Telecommunications market indicators depict the behavior of the ICT industry. This data assists the Government, TRR, stakeholders, donors, licensees and consumers in trend comparisons and awareness. They also greatly assist TRR with its regulatory work and in ensuring fair competition and equitable distribution of market share.
TRR analyzes the telecom sector and its behaviour to enable us to effectively monitor this market. In 2013, TRR initiated two priority projects which were (i) development of telecommunications market indicators, and (ii) the creation of a market and statistics database. To ensure that information gathered from the licensees was relevant, TRR and licensees conducted a collaborative review of Annex 2 of Order 2 of 2012; in particular, the amount of statistical data required for collection of market statistics. Outcomes were positive for each party, resulting in the provision, to TRR, of required - but not unnecessary or just useful - data to enable forward directions of the ICT market overall, and the growing tendency towards internet and mobile communication products and services, to be obtained.
For purposes of reporting statistical data, TRR’s analytical focus is on:
• The trend in the number of subscribers for mobile retail services market.
• The trend in the number of subscribers for fixed retail services market.
• The trend in the number of subscribers for internet retail services market.
• Trends in the issue of Telecoms Licenses and the relevant Collection of Fees.
• Employment patterns relative to the ICT the sector and its GDP contributions.
• Infrastructure developments and installations.
Mobile retail services market A sharp upward trend in the early period of 2007-2009 for mobile services marked Digicel’s entry into the telecoms market following liberalization of the telecommunications market. In that period, Digicel competed with the incumbent operator, Telecom Vanuatu Ltd. With a wider coverage and mobile service availability over the nation, the price for mobile services, handsets and SIM cards drop significantly; driving more demand for mobile services and, significantly, increasing mobile subscriptions.
In 2010, subscriptions for mobile services peaked at over 160,000 following fast construction and installation of communication infrastructures and roll out of services throughout Vanuatu, from north to south especially in rural areas. High demand and lower prices for using the mobile services were a major contributing factor to this increase. The number of registered mobile subscribers, however, decreased in 2011 followed by a slight increase in 2012 and another drop again in 2013.A contributing factor to such a trend is:
• Competition being stabilized.
• Increased competition between the two mobile competitors (TVL and Digicel) meaning that end users or consumers first moved from one operator to the other as shown by the increasing trend then followed by the decreasing trend as consumers pick their network of preference.
• Customers often have more than one mobile service provider’s account maintaining pre-paid accounts with both Digicel and TVL, so as to take advantage of discounted prices for on-net calls.
• After trialing service on both providers they may have made a selection of need for only one mobile service provider.
Price change and special offers within the market provided by both TVL and Digicel and the increased knowledge of customers in being able to understand mobile functionality and general competition behaviors, were also seen as a contributing factor to affect customer behavior to subscribe and use their preferred service providers. Regulatory intervention and TRR’s investigation into TVL’s anti-competitive complaint, may also have affected market subscriptions and operators innovation; one way or the other. Overall, in short, the market for mobile retails services between the period of 2012 and 2013 appears to be stable as competition has matured.
For internet subscriptions, a significant change became apparent in 2009, when a number of new small and medium sized internet service providers entered the market. They contributed to the steady increase in internet subscriptions by driving the trend towards wireless access as opposed to traditional land line access. With the smaller providers impacting on the price and packaging of wireless internet, it became affordable for many households within the two key business and municipality areas, Port Vila and Luganville.
Registered internet subscribers continue to increase significantly in 2013 to now nearly 40,000. The increased demand for internet services is a response to competition and the increasing availability and affordability of multiple types of devices that can access the internet. This means around 15% of the population is now subscribing to internet services; a significant increase from 2012.
As mobile services were introduced into the telecommunications market in the period 2007 to 2009, fixed services subscriptions decreased as consumers found it more efficient, easier and more affordable to use mobile services compared to fixed services. In addition, as wireless internet services became popular in the market, fixed line subscriptions dropped further. However, in the period 2012-2013, fixed retail subscriptions can now be seen to be slightly increasing. This is because Digicel started to compete in the fixed retail services market and TVL focused more on utilizing its underground fiber cable by targeting key customers. Such increase also reflects the recent expansion in fixed wireless services and if the trend continues, fixed services subscriptions could be expected to increase further, even if slightly, in the coming years.
Figure 3 represents the gross revenue collected by the entire Telecommunications Market industry over the last 6 years. It indicates that the market was relatively stable until 2013 when revenue was shown a slight increase indicating that the market appears to be on the rise due to higher demand for, and usage of telecommunications products and services.
In the telecommunications sector, key infrastructure includes:
• Towers – service providers continue to invest in this type of infrastructure given the number of towers increase throughout Vanuatu as roll outs continue. As competition grows, new services demand for new towers and new base stations to be built. 2013 saws an increase of towers spreading throughout Vanuatu, which looks towards, and signals, future growth.
• Buildings – service providers continue to invest in maintaining and upgrading their buildings.
• Networks – upgrade of networks is critical for improved service delivery. Networks were upgraded from 2G to 3G+ in certain areas towards this objective.
• Submarine cable – the arrival of submarine cable in Vanuatu in November 2013 was a major infrastructure investment in the sector this year and beyond.
According to the Vanuatu National Provident Fund report, the telecommunications/ICT sector provides at least 370 active jobs, made up of 1.4 % of the total VNPF registered employment rate of Vanuatu. The sector also provides more than 1500 jobs to Ni-Vanuatu citizens in the form of subcontractors, vendors and other employment. TRR is working closely with the National Statistics Office and the Reserve Bank of Vanuatu in the development of indicators for the telecommunications sector.
The indicators show year-by-year results of this Sector’s contribution to GDP. Statistical information obtained from the Reserve Bank, shows that the telecommunications and ICT sector contributed 5.2% to the GDP growth for 2013. This Sector has consistently, over the last five years, contributed an average of at least this figure to Vanuatu’s economy and GDP; and is recognized as a major contributor.