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The Mobile Economy Pacific Islands 2019

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The Mobile Economy Pacific Islands 2019 The Mobile Economy Pacific Islands 2019 Copyright © 2019 GSM Association The GSMA represents the interests of mobile operators GSMA Intelligence is the definitive source of global mobile worldwide, uniting more than 750 operators with nearly operator data, analysis and forecasts, and publisher of 400 companies in the broader mobile ecosystem, authoritative industry reports and research. Our data including handset and device makers, software companies, covers every operator group, network and MVNO in every equipment providers and internet companies, as well as country worldwide – from Afghanistan to Zimbabwe. It is organisations in adjacent industry sectors. The GSMA also the most accurate and complete set of industry metrics produces the industry-leading MWC events held annually in available, comprising tens of millions of individual data Barcelona, Los Angeles and Shanghai, as well as the Mobile points, updated daily. GSMA Intelligence is relied on by 360 Series of regional conferences. leading operators, vendors, regulators, financial institutions and third-party industry players, to support strategic For more information, please visit the GSMA corporate decision-making and long-term investment planning. The website at www.gsma.com data is used as an industry reference point and is frequently cited by the media and by the industry itself. Our team Follow the GSMA on Twitter: @GSMA of analysts and experts produce regular thought-leading research reports across a range of industry topics. www.gsmaintelligence.com [email protected] Contents EXECUTIVE SUMMARY 2 1 INDUSTRY OVERVIEW 