publish/page_270.shtml. [Accessed 18 June 2004].

5

For example, both Barbados and Jamaica ended Cable and Wireless owned telecommunication companiesmonopoly and introduced competition in October 2001 and March 2000 respectively. The Organization ofEast Caribbean States took a regional approach, terminating the Cable and Wireless monopolysimultaneously on 7 April 2001. See the agreement on the Eastern Caribbean Telecommunications Authorityweb site at: http://www.ectel.info/about/Agreement.pdf. [Accessed 18 June 2004].

6

See Vodafone’s list of equity interests and partner networks available at:http://www.vodafone.com/popup_opco_table_summary/0,3037,CATEGORY_ID%253D302%2526LANGUAGE_ID%253D0%2526CONTENT_ID%253D20194,00.html?#.[Accessed 18 June 2004].

7

For an example, see the “Report of the Sub-Committee on Demand for Information Technology Manpower(2001-2006)” carried out in Mauritius by the Ministry of Education and Scientific Research available athttp://ministry-education.gov.mu/irrept01.htm. [Accessed 18 June 2004].

49

Annex 1: Acronyms

ADSL Asynchronous Digital Subscriber Line

ATH Amalgamated Telecommunication Holding Limited

ATM Automatic Teller Machine

CDMA Code Division Multiple Access

DAI Digital Access Index

DOM Départements d’Outre-Mer

F$ Fiji Dollar. The national currency. The 2002 annual average rate ofF$2.19 per one United States dollar is used to make conversions in thereport.

FEA Fiji Electricity Authority

FCC Federal Communications Commission

FINTEL Fiji International Telecommunications Limited

FIT Fiji Institute of Technology

FJ Fiji’s Internet domain name

FNPF Fiji National Provident Fund

FTIB Fiji Islands Trade and Investment Bureau

FMIS Financial Management Information System

FPTL Fiji Post and Telecommunications Limited

FSM Fiji School of Medicine

GDP Gross Domestic Product

GOVNET Government Network

GPRS General Packet Radio Services

HDI Human Development Index

HIES Household Income and Expenditure Survey

ICT Information and Communication Technology

ICTDU ICT Development Unit

IANA Internet Assigned Number Authority

ISDN Integrated Services Digital Network

ISP Internet Service Provider

ITAC Information Technology Advisory Council

ITC Information and Technology and Computing Services

ITU International Telecommunication Union

LAN Local Area Network

MMS Multimedia Messaging Services

MoH The Ministry of Health

PC Personal Computer

PSTN Public Switched Telephone Network

SIDS Small Island Developing States

Annexes

50


SIM Subscriber Identity Module

SMS Short Message Service

SPSE South Pacific Stock Exchange

TOM Territoires d’Outre-Mer

UNDP United Nations Development Programme

UNESCO United Nations Educational, Scientific and Cultural Organization

USP University of the South Pacific

VSAT Very Small Aperture - Satellite - Terminal

WAP Wireless Access Protocol

WSIS World Summit on the Information Society

51

Annex 2: Meetings

Entity 26th June 27th June 30th June 1st July 2nd July

Ministry of Information,

Communications, and Media

Relations

11am-12pm

1:30-2:30pm

University of the South Pacific 12-1pm

National IT Advisory Council. 1-2pm

Ministry of Commerce, BusinessDevelopment, and Investment

2.30-4.00pm

Vodafone 9–10am

UNDP Fiji 11-12pm

Ministry of Finance and NationalPlanning

2.30-4:30pm

CONNECT 10am-12pm

Bureau of Statistics 12-1pm 9-10am

Fiji Electricity Authority 2:30-3:30pm

Minister of Communication 4:30-5:00pm

SOPAC 10-11am

Pacific Island Forum (ForumSecretariat)

11-12am

PITA 12-1pm

FINTEL 2.30-4.00pm

The Fiji Islands Trade andInvestment Bureau

9-10am

Telecom Fiji 10-12am

Ministry of Education 9-10am

Ministry of Health 12-1pm

Fiji Post 12-1pm

Annexes

52


Annex 3: ICT statistics

Year Ending 31.12

Unit 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

DEMOGRAPHY, ECONOMY

Population 10x3 759 768 774 788 797 806 810 813 820 826Households 10x3 127 128 129 130 132 133 134 136 137 138Gross domestic product 10x6 2'673 2'800 2'962 3'060 3'283 3'588 3'505 3'836 2'089 ...Average annualexchange rate per US$ 1.46 1.41 1.40 1.44 1.99 1.97 2.13 2.28 2.19 1.90Consumer price index 98 100 103 107 113 115 116 121 122 ...

TELEPHONE NETWORK

Main telephone lines 59'471 64'772 70'018 71'793 76'933 81'518 86'400 92'222 97'515 102'023Main tele. lines p. 100 inhab. 7.84 8.43 9.05 9.12 9.66 10.11 10.66 11.34 11.90 12.35% digital main % 85.6 85.6 84.0 99.3 99.7 99.8 100.0 98.0 99.8 ...% residential main % 56.0 56.0 56.0 56.0 56.0 56.0 56.0 56.0 60.0 ...% main lines in urban 44 44 44 44 80 ... ... 44 44 ...Public payphones 392 577 687 822 887 1'018 1'259 1'500 1'000 ...Line capacity of local exchange 70'086 77'610 84'512 90'778 91'582 94'700 98'000 105'980 110'726 ...Waiting list for main lines 9'360 8'927 8'103 6'445 3'125 5'166 5'139 4'032 4'969 ...

