On Tuesday this week, Parliament agreed to put an end to the telecommunications monopoly in Vanuatu. This news has been greeted with widespread enthusiasm. People throughout Vanuatu believe that this means the days of over-priced, low-quality telephone and Internet services are finally over. But is this really the case?
The answer is mostly yes, with a few important qualifications. It’s almost certain that costs will decrease, service coverage will increase and quality will improve. It’s also quite likely that new kinds of services will be rolled out as well. But many of the environmental factors that constrained telecommunications in the past still remain.
With competition guaranteed. The major telecoms companies are in a beauty contest now. Customers in Vanuatu will shortly find themselves being wooed by players old and new, offering all kinds of exciting services, prices and promotions.
Let’s look into our crystal ball and try to see what things will be like over the next year or so.
MOBILE PHONE COVERAGE
We have evidence that mobile phone coverage is going to increase significantly very soon. TVL has already rolled out service in Ambae and North Efate, and expects to inaugurate service on Tanna early in the new year.
Digicel is one newcomer that has been quite busy preparing itself for this day. There are mobile phone towers under construction already throughout the country, many of them in places that have never seen mobile phone services before.
Between the two carriers, it seems that the government commitment to provide mobile coverage over 75% of the country is not entirely unreasonable. The new competition agreement that Parliament ratified includes a fund of not less than 450 million vatu to help ensure that this comes to pass.
Prices will almost certainly drop across the board. TVL has been smart in this regard, and has tried of late to make its prices competitive, in order to force Digicel and any other players to compete on other ground. Current SMS prices are on par with Australia, North America and Western Europe, and flat-rate calling nation-wide will make dialing our family back in the village much easier to bear, when we finally get service there.
It’s likely that mobile calling prices will come down some more, if only in the short term. But we’ll almost certainly find that the cost of setting up a new account will drop as close to zero as the new competitors dare. They want to make it as easy as possible for new customers to join the service, or even better, for existing customers to switch.
Watch especially for flat-rate and bulk plans that offer blocks of calls or SMS messages for a single, highly discounted fee. Sign-up bonuses will likely be very generous in the early days.
New services are another way for our suitors to distinguish themselves. Carriers will go out of their way to make using their mobile service as easy as possible. We will likely be able to transfer phone credit between accounts (but not between companies, of course). We should also be able to buy new credit using a bank card or some other means of online payment.
This would create important opportunities to expand access to mobile services, because it means that a bread-winner in Port Vila or even overseas would be able to buy credit for family members or friends without money or access to banking services. It’s also likely that mobile providers will allow their customers to buy very small amounts of credit, for example 100 vatu at a time.
Other possibilities include Internet-to-SMS gateway services – send someone an email or an instant message to their mobile phone – multimedia SMS and more.
The big question though, is who will be first to roll out GPRS and/or other next-generation transmission methods. GPRS means that we could send Internet data via the same system as we use to talk on our mobiles. GPRS can be added to existing GS networks rather easily, because it uses almost exactly the same equipment. It’s not broadband service, so it won’t replace our existing home and business accounts, but it could help make email and casual web access much easier.
It’s not clear yet what will happen with International calling, but one would assume that with the opening of the telecommunications market, there would be no artificial limitations on any new license-holder. It seems only reasonable that once they have the right to set up their own international connections, they would be able to sell long distance calling services.
Given the importance of the expat and business demographic within this newly opened market, it makes sense that international calling would be an area that any new carrier would want to compete in aggressively.
There’s been no confirmation forthcoming that all telecommunications license-holders will be required to allow calls originating from one service to reach the other, but it is known that this has been discussed during the negotiation process. Digicel has faced problems recently in Trinidad and Tobago, where the local incumbent, owned by Cable and Wireless, started blocking calls originating from their mobile network. It put them in a difficult position, because it appeared to customers that Digicel’s system was not working, when in reality the opposite was true.
If such a thing were to happen here, things would only end badly for whoever caused the problem. And that’s why it’s not a likely scenario.
The status of telephone land lines will not change – at least not in the short term. The big question right now is what will happen with the existing infrastructure. Businesses still need copper lines to handle their PABX telephone systems, and many people prefer the reliability that land lines offer, especially at peak usage times and when there’s bad weather.
The cable infrastructure throughout Santo and Vila is still of tremendous value, and TVL will retain an effective monopoly on provision of land-line services, at least for the time being. Installing a new phone line is many times more expensive than creating a new mobile customer, but the phone line can offer things that mobile service can’t. It will be interesting indeed to see how they use this to their competitive advantage.
It’s tempting to see the breaking of the telecoms monopoly as manna from Heaven. While it’s true that virtually everyone expects to see great improvements in the years to come, we need to remember that the geography of Vanuatu hasn’t changed. We are still a nation of islands with good but irregular sea transport, and expensive air services. Servicing mobile equipment on our remote islands will still take time and cost money. There will still be villages with no service at all.
We have just as many land disputes as we had before this agreement was signed. It’s just as easy today as it was yesterday for someone to obstruct service to others if they feel the need to.
Most importantly, we will always have a limited number of service providers. What will happen when the honeymoon is over? What will happen if some day the providers realise that a cartel is almost as good as a monopoly? It doesn’t even have to be overt. Sometimes environmental pressures push all the local operators into line. Just take a look at banking services here in Vanuatu. One would never suggest that they actually sit down and plan it this way, but the service offerings of the two banks sometimes make them indistinguishable from one another.
When a young woman is being courted by two boys, she needs to take a careful look at what they have to offer. She needs to look beyond the flashy outward appearance and determine which one is going to be faithful, reliable and provide her life with enrichment without undue complications. Let’s take full advantage of this honeymoon period to get the best value we can, but let’s not forget that this is just the start of a long and – hopefully – healthy new relationship.