itu paper on the internet

8/3/2019 ITU Paper on the Internet

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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 ITUs Internet Case Study web page athttp://www.itu.int/ITU-D/ict/cs.

The report may not necessarily reflect the opinions of the ITU, its members or the

government of the Republic of the Fiji Islands.

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

ITU 2004


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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 ...................................................... 123.3 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 .................................................................. 51Annex 3: ICT Satistics ............................................................. 52


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Figures

2.1 Map of Fiji ...........................................................................32.2 Fijis 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 .......................................................................... 337.3 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. 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 looks

at 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 measure

of 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 Provider

industry 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.


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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. Final

Acts 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) projects 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 3000 kilometresnortheast of Sydney, 2000 kilometresnorth of Auckland and 5000 kilometressouthwest of Hawaii (Figure 2.1).Covering a land area of 18333 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.

Fijis 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 775000,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 820000. Fiji has anaverage household size of5.3 people with some155000 households. Thecountry has a population density

of 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 census

51 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: Fijis 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 than

half of Fijis population (53 per cent)are Christians, about 38 per cent areHindus and eight per cent are Muslim.

Fijis 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$ 2160 was the highest of the eightfully independent Pacific Island states.The World Bank classifies Fiji as aLower Middle Income economy.

Its open economy is relat ivelydiversified. 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 some400000 tourists generatingF$ 568 million in 2002 (Figure 2.2,left).

Fijis 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%

Other53%

Tourism

23%

Foreign exhange earnings, 2001

-40

-30

-20

-10

0

10

20

30

1998 1999 2000 2001 2002

GDP

Tourist arrivals

Percentage change


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2. Background

other communities and between ruraland urban areas. Around a quarter ofthe population is estimated to be living

in 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 Development

Programme (UNDP) ranked Fiji 81st

outof 175 countries in its 2003 HumanDevelopment Index (HDI) (Table 2.2).2

Fijis 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 would

suggest. 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 Island Indicators 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) 4850 132 P.N. Guinea 103 Cape Verde 86 Maldives


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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 two

coups, in 1987 and 2000. Thosebehind the 2000 coup have beenconvicted and democratic elections in2001 confirmed a new Prime Minister,native Fijian Laisenia Qarase.


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1

A significant characteristic of Fijis economy is its traditional form of land ownership. Similar to the SolomonIslands and Samoa, some 85 per cent of Fijis 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


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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 Fijis 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 ofFijis households to have a fixed lineand almost thirty to reach universalservice or over 90 per cent ofhouseholds with a telephone line(Figure 3.1, left). It appears there hasbeen little substitution of mobile for

fixed 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.

Fijis 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. However

it does not appear that telephonetariffswhich 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


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level for almost a decadeare a majorbarrier to fixed telephone access. Fijislocal 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, payphone

availabil ity and mobile cellularpopulat ion coverage. There areroughly 1650 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 Fijian

population 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 2000 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. There

are another 1000 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 with

international, mobile and domesticservices operated by different entities.

3. Pervasiveness


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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$20000 per installation it wouldrequire around F$18 million to providetelephone service to all of Fijis

unconnected villages.3 At the currentlevel of government contributions, itwould take another 18 years toprovide telecommunication access toall of Fijis 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 2500 inhabitants,lies some 465 kilometres to the north of Fijis 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. GivenRotumas 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

RotumaNaitasiri

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


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forecasts which predicted only around1000 new subscribers a year. At theend of 1998, there were only some

8000 subscribers. This changed withthe introduction of pre-paid in 1999.Subscriber growth was almost 200 percent in 1999, the highest in Fijismobile history. Growth has sinceslowed reaching its lowest level everof 16 per cent in 2002.

There were 93583 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 some200000 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 in

extending the mobile network is landownership. Vodafone often has to paya lot of money to land owners for theinstallat 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. Fijis 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 talk

time). 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-paid

Post-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


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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 40000 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 3600 PCs sold per year.Assuming replacement every fiveyears that would equal around

18000 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$ 1000 per PC, there would be anestimated 24000 PCs in the country(assuming a five year replacementrate). The rounded average of thevarious estimates suggests a figure ofaround 30000 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 estimated15000 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 some23000 Internet users in 2002 or2.8 per cent of the populat ion.However the ISPConnectnowestimates that there are 50000 usersin Fiji raising penetration to some

6.1 per cent.9

Connect multiplied the8000 subscribersmost of which arehome accountsby three and addedto that est imates 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 Incomeand Expenditure Survey 2003 alsoasks households if they have Internetservice but the results were not

available at the time of this report.