MOBILE SERVICES

Cellular mobile telephone subscribers 1'100 2'200 3'700 5'200 8'000 23'380 55'057 80'933 89'900 109'882- Digital cellular 1'100 2'200 3'700 5'200 8'000 23'380 55'057 80'933 89'900 109'882- Cellular prepaid ... ... ... ... - - ... ... 81'812 100'806Coverage of population % ... ... ... ... ... ... 40.0 49.5 55.0 55.0Cellular sub. per 100 inhab. 0.14 0.29 0.48 0.66 1.00 2.90 6.79 9.95 10.97 13.31

OTHER SERVICES

ISDN - - - - - - - 20 ... ...ISDN B channel - - - - - - - 40 ... ...Private leased ... ... ... ... 1'322 ... ... 84 500 ...

TRAFFIC (minutes)

- Local telephone 10x3 ... ... ... ... ... ... 258'118 89'300 89'300 ...- National trunk telephone 10x3 ... ... ... ... ... ... 42'470 39'500 39'500 ...Int'l outgoing telephone 10x3 14'289 15'148 16'000 17'155 17'985 18'800 15'025 19'700 23'165 ...Int'l incoming telephone 10x3 24'000 27'112 30'000 34'231 34'998 ... 40'385 57'000 67'959 ...Total mobile 10x3 ... ... ... ... ... ... 17'347 21'684 39'782 ...Mobile SMS sent 10x3 ... ... ... ... ... ... ... ... 2'992 ...

STAFF

Full-time telecommunication staff 1'106 1'068 1'061 1'096 1'183 1'197 1'354 1'585 2'000 ...- of which: female ... ... ... ... 920 ... ... ... 600 ...

QUALITY OF SERVICE

% teleph. faults cleared by next day % ... ... ... ... ... ... 60 90 75 ...Faults per 100 main lines per year % 190.0 180.0 167.0 194.0 153.0 128.0 135.0 117.0 9.3 ...

TARIFFS

Residential teleph. connection 114.00 114.32 84.52 84.52 84.52 84.52 84.52 84.52 84.52 86.45Business teleph. connection 286.00 285.98 285.95 285.95 285.95 285.95 285.95 285.95 285.95 ...Residential telephone monthly subscription 5.32 5.32 5.32 5.32 5.32 5.32 3.12 2.84 2.84 2.84Business telephone monthly subscription 6.78 6.78 6.78 6.78 6.78 6.78 4.58 4.16 4.16 ...3-minute local call (peak) 0.11 0.12 0.12 0.12 0.12 0.12 0.12 0.12 0.12 ..3-minute local call (off-peak) 0.11 0.12 0.12 0.12 0.12 0.12 0.12 0.12 0.12 ...Cellular connection charge 110 110 110 110 110 110 110 - - ...Cellular monthly subscription 44 44 44 44 44 44 44 33 33 ...Cellular - 3-min. local call (peak) 0.60 1.80 1.80 1.80 1.80 1.80 1.80 0.66 0.66 ...Cellular - 3-min. local call (off-peak) 0.60 1.80 1.80 1.80 1.80 1.80 1.80 0.66 0.66 ...

REVENUE AND EXPENSE

Total telecom services revenue 10x6 93.00 97.40 106.70 111.90 123.00 138.00 186.50 201.00 155.00 ...- Telephone service revenue 10x6 72.00 79.00 92.80 90.50 100.30 100.50 149.50 148.00 88.00 ...- Mobile communication revenue 10x6 0.80 1.30 2.20 3.40 4.70 26.00 26.37 37.66 53.01 ...

CAPITAL EXPENDITURE

Annual telecom. invest. 10x6 10.30 23.30 34.00 39.00 21.50 32.00 32.65 42.00 83.00 ...- Mobile communication invest. 10x6 ... ... ... ... ... ... 5.96 8.21 4.90 ...

BROADCASTING

Television receivers 50'000 70'000 75'000 78'000 80'000 88'908 92'000 95'100 96'000 ...Television equipped households 45'000 63'000 67'500 70'200 72'000 80'017 82'800 85'590 87'000 ...Home satellite antennas 70 190 ... ... ... 139 105 111 113 ...

INFORMATION TECHNOLOGY

Personal computer ... ... ... ... 32'000 34'000 36'000 38'000 40'000 ...Internet Internet subscribers 60 60 407 1'080 2'061 2'500 3'500 5'500 7'600 9'000Estimated Internet users 60 70 500 1'750 5'000 7'500 12'000 15'000 50'000 55'000International Internet Bandwidth (Mbps) - ... ... ... ... 1 4 ... 8 12Internet users per 100inhab. 0.01 0.01 0.06 0.22 0.63 0.93 1.48 1.84 6.10 6.66Public Internet access facilities ... ... ... ... ... ... ... 11 15 ...

National Currency: Dollar

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