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TCI infrastructure ‘not so valuable’

Friday May 30, 2014 Written by Published in Weekend
Telecom Cook Islands headquarters in Rarotonga. 14040719 Telecom Cook Islands headquarters in Rarotonga. 14040719

Local commentator Bill Carruthers has taken a keen interest in telecommunications developments, both here in the Cook Islands and overseas.

In this three-part article he explains why it is not a good idea for locals to buy Telecom Cook Islands shares from Telecom New Zealand, and what alternatives and opportunities there are. This is the third and final part. (Here is Part 1 and Part 2)

There have also been letters suggesting that the Government should buy all the shares back from TCNZ because the TCI infrastructure is so valuable – going on to suggest that even the O3b system is worth millions on its own.

This is patently ridiculous – a new entrant would not even begin to value TCI at just under $40 million – which is what Digicel’s offer would equate to for 100% of the shares were it not necessary to “break” TCNZ’s greedy grasp on Cook Islanders.

A final price is not yet available but an estimate based on similar non O3b stations would suggest a base figure around $150K depending on options. Definitely not the millions some think.

A non-movable alternative or a VSAT unit would be far cheaper.

The critical point that should be universally recognised by all Cook Islanders is that unless this opportunity to end the monopoly situation is embraced, we will all be condemned to suffer more years of being ripped off by an intrinsically greedy monopoly operator. Does it really make it better to know your being buggered by a local, rather than TCNZ? Unless the monopoly ends, this amounts to nothing more than changing the telecommunication slave masters.

This situation should not become a political issue; ideally, both or all political parties will agree to work together and make decisions and adopt policies based on economic realities and real facts that will be for the long term benefit of the Cooks.

One of the long term benefits of ending the monopoly is that the country needs to be able to adapt to changes in technology in a nimble fashion, which it can never do if it has a dinosaur monopoly that considers liberating and consumer friendly companies like Skype, Google and WhatsAPP, to be “the enemy” which was (is) the position of TCI under its TCNZ masters.

The following are two examples of the new offerings that will allow competitors to offer different, maybe better, maybe faster, maybe cheaper, service, than even O3b. And these are only the ones already there. There is no doubt the future will hold many more improvements – how can we possibly justify allowing a monopoly that would block or otherwise control such improvements?

Quote from http://en.wikipedia.org/wiki/Inmarsat: “In August 2010 Inmarsat awarded Boeing a contract to build a constellation of three Inmarsat-5 satellites, as part of a US$1.2 billion worldwide wireless broadband network called Inmarsat Global Xpress. The three Inmarsat-5 (I-5) satellites will be based on Boeing's 702HP spacecraft platform. The first is scheduled for completion in 2013, with full global coverage expected by the end of 2014. The satellites will operate at Ka-band in the range of 20–30 GHz. Each Inmarsat-5 will carry a payload of 89 small Ka-band beams which combined will offer global Ka-band spot coverage. In addition each satellite will carry six fully steerable beams that can be pointed at commercial or government traffic hotspots. According to Inmarsat, Global Xpress will deliver download speeds in excess of 60Mbit/s to a 60 cm dish”

Note well – a 60 cm dish receiving 60Mbits/sec – no one will need any TCI or anybody else. This would mean that one could hide one of these in a box or behind a window and feed it wirelessly to your neighbours and friends or village; and the local monopoly TCI would have to employ “Dish police” to try and stop you! Do we really want to go down this track?

“There are plans to offer high-speed inflight broadband on airliners through Global Xpress.

In February 2011 Inmarsat announced that iDirect had been awarded the contract to provide both the ground segment and the 'core module' that provides the key electronics in the new GX maritime (and later for other markets) terminals.  iDirect was already established as the leading player in the maritime VSAT field and the award of this contract confirmed their dominance of this market. The proposed GX system will deliver data at rates of up to 50 Mbit/s -an order of magnitude faster than existing VSAT systems using C-band or Ku-band satellite capacity and two orders faster than the existing L-band services.

The first satellite of the Global Xpress constellation was launched in December 2013 and is currently in geostationary orbit awaiting service launch.”

In summary I would suggest that logic, common sense and fairness all demand that the monopoly should be ended.

The same criteria insist that any locals attempting to buy the TCI shares should be willing to have, and even be encouraging the monopoly to be lifted, if they genuinely have the benefits to the majority of Cook Islanders at heart.

And they should be informed immediately that this will be the case. It would be interesting indeed to hear their counter arguments to this policy, if any are forthcoming.

Proposed local investors must be made to realise that there is no way that TCI will continue to be a goldmine if the market is liberalised. It would be like buying shares in a biplane company just before WW2.

And let us not forget that if the market is liberalised that any and all of the local investors can set up and operate in competition with Digicel for far less capital investment than paying $40 million for all the shares – so if they have a genuine idea for running a telecom service to the Cooks they should delight in the breaking of the monopoly and get stuck in.

The Government should take this opportunity to sell all its shares (or most of them) to whoever is willing to buy them for a price that matches or even beats what Digicel is paying to TCNZ. There will never be a time to get as much for them. It could possibly retain a small percentage primarily to have a reason to retain one or two seats on the board of directors of the reformed TCI, although there would be little real benefit to that, and Digicel could probably be “persuaded” to appoint some “locals” to its new board of directors.

Finally I would state that I am a political atheist and hold all the parties in the same degree of ….esteem??

I also have had no contact with Digicel and have no interest whatsoever in “running” or partnering with anyone to run whatever TCI shall become.

Some links to systems and equipment that ANYONE should be able to buy and use in the MFCI:




1 comment

  • Comment Link David Yack Monday, 11 July 2016 08:19 posted by David Yack


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