Islands Business - Telecommunications: THE TELECOM DILEMMA

Dionisia Tabureguci

PITA managers prepare for the 11th annual general meeting - PITA president, Maui Sanford; PITA manager, Fred Christopher; and PITA vice-president, Ivan Fong.

With a plain white cotton tee shirt, a pair of off-white shorts and obviously flustered by the hot Suva weather, Maui Sanford hesitated a little when the topic about Internet came up.

As president of the Pacific Islands Telecommunications Association (PITA) and International Relations manager at OPT (Office des Postes et Telecommunications) French Polynesia, Sanford knows only too well the implications of Internet and has an inkling about where the questions are heading to: a discussion about how Internet is changing telecommunication companies in the region, all of whom are members of PITA.

Just in from French Polynesia to help consolidate the final details of PITA’s 11th annual general meeting - scheduled for French Polynesia later this month, Sanford had been eager to hold an interview with Islands Business on the disaster management initiative that PITA is undertaking with the Pacific Islands Applied Geoscience Commission.

Having to talk about the changes brought about by Internet Protocol (IP) was not exactly what he had in mind. But it has become increasingly known that beneath the well-established solidarity among telecom operators in the region via PITA, an issue that has taken centre stage and which had been approached with a mix of apprehension and caution, is the need now for network owners to upgrade to Next Generation Network (NGN).

It might involve putting in ‘just a few switches in the network in order to interface with an IP system’, as one telecom engineer described it, but no doubt upgrading spells important changes for telecom companies in the region.

A salient feature of an IP network is its ability to carry voice, video and data as packets, saving network owners the space they would have dedicated to each medium.

“All networks are moving towards the use of Internet Protocol and to Internet-based services so therefore, there is a very strong and urgent need to move to NGN and also to move people (telecom personnel) to have appropriate IP skills in each of the countries,” says Sanford.

“Whatever is the size of the telecom company, we have to face this aspect of change which is, in fact, very complex.”

Telecom operators in the region are reluctant players in this change and have, more or less, been pressured by external forces into having to make the much talked about upgrade.

Where the developed world has become IP-based, legacy companies in the region find themselves also having to migrate to IP-based networks or risk running infrastructures that are obsolete and which are not supported anymore.

Where telecom companies in the region recognise the need to move into the provision of fast speed Internet for their customers, the move also comes with the risk that revenue from their core telephony business will slump as users learn to make cheaper telephone calls through the Internet.

A host of other such pressure points now exist for telecom companies and which has been made more complex by the fact that for most of these companies, the only way to connect to the outside world is through satellite, an expensive exercise that becomes more costly as the bandwidth need increases.

As PITA explores ways to help its members mitigate this cost, what it and its members have come to accept is a business reality that has increasingly become IP-based, with Internet catapulting them into a future that sees many of them transformed.

“One of the issues about moving to NGN is developing the right business model,” said Fred Christopher, manager at PITA’s Suva-based headquarters.

“I think the business model that we will see with telecoms in the region is that they will begin to move towards user-centric businesses rather than just selling bandwidth.

“So you are likely to see telecom operators developing partnerships with application solution providers as traditional services are merging on the same platform.

“Therefore, we will probably see some companies developing partnerships with radio broadcasters or television stations and packaging these products to offer to their customers. Some countries in the region are already doing that.”

Sanford and Christopher believe what must be quickly and urgently be addressed is the region’s industry legislations.

“We expect new players to come to the region because telecommunications is a lucrative business.

“But what is important is to have some sort of fair playing fields where each one can participate and in return, help in the overall development of each economy,” Christopher said.