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EAP - The Pacific Infrastructure Challenge - World Bank (2006).pdf

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good example of this. <strong>The</strong> Kiwi Share is a contractual agreement requiring<br />

Telecom New Zealand (New Zealand’s incumbent operator) to make<br />

ordinary residential telephone service widely available, charge no more<br />

than the standard rate for ordinary residential telephone service and<br />

maintain free local calls for ordinary residential telephone service, fax and<br />

internet. All telecommunications service providers are required to<br />

contribute to the costs of the TSO through a premium on prices for<br />

interconnection with Telecom’s network. This is calculated and monitored<br />

by the Telecommunications Commissioner<br />

Universal Service Funds: <strong>The</strong>se funds, also called Telecommunications<br />

Development Funds, have implemented service expansion through a<br />

reverse auction process in which the operator which demands the lowest<br />

subsidy to extend mainline, mobile or internet services into rural or<br />

sparsely populated areas wins a contract to do so. <strong>The</strong> subsidy is financed<br />

through direct Government contribution, radio license fees or a levy on all<br />

major operators. This method has been employed successfully in the<br />

Dominican Republic.<br />

Price<br />

Figure A.5 compares the costs for three minute local, international and off peak<br />

mobile calls in <strong>Pacific</strong> and comparator countries. <strong>The</strong>se graphs show that many<br />

<strong>Pacific</strong> countries have relatively high international calling tariffs, but local and mobile<br />

calls rates are similar to comparator countries 31 .<br />

Figure A.5: Cost of a Three Minute Call: Local, International and Mobile (off peak)<br />

12<br />

0.25<br />

10<br />

US$ per 3 minutes<br />

0.2<br />

0.15<br />

0.1<br />

0.05<br />

0<br />

New Zealand<br />

1.2<br />

Samoa<br />

Mauritius<br />

Tonga<br />

Fiji<br />

Jamaica<br />

SolomonIslands<br />

PNG<br />

Saint Lucia<br />

Grenada<br />

St Kitts<br />

Kiribati<br />

Dominica<br />

Vanuatu<br />

US$ per 3 minutes<br />

8<br />

6<br />

4<br />

2<br />

0<br />

Jamaica<br />

Tonga<br />

New Zealand<br />

St Kitts<br />

Mauritius<br />

East Timor<br />

Barbados<br />

Fiji<br />

Samoa<br />

PNG<br />

Philippines<br />

FSM<br />

Kiribati<br />

Vanuatu<br />

Solomon Islands<br />

1<br />

US$ per 3 minutes off peak<br />

0.8<br />

0.6<br />

0.4<br />

0.2<br />

0<br />

Tonga<br />

Mauritius<br />

Philippines<br />

Marshall Islands<br />

Fiji<br />

Grenada<br />

Jamaica<br />

PNG<br />

New Zealand<br />

St Kitts<br />

Solomon Islands<br />

Kiribati<br />

Barbados<br />

FSM (Fed. States of)<br />

Source: ITU Data 2002<br />

31 Note: International calling rates in the <strong>Pacific</strong> are based on different zones. <strong>The</strong>se are defined by<br />

distance and do not accurately reflect the cost to the operator. For example, in Samoa calls to the US<br />

are relatively expensive as the US falls into ‘Zone 4’, but it is relatively cheap for the operator to<br />

deliver traffic to the US. <strong>The</strong> cost is therefore disproportionate. When comparing local call costs, bear<br />

in mind that Vanuatu has a single rate for calling anywhere in the country, while in New Zealand<br />

residential local calls are free, and the cost is recovered in a monthly access charge.<br />

82

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