Dionisia Tabureguci


The proposed pan-Pacific fibre optic cable network SPIN (South Pacific Information Network) should be up and running by the second half of next year, if all goes according to plan.
The project’s developers SPIN SA told ISLANDS BUSINESS that a lot of effort has been put into promoting this initiative both in the Pacific and abroad and the company was now close to naming the successful bidder to build the cable network.  
“Between November 2007 and February 2008, SPIN SA travelled to all countries involved in the project (in the Pacific),” said Ludovic Hutier, sales director of the New Caledonia-based entity.
“We met with each government and telecom operator to discuss the technical parameters (system architecture, country specific configuration, etc) and the legal conditions of our partnership, including capacity contract.  
“Since February 2008, we have travelled in the Pacific region and also in France, Australia and New Zealand to further discuss with our partners and secure the financing of the project.  
“In October 2008 in Noumea, SPIN SA signed a partnership agreement with the President of New Caledonia, Harold Martin and the President of French Polynesia, Gaston Tong Sang.
"This agreement officialises the full support of the two French territories to the SPIN project and their intention to become shareholders of the company SPIN SA.
"At the same time, SPIN SA launched an international open tender in June 2008 for the supply and delivery of the SPIN submarine cable system. Three international suppliers replied positively and submitted a comprehensive proposal.
"In November 2008, SPIN SA organised the tender clarifications and met with the three vendors in Paris. T
"The agenda is to negotiate and sign the supplier contract in the first quarter on 2009, with the tentative implementation of the system in the second semester of 2010,” said Hutier.
In a region where international connectivity is mainly enabled via satellite, Pacific islands governments are increasingly engaging in exploring the option of getting on a submarine Internet cable, considered to be more cost-effective to support in the long-term.   
Some of the bigger countries like Papua New Guinea, New Caledonia and Samoa are already at advanced stages of exploring the cable option, while the scattered smaller nations may be at the mercy of an aggregation project like SPIN to increase their list of options in terms of fulfilling their international communication needs.
This was partly the driving force behind the overwhelming support from Pacific islands leaders of the SPIN project at their Forum Leaders Meeting in Tonga in 2007, where they officially endorsed the project.
The SPIN concept was initially introduced to the Pacific in a workshop in Noumea co-organised by SPIN SA and the Secretariat of the Pacific Community (SPC) during a gathering of eight countries: American Samoa, French Polynesia, New Caledonia, Samoa, Solomon Islands, Wallis & Futuna, Tonga and Vanuatu.  
Cook Islands, Niue, Papua New Guinea and Fiji also joined the group and subsequently signed an MOU with SPIN SA, although by mid-last year, media reports emerged from Cook Islands saying government officials there had questioned the “vague” terms and conditions of the SPIN contract.  
Hutier rubbished the claims saying: “The SPIN project is a technological revolution for the Pacific islands countries.
“The SPIN submarine cable will end the monopoly of satellite service providers, who have dictated the price of international communications in the region. The Pacific islands countries deserve better and they now have an alternative solution. It seems it is not the interest of everyone to see the SPIN project succeed,” he said.
“In terms of the contract, I would like to mention that the contract was drafted by Kensington Swan, which is one of the top law firms in New Zealand.  The contract was based on standard business practices with a clear business model.  The country representatives involved in the contract discussions know that SPIN SA did modify the initial terms and conditions to match their requirements.”
Hutier’s assurance is supported by the recent World Bank-funded independent study on connectivity in the Pacific islands, a report that for the first time provides a range of international cable connectivity scenarios for Pacific countries as well as the costs associated with these options.
The draft report of this World Bank-funded study noted that in such a scenario as a regional cable network, the price offered by SPIN (US$1.5 million per year over 25 years for an STM-1 capacity) looked competitive. However, countries were also advised to thoroughly study the contract proposition.  
Hutier shed further light on SPIN’s commercial offer. “SPIN SA will buy, operate and maintain the submarine cable; provide a minimum capacity of 155 Mbts (1 STM-1) to the country and transport the country traffic from/to the regional hubs of Sydney and Hawaii.  These countries will buy, operate and maintain the landing station to welcome the SPIN cable to the country and pay an annual fee to SPIN for transporting the (Internet) traffic.”
The initial cost of the SPIN project is estimated at US$150 million (investment only) but the final cost will be determined after the tender evaluation.
“On top of the investment, you need to take into account the cost of marine maintenance (boat at disposal to repair the submarine cable in case of failure) and the transit cost to route the countries’ traffic from SPIN end points (Noumea and Tahiti) to the regional hubs of Sydney and Hawaii,” Hutier said.
He added the financing of the SPIN project is based on capacity agreements signed with the Pacific countries, shareholders’ own funds and financial help from France.
SPIN SA shareholders include a pool of private investors, including the API Group and the three French territories of New Caledonia, Wallis and Futuna and French Polynesia.