Connects estimate of 50000 Internetusers in Fiji correlates to a number ofother indicators. For example, the

estimated newspaper circulation in thecountry is 49000, the number ofsalaried workers is 42393, thenumber of people aged 20 and abovewho have tertiary education is 43580and those in secondary schoolbetween the ages of 15-19 is 43391.This suggests that Fijis 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 400000. Thisgives some indication of Fijis 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 an

entry level PC is around F$ 1000(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 subscript ionpackages. 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 Pacific

nations. 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 some

libraries have access. There are around


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50 privately operated Internet cafes inFiji, with most outside Suva primarilycatering to tourists. Connect operates

two in Nadi and Suva. FINTEL operatesan Internet kiosk at its building in Suvacharging 10 Fiji cents per minute. FijiPosts operates an Internet caf 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 official

statistics 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 550000 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 TVs 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 was49124 in 2001 or six per cent of thepopulation.13

3. Pervasiveness


18/5614


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 1650 was provided byTelecom Fiji however their 1995 Annual Report mentions a figure of 1066. The 1996 Census reported1346 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$ 20000 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].8http://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, 96756 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].


19/5615

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 Fijis 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. InformationTechnology 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. ITC

provides 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 3000 (outof a total of 17000) civil servants. Itsobjective is to connect up to 10000

government 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 that

GOVNET faces is the high leased linecost it has to pay to Fiji Telecom, atotal of F$ 9000 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 Public ServiceCommission, in charge of humanresources, which has its own ICT

team. 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$ 12000(US$ 5479) that ITC received for

training 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 most

ministries connected to GOVNET, the



20/5616


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

educationOnly 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, 210743 students representing over 25 per cent of Fijistotal 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 all

67830 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 alignedto technology developments and future

skill demands such as Information

Technology and computer educationneeds 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.6The Planseducational 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 that

many 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: Net Teacher ratio enrolement

ratio (%)

Total 1462 210743 9564 22:1

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

Primary 700 142913 5112 28:1 98.2 (1996)

Secondary including vocational 199 67830 3894 17:1 80 (1996)


21/5617

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

for 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 of

higher education in the Pacific region,the University of the South Pacific(USP, www.usp.ac.fj).7 Apart from abranch of Australias CentralQueensland University(www.suva.cqu.edu.au), USP is theonly university in Fiji. The number ofUSP students has increased steadily,from 5228 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 1500 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 with4772 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 ministrysheadquarters has a two Mbps leased

line connection to ITC. Like otherministries, it complains about the slowspeed. The MoH estimates that it has

about 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 Fijis 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 and

connected 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 Fiji

government. The Fiji 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



22/5618


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 make

use of the distance education program.

Especially over the last few years enrolment at USP hasincreased substantially, from 10452 students in 2002 toover 18000 in 2004. Students can chose among some

160 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 leased

lines 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 its

12 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 programme

available 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 and

the 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 theuniversitys curriculum and increase educational quality,the high costs of Internet bandwidth has restricted

progress 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 universitysability to fully take advantage of the Internet. USPsmanagement is looking into possibilities of expanding

the 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 Fi ji 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).


23/5619

through the use of dial-up Internetaccess. The Fijian experience showsthat basic Internet services accessible

to those with narrow bandwidthconnectionsemail, web pages and theattachment of still imagesare 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 ITCs 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 at

http://www.ahi.com.au/projects/1014161718_22071.html. [Accessed 18 June 2004].


most commonly used telemedicine /telehealth type applications. Moresophisticated applications such as live

videoconferencing for remote diagnosis,would involve a higher degree oftechnical expertise and bandwidth.


24/5620


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

FINTELs investment to connect to theundersea cable was F$45 million.

All of Fijis 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.Fijis 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 or

must 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 appears

to be a lack of transparency inbandwidth pricing with different ratesbeing charged depending on thecustomer.

