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2012 Pacific Island mobile market update

…there are instances where a postpaid plan would provide better value for money than the prepaid plans…

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This year we are able to include Bemobile in the Solomon Islands in our analysis of Pacific mobile prices. Bemobile commenced operations in the Solomon Islands in August 2010, however, details of tariffs have only recently become available. As in past analyses we have compared mobile tariffs in the countries by calculating the average monthly spend for customers with low-volume, typical prepaid and SMS-based usage, as well as measuring the affordability of those services. Monthly spends are given in US dollars, converted using purchasing power parity rates.

We have also added an analysis of prepaid plans including three additional countries – French Polynesia, New Caledonia and Norfolk Island, all of which have monopoly mobile operators.

The most expensive operators for low volume users (who make 30 calls and send 100 text messages per month) are NTA Marshall Islands and PMC in Palau, whereas the two Tongan operators are the least expensive for low volume users (Exhibit 1). In most cases there has been no change in the monthly spend from 2011 to 2012, with a few exceptions. Telecom Cook Islands and both operators in Papua New Guinea have had a reduction in monthly spend, whereas Digicel in Fiji and Vanuatu, and FSMTC in the Federated States of Micronesia have had increases. Bemobile in the Solomon Islands has a mid range monthly spend, which is however higher than Solomon Telekom.

Exhibit 1: Monthly spend on mobile services for a low volume user (USD at purchasing power parity rates) [Source: Network Strategies]
Monthly spend for a low volume user. Source: Network Strategies

The typical prepaid user (someone on a prepaid plan who makes 40 calls and sends 60 text messages per month) is also best served by the two Tongan operators, while that user's monthly spend would be highest with the operators in Palau (Exhibit 2). As in the case of the low user there has been little change in the monthly spend from 2011 to 2012, with a few exceptions. Decreases in monthly spend were found for Telecom Cook Islands and both the operators in Papua New Guinea, whereas there were increases for FSMTC and Digicel in both Fiji and Vanuatu. Note that only prepaid plans were included in the analysis for this basket, however as we found last year there are several instances where a postpaid plan would provide better value for money than the prepaid plans, namely for Telecom Cook Islands, PNCC in Palau, Bemobile in the Solomon Islands and Digicel in Vanuatu.

Exhibit 2: Monthly spend on mobile services for a typical prepaid user (USD at purchasing power parity rates) [Source: Network Strategies]
Monthly spend for a typical prepaid mobile user. Source: Network Strategies.

For an SMS-based user (someone who makes 8 calls and sends 400 text messages per month), the best option is still with Telecom Cook Islands due to its bulk text message offering whereby only the first 50 text messages per month incur charges. The most expensive mobile bill for the SMS-based user is from Bemobile in Solomon Islands (Exhibit 3).The only changes from 2011 to 2012 for this usage basket were slight decreases in monthly spend for Telecom Cook Islands and Digicel in Papua New Guinea and Samoa, and increases for FSMTC, and Digicel in both Fiji and Vanuatu.

Exhibit 3: Monthly spend on mobile services for an SMS-based user (USD at purchasing power parity rates) [Source: Network Strategies]
Monthly spend on mobile services for an SMS-based user [Source: Network Strategies]

We have also undertaken a comparison of prepaid plans based on an expanded sample – including French Polynesia, New Caledonia and Norfolk Island, all of which have monopoly mobile operators (Exhibit 4). Note that unlike the above analyses, market exchange rates were used for currency conversion, as purchasing power parity rates are not available for these additional countries. Amongst our sample of Pacific operators, Vini in French Polynesia offers the typical prepaid user a mid-range monthly spend, whereas Norfolk Telecom comes in as the fourth most expensive and OPT in New Caledonia as the most expensive for our user.

Exhibit 4: Monthly spend on mobile services for a typical prepaid user – including French Polynesia, New Caledonia and Norfolk Island (USD) [Source: Network Strategies]
Monthly spend on mobile services for a typical prepaid user [Source: Network Strategies]

The affordability of mobile phone services has been calculated as the percentage of average monthly income (GDP per capita) taken up by the monthly spends. For each of the levels of use French Polynesia, New Caledonia and Norfolk Island have the most affordable mobile services, with the monthly spend taking less than 2.5% of average monthly income in each case (Exhibit 5). With high average income, users in these countries are more able to afford the relatively expensive mobile services. At the other end of the spectrum Papua New Guinea still has the least affordable mobile services, however there has been a distinct improvement from the 2011 results (where low-volume and prepaid use required more than 21% of average monthly income and SMS-based use over 35%). Affordability in Nauru improved due to an increase in GDP per capita.

