[This week’s Communications column for the Vanuatu Independent.]

It won’t come as news to anybody if I say that family is strong in Vanuatu. We’ve known it all along. But with the upcoming release of a new report on telecommunications liberalisation, we will see its influence illustrated in vivid terms.

The Pacific Institute of Public Policy (PiPP) will soon be releasing a report measuring the social impacts of telecoms liberalisation in Vanuatu. One of the main findings is that, in the months following the extension of mobile telephone service to the majority of Vanuatu’s population, families benefited more than businesses in terms of changed perceptions and real outputs.

We’ve suspected this for a while. In June of this year, I presented a talk to regional telecommunications providers. Titled ‘Network Effects: Social Significance of Mobile Communications in Vanuatu‘, it explains Network Effects and how they manifest themselves in village life, then looks at some obvious and not-so-obvious implications for network providers in the Pacific.

Briefly, my point is that village life features very tight communication loops from which no one is exempt. The one-to-one aspects of village communications are enhanced by mobile communications, and smart network operators should do what they can to enhance this effect. The result is that our island geography (and gestalt) creates more value per user than traditional business analysis might lead us to believe.

I based this point on three things: anecdotal data gathered from the VIGNET technical mailing list, my own personal and professional experience and a survey conducted in 2004 by the People First Network (PFNET) in the Solomon Islands. The PFNET survey showed that about two thirds of the email traffic generated by their 20+ rural email stations was family-related.

It seemed reasonable to believe that this same phenomenon would make itself visible in Vanuatu with regards to mobile telephone use. PFNET’s email stations are located in some of the most remote areas of the Solomons, and in most cases represent the only affordable communication media in their respective areas.

The PiPP report validates this. It goes further, though, and shows that mobile telephony has even exceeded public telephone usage in places where it’s available. One interesting datum is that people spend more on mobile telephones now than they used to on public telephones.

One of the questions that came up regularly when I asked for feedback on my talk was how people would be able to afford mobile services. Given that 5000 vatu (about USD 50) per month is not an unusual family income in the village, even topping up with 200 vatu credit (currently the smallest increment available) would be a burden, would it not? The answer is yes and no.

There’s an interesting relationship between commodity prices and agricultural production here in Vanuatu. When the price of commodities like coffee, copra and cacao rises, production actually decreases rather than increasing. The reason for this is that the need for cash in rural areas is quite limited. Once a villager earns enough to pay school fees, clothing and a few staples, there’s no more need to sell their crop. So when they can earn the same amount of money for less effort, they do so.

This is one of the factors leading to a kind of economic insulation for the average ni-Vanuatu. The bottom line is that the cash economy remains small in rural Vanuatu because the cash economy is only a small part of the whole picture.

When mobile communications are introduced, the perceived need for cash increases. In the short term, this puts stress on the pocket book, but things can probably work themselves out through a nominal increase in the amount of cash being generated (e.g. through cash crops). Add to this the increased efficiencies that come hand in hand with better communications, and we’ll likely see more prosperity and economic activity – in cash terms – than less.

In other words, this is not a zero sum game.

That detail is still lost in many traditional planning processes. In fact, ignorance of this dynamic is a bigger inhibitor to growth than many other external factors. If people can’t forecast capacity properly, their estimates come out consistently low, and because products and services don’t meet the need, they don’t have the effect they’re intended to, so people don’t invest in them.

The PiPP Telecoms report validates this important point, and illustrates in some detail the ways that family livelihoods benefit from improved communications:

“The research findings demonstrate that households in Vanuatu are ‘stretched’ between rural areas and urban areas and increasingly between rural areas and overseas. Migration is becoming an essential component of household livelihoods in rural areas. Telecommunication liberalisation and greater access to telecommunication services is playing a critical role in ‘managing distance’ between rural and urban households, and facilitating the redistribution of resources to rural households.”

It’s critical that this point be taken on board by planners and policy makers as we continue the process of liberalising the telecommunications market. Very often, private sector-driven initiatives like this tend to be driven by business-oriented approaches, and their success measured using finite metrics like increased GDP.

There’s no doubt that improved access to mobile telephone services has had a beneficial effect on the bottom line. We need look no further than PiPP’s finding that people are spending more on communications now than they did before. And it’s important as well to note that, while telephone services are beneficial to business in and of themselves, one of the reasons we didn’t see a bigger impact on business activity is because of the lack of complementary infrastructure, like roads, shipping and electricity.

So there’s an argument to be made that basic infrastructure needs to improve in order for the full benefits of mobile telephony to be realised by business. Some of that is already underway, with the MCA project building airstrips, roads and wharves across the nation.

Work has already begun on rural electrification, but the problem is a difficult one, and will take time to address in a comprehensive manner. The lack of electricity has curtailed mobile uptake in some rural areas. Respondents reported that they spent more money on charging their phones that they did actually making calls.

There’s a great deal more we can do to enhance the social value of communications in Vanuatu. Rather than wait for rural electrification to catch up, we could help people use their phones more efficiently. For example, PiPP notes that relatively few rural users know how to send a text message. This means that they’re spending more per communication, and using more battery life as well. An advertising and awareness campaign that took advantage of informal family and village networks could prove effective and beneficial.

PiPP’s report on the social effects of telecommunications liberalisation is an invaluable resource. It provides a useful snapshot of the effects of telecommunications in the first months following the service roll-out.

We can’t allow this report to be a one-off effort. By supplementing it with ongoing and/or periodic updates, we can develop a deep, nuanced understanding of this integral part of the nation’s development.