Century

The Communications Revolution

Into The 21 st Century

New technology is transforming the Pacific: once bedevilled by poor and unreliable communications, the region is being united by television, radio and satellite telecommunications links.

Media observer and communications expert Liz Fell profiles the organisations, the problems and the expanding market for telecommunications in a region so broad it encompasses a quarter of the globe.

PACIFIC NATIONS, for so long kept out in the cold by gaps in interna tional telecommunications links, are flexing their muscles as transnational corporations and statutory authorities court their business. Despite the estab lished expertise of Japanese, American and European suppliers, the region’s at tention is increasingly directed toward Australia, whose three publicly owned communications carriers are searching out new business opportunities as neighbour ing countries are moving to update and ex tend their telecommunications networks.

Telecom Australia has established close relationships with its domestic counter parts in PNG, Tonga, Fiji and New Zea land, while the Overseas Tele communications Commission (OTC) is focusing on a regional satellite network for the Forum countries.

Australia’s domestic satellite company, Aussat Pty Ltd, already provides com munications for NZ and is poised to com pete with OTC in the provision of international services for multinational corporations operating in countries cov ered by its regional “footprint”.

The catalyst for much of this activity is SPEC’s South Pacific Telecommunica tions Development Program, which has received an annual $A600,000 aid grant since 1983 from Australia and NZ, the “Big Brothers” of the region.

The focus of the program is the estab lishment of rural trunk links to outlying areas and isolated islands, where telecom munication services for health, education or humble personal telephone calls are virtually nonexistent.

The 1980 South Pacific Forum meeting agreed that telecommunications, particu larly satellite communications, was a high priority for breaking down the social and economic divisions between urban elites and the rural poor, and for encouraging in

vestment and development in the region.

The original idea behind the SPEC program was to adopt a regional approach so all nations could benefit from co-ordinated planning, equipment standardisation, shared satellite usage and bulk purchasing. Such a regional approach may appear to be efficient and rational but it has sometimes failed to recognise the independent and competitive spirit within the region or its diversity of cultural and political perspectives.

Each nation is actively pursuing its own priorities and timetables for telecom development, a fact that was highlighted when some participants complained about SPEC’s unsuccessful attempt to secure World Bank program funding last year, SPEC director Henry Naisali admitted he was shocked at the “almost entirely negative response” to his inquiry about support for World Bank funds when delegates attended the program meeting in Tonga last November.

The World Bank has agreed to examine the funding needs of the two largest countries Fiji and Papua New Guinea which are now busy drawing up master plans to meet its criteria for securing loans, As a first step, the Bank gave $A650,000 to PNG for a management and network consultancy. Telecom Australia International Ltd (TAI) tendered for the contract, but missed out after making it to the short list of seven. TAI has since secured another contract to develop a PNG policy on private automatic telephone exchanges (PABX), and is now considering opportunities related to the installation of a new fibre optic cable system.

TAPs business development manager, Laurie West, says breaking into international markets is “a tough, competitive business” and there are dangers associated with moving offshore “too hard and too fast”.

West, who has developed close work ing links with telecom executives and en gineers in NZ, Tonga, Vanuatu and Fiji through training and consultancy serv ices, cites the case of Tonga’s Telecom munications Commission, which has signed an “agency agreement” with TAI allowing it to tap into Telecom Australia’s resources on a commercial basis.

This agreement meant that when Tonga gave Ericsson Australia the contract to supply small digital (AXE) telephone ex changes for rural communications in the Ha’apai and Vava’u island groups, TAI was asked to provide the specialist training, Ericsson has another contract to supply Australian-made rural exchanges for Fiji’s telecom authority, with which TAI has a long-term co-operation arrangement, TAI has completed a tariff study for Fiji that, says West, is now being implemented as part of Fiji’s plan to restructure its do mestic telephone business. The Fiji ad ministration has announced plans to privatise this business within 12 months; plans that were on the Alliance govern menfs agenda just before it was thrown out of office in the 1987 elections. The priva tisation scheme involves forming a lim ited liability company with initial capital that will, it is hoped, be supplied by the World Bank. The Government will main tain a major share, with a minority hold ing going to private shareholders.

Fintel Ltd, the company licensed to op erate Fiji’s international services, is already privatised with a 49 per cent share in the hands of the British giant, Cable & Wireless.

Cable & Wireless (originally Imperial and International Communications Ltd) has a long association with the region, going back tc the days when the island na tions were British colonies. Aside from Fiji, Cable & Wireless owns shares in the in temational franchise for the Solomon Is-^

◄ lands (51 per cent), Tonga (100 per cent), the Cook Islands (100 per cent) and Van uatu (33 per cent).