Exhibit 5: Monthly spend on mobile usage as a proportion of average monthly income for low volume, prepaid and SMS-based usage baskets [Source: Network Strategies]

Country Low volume
use
Prepaid
use
SMS-based
use
Cook Islands 2.8% 5.7% 1.7%
Federated States of Micronesia 6.8% 7.8% 11.9%
Fiji 6.1% 7.0% 10.9%
French Polynesia 0.9% 1.3% 1.7%
Kiribati 14.4% 18.4% 17.2%
Nauru 4.3% 4.8% 8.5%
New Caledonia 1.3% 2.3% 2.1%
Norfolk Island 0.8% 1.0% 1.3%
Palau 3.7% 5.3% 4.3%
Papua New Guinea 17.5% 17.6% 30.8%
Republic of the Marshall Islands 10.8% 10.9% 13.1%
Samoa 6.1% 6.3% 7.4%
Solomon Islands 14.7% 17.1% 26.0%
Tonga 3.6% 3.7% 7.9%
Vanuatu 9.4% 10.4% 18.7%

Over the past year there has been expansion of coverage by Telecom Cook Islands, Vodafone Fiji, Digicel Papua New Guinea and Telecom Vanuatu. Current mobile network coverage in the Pacific Islands is as follows:

  • Cook Islands: coverage is provided to Rarotonga, Aitutaki, Mangaia, Manihiki, Pukapuka, Mauke and Atiu islands, with coverage expected to extend to Mitiaro in May 2012.
  • Federated States of Micronesia: coverage is provided to town areas of Kosrae, Pohnpei, Yap and Chuuk islands. Note: higher charges apply for calls between states.
  • Fiji: both Vodafone and Digicel provide coverage to the coastal areas of the two main islands (Viti Levu and Vanua Levu), as well as most of the inner islands, the Yasawas, Lekeba, Gau, Vanuabalavu and Kadavu Island.
  • French Polynesia: Vini provides coverage on most islands, covering approximately 98% of the population.
  • Kiribati: coverage is provided to South Tarawa, Kiritimati Island and some parts of North Tarawa.
  • Nauru: Digicel provides coverage to the entire island.
  • New Caledonia: coverage details are not given on OPT’s website.
  • Norfolk Island: Norfolk Telecom provides coverage to the entire island.
  • Palau: Palau Mobile provides coverage to the main populated areas of Babeldoab Island and the state of Koror. PNCC provides coverage throughout Palau.
  • Papua New Guinea: Bemobile provides coverage to Wewak, Madang, Mt Hagen, Goroka, Lae and Port Moresby. Digicel currently provides coverage to Port Moresby and the provinces of Central, Morobe, Madang, Chimbu, Eastern Highlands, Western Highlands, Southern Highlands, Milne Bay, East New Britain, West New Britain, New Ireland, Manus, Western and the autonomous region of Bougainville.
  • Republic of the Marshall Islands: coverage is provided to Majuro, Ebeye, Jaluit, Kili, Rongelap and Wotje.
  • Samoa: Digicel provides service to the coastal regions of the two main islands (Savai’i and ’Upolu), covering at least 80% of the population. Bluesky (formerly Samoatel) does not give details of its coverage on its website.
  • Solomon Islands: Solomon Telekom provides coverage to several regions in the Western, Choiseul, Malaita, Isabel, Central, Makira, Renbel and Guadalcanal Provinces. Bemobile does not give coverage details on its website
  • Tonga: both Digicel and TCC provide coverage to Tongatapu, and areas of the island groups of ’Eua, Vava’u and Ha’apai. Note: higher charges apply for calls to outer islands.
  • Vanuatu: Telecom Vanuatu provides coverage to areas in Santo, Ambae, Maewo, Malekula and Efate islands, plus Banks, Mota Lava, Port Olry, Big Bay, Thion, Gaua, Paama, Epi, Pentecost, Ambrym, West Erromango and East and West Tanna including Aneityum, covering 75% of the country's population. Digicel provides coverage to areas in Santo, Malekula, Ambae, Maewo, Pentecost, Ambrym, Epi, Efate, Erromango and Tanna.

Notes for analysis of monthly spend:

  • Prices include GST (at the rate relevant to that country) and are in US dollars.
  • Prices for the 2011-2012 comparisons were converted to US dollars using 2010 Purchasing Power Parity (PPP) rates sourced from the World Bank.
  • Prices for the sample including French Polynesia, New Caledonia and Norfolk Island were converted to US dollars using the average market exchange rate for 2011, sourced from Oanda
  • All plans were current as at 31 March 2012.
  • The prices for each operator represent the plan resulting in the lowest monthly spend.
  • OECD mobile baskets of usage were sourced from the report: Revision of the methodology for constructing telecommunications price baskets, 18 March 2010.
  • GDP per capita data were sourced from the World Bank for 2010.

April 2012


Copyright © 2012 Network Strategies Limited

 
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