Despite the increase in Internetbandwidth made available 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, Fijis international Internet


25/5621

Figure 5.2: International Internet bandwidth capacity and pricing

International Internet bandwidth, selected Pacific economies, bits per capita, 2002 and International

Internet 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 Pacific region average(Figure 5.2, right).

In addition to the ISP, there are other

potential customers for bandwidthsuch as call centres. Another potentialuser could be Fijis 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 idea

is 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 Fijis domestic backbonecovers most of the major islands andis primarily microwave. Around one

quarter 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. There

are 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 to2800 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 domestic

backbone include frame relay using

5. Connectivity


26/5622


Cisco routers. The theoreticalbandwidth is 155 Mbps but actualspeeds are much slower. It is used

mainly for leased lines. Internet trafficis routed over Telecom Fijis 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 7600 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 7000 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 to

encourage 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) norGeneral Packet Radio Services(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 withAustral 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 also

going up in use with the number ofShort Message Service (SMS)doubling to 6.1 million 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 most

Fijians 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.


27/5623

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 Fijis 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


28/5624


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 was

no 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 FINTELthe internationaloperatorin ATH but its other owner,

Cable and Wireless of the UK objected.However the governmentsmanagement 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 countrys pensionsystemwho bid F$254 (US$ 130)million for 49 per cent of ATH. FNPFpaid an extra F$23 million premium

for 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%


29/5625

that it exercised in September 1999.In March 2002, additional governmentshares were offered to the public and

institutional investors and ATH waslisted on Suvas 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 InformationTechnology 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 nations 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 thenations largest operator in terms ofrevenue and staff.

Telecom Fiji traces its roots back to 1910

when the government took over thetelephone network owned by ColonialSugar Refinery Company (whichintroduced Fijis first telephone systemin 1895). In 1990, Fiji Post andTelecommunications Limited (FPTL) wascreated to take over the governmentstelecommunication 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 in

March 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 the

latter receiving 53 per cent forterminating international calls. Thesepayments in effect subsidize localtelephone charges. Despite theworldwide trend towards reducedinternational calling prices, Fijisinternational 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 current

revenue sharing system.2

It is also infavour of rate rebalancing since volumewill go up.

Fijis 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 ironically

profits rose 15 per cent). A local call

6. Market


30/5626


back company, TELPAC, is charging upto less than 44 per cent less than FINTELand reportedly has captured 15 per cent

of the market.3

The impact of call back traffic (whichshows up as incoming traffic) coupledwith high domestic international callingprices is reflected in Fijis 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 Fijis 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 a

major 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 Fijiis the nations mobileoperator.4 The company is 49 per

cent 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 license butc laims exclus ivity 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


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other Pacific operations in Australiaand New Zealand. There is alsooperational collaboration with for

example, Vodafone Fijis post-paidbil 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 Fijis wireless local loopcustomers.

Half of the population is within range

of 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 transmission

network but must use Telecom Fiji.Vodafone Fiji is also not allowed todeal direct ly with FINTEL forinternational service but must gothrough Telecom Fiji.

Fijis 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 Fijis 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 ILD20%

Local

7%

NLD

18%

Data &

Internet14%

Mobile

41%

Fixed

telephone

45%

Telecom revenue by market segment, 2003

Total = F$ 133 (US$ 61) million

6. Market


32/5628


around 35 staff. The government hasissued eight ISP licenses but nonehave been activated due to a lack ofinterconnect arrangement withTelecom Fij i. Connect has an

interconnect arrangement for usingTelecom Fijis 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 it

must 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 Fijis 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 1361 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) and

distribution of FJ domain registrations, June 2003 (right)

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

Internet hosts

5 5

52 7592

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


33/5629

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 Rows 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 Telecom

Fijis 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


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7. Information society

7.1 Economic impact

The contribution of the communicationsector to Fijis 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 relatively

low 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 Fijissingle largest enterprise in terms ofrevenues. ATH pays a minimum of

50 per cent of net profit in dividendsensuring its major shareholder, the FijiNational Provident Fund (FNPF) asteady source of income for financingthe nations 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 such

as radio and television is high. Over90 per cent of households areestimated to have a radio and overhalf the population have access to


35/5631

television. Five years ago the Internetwas just getting started in Fiji; at theend of 2002 an estimated 6.1 per cent

of the population were users. Fijisinhabitants 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 pla

itu paper on the internet

Documents