Norman Nicholls...Fiji’s access rates are 10 times lower than what they ought to be.

Over the last few weeks Fiji's sole telecom provider, Telecom Fiji, has been taking out advertisements in the local media comparing line rentals that consumers pay in Fiji with those in a number of countries—both developed and developing—across the world.

The chart shows coloured bar graphs stretching across the page for most countries while the bar representing Fiji is a tiny stub that is only a few millimetres long. This is a graphic depiction of Telecom Fiji's long-standing problem of the severely skewed balance between line rental rates and long distance tariffs.

For some time now the service provider has been trying to bring about tariff rebalancing tocorrect the current situation. Consider the following: Fiji's homeconsumers pay just F$2.84 a month while businesses pay F$4.50. This is10 to 15 times less than comparative line rental rates for mostcountries.

Besides, Telecom Fiji needs to increase line rentals(or access rates) if it is to bring down its long distance and international rates, whichare amongst the highest in the world and are the butt of ridicule and criticism by Fiji's consumers in the country's media.

Telecom Fiji's chief operating officer Norman Nicholls says,"The access rates are 10 times lower and the long distance and international rates 10 times higher than what they ought to be."

That about sums upthe skewed price structuring that is at the centre of Telecom Fiji's woes. Overseas and long distance calls heavily subsidize the exceedingly low line rentals. It's a classic case of robbing Petertopay Paul.

Nicholls says that the capital expenses for installing and maintaining lines is almost the same as in other countries, if not higher. The view that labour costs are cheaper in Fiji doesn't hold good because of lower labour efficiency in Fiji, he adds.

With a low fixed line telephone penetration of just 13 percent, the company services 100,000 odd lines. Thanks to low line rentals, an estimated 35,000 of these consumers are billed F$20 or lower every billing cycle despite being charged 12 cents per local call after a set number of free calls. This situation, therefore, pressurises the company to justify the exorbitant long distance and international ratesof 48 cents and F$2.40per minute respectively to bridge the revenue gap.

This has brought in a number of players and technologies to offer cheaper services—someof them through the back door. These include overseas-operated call back services, VOIP (Voice Over Internet Protocol or what is popularly knownas Internet telephony) and VPNs (Virtual Private Networks—data networks that are increasingly beingused by corporate clients). The run away popularity of mobile telephony is another factor that has affected fixed line phones in the country.

Cornered in this manner, Telecom Fiji is sensitive to any perceived intrusion on its turf, including Internet Service Providers (ISP) who might want to provide services using the telecom network. At 12 cents for an unlimited local call, the company clearly does not want freemarket-style service providers making big bucks providing connectivity and charging by the minute. There are eight ISP licences issued by government that would compete with Telecom Fiji'swholly owned subsidiary Connect, currently Fiji's sole ISP, if allowed to operate (see accompanying story on Fiji's new wireless Internetservice).

It is interesting to note that while consumers opposeany increases in the abnormally low fixed line rentals, most thinknothing of spending many times more on mobile calls and instantmessaging, points out Nicholls. "It seems to be one of those life style things," he says. At 130,000, the number of mobile telephones exceeds fixed line phones by 30 percent.

 Unlike most telecom companies in the developing world, Telecom Fiji does not have a universal service obligation thrust on it, but being the monopoly provider in the country, sets itself targets to take telecom services to the country's remote locations.

So, why can't Telecom Fiji just up line rentals and bed one with it?There seems to be confusion on who has control over pricing in Fiji."The ministry of communication thinks they control prices; the Pricesand Incomes Board thinks that the control is with them and now the Commerce Commission has told us that it has put a blanket control on all telecom prices," says Nicholls. The Commerce Commission's directive has put paid to Telecom Fiji's attempts to implement any of its tariff rebalancing plans.

 "We want tobring about a change in the consumers' price perception," says Nicholls.And that rationale is at the centre of thenew advertising campaign inthe Fiji media. The company hopes to explain to people graphically why they have to pay more for long distance and international calls and theneed to increase line rentals to bring about a better balance in itstariff structure.

The company's customer value management programme has been a success in improving services, says Nicholls. Based on carefully planned surveys, the programme has brought about greater customer satisfaction, he says.The present campaign is designed to address some of the misconceptions about pricing structure, says Nicholls.
The task ahead for Telecom Fiji seems as uphill as it has been all this while. It will be interesting to see if the campaign will generate enough public awareness to hasten any decision on tariff rebalancing from which ever agency it is that ultimately controls pricing in Fiji.