Throughout the region a number of governments have begun to review their organisational arrangements with carriers such as Cable & Wireless and to explore other potential partners.

OTC has moved ouickly to take advan tage of this opportunity, which would al low it to expand its international business and assist development at the same time.

An OTC team guided by Rod Masterton, regional manager for the Pacific and Asia, conducted the right research and let it be known it was interested in managing or operating networks on a joint venture basis with other South Pacific governments. The tiny Republic of Kiribati made the first approach, and on April 1 this year OTC International Ltd (OTCI) commenced a contract to manage Kiribati’s national and international network on a commercial basis (see Page 49).

Another opportunity arose in the Sol omon Islands, where the Government de cided to merge its national and international operations and to examine joint venture proposals from carriers other than Cable & Wireless. Early last year, British Telecom appeared to have ousted its UK competitor, securing the Solomon Islands tender. However, negotiations with BT broke down and the Government re opened the tender. OTC was invited to make a bid along with NEC Japan, British Telecom and Cable & Wireless.

The atmosphere soon resembled an overheated auction, with Solomons poli ticians playing games with the incumbeht C & W until they finally negotiated ac ceptable terms. In April they announced they had signed a new Memorandum of Understanding with Cable & Wireless.

As another element in OTCI’s strategy, it has offered to assist SPEC program members with the design, implementa tion and operation of their satellite links to outlying islands and rural areas.

Access to satellite capacity was the highest priority in 1979, when Australia rejected a request from Forum countries to provide Southwest Pacific capacity on the planned Aussat satellites. Nearly 10 years later and following an apparently endless stream of requests for help from the US, Japan, Europe and the international consortium Intelsat, the program mem bers finally opted to use Intelsat’s satellite system which they already use for in ternational calls.

The major “unknown” on the horizon is Pacstar, a joint satellite venture involv ing the PNG Government and TRT Com munications in the United States. TRT is owned by United Nuclear Corporation, which produces fuel and reactor cores for the US Navy, services US military air craft and operates nuclear facilities for the US Department of Energy.

Although TRT appears to be an odd partner, it has offered PNG a deal that in

eludes free access to satellite capacity for PNG’s domestic communications in the early 19905: the Pacstar system is also de signed to provide communications for other small Pacific island countries in a much more cost-effective way than Intel sat or Aussat. At this stage Pacstar is still a “paper plan”, but if it eventuates it could be in direct competition with both Aussat and Intelsat.

OTC, Australia’s Intelsat member, sug gested to a SPEC meeting that cost savings could be gained if all countries “pooled” their domestic and international Intelsat circuits, and OTCI has designed a net work model with a demand assignment multiple access (DAMA) switch which, rather than making each country pay for unused Intelsat capacity during off-peak hours, allocates a circuit only when it is needed for a call.

The most controversial aspect of OT CI’s model is the fact that the DAMA switch or “hub” would be based in Syd ney. This raises sensitive issues of na tional sovereignty and control, as Masterton readily acknowledges, and un less some arrangement is devised that al lows each nation to exercise control over its own national and international cir cuits, the Sydney hub may prove a stum bling block to acceptance of the OTCI proposal. Masterton says that countries investigating the proposal agreed it suited their requirements when they visited OTC’s Sydney facilities in early April.

At the same time Aussat, Australia’s third carrier, is anxious to secure a share of the lucrative international market and by doing so poses a direct threat to OTC’s present monopoly. In 1985, Aussat re versed an earlier Australian decision and spent a little more than $1 million modi fying its third satellite to beam across the Southwest Pacific. Both new Aussat sat ellites could provide powerful interna tional services in the Pacific region.

The Australian Government prohibits Aussat providing international services, but all this is expected to change when it announces the results of a current review of telecommunications policy. The NZ Government has also announced major policy changes that will allow other com panies to compete with Telecom NZ in both national and international services.

In the face of this potential competi tion, OTC is racing to create more tele communications capacity and to tie up private network customers by the early 19905. One element in its strategy is a high speed, high-capacity submarine optical fibre cable system between Australia and New Zealand that will be in place in 1991.

The next stage is to extend the cable so it joins with other systems to North Amer ica and Asia by the mid 19905. Pac- Rim East, as it is called, will link NZ to Hawaii and PacßimWest will connect Sydney to Guam. Along the way, other Pa cific nations will be able to benefit from enhanced communications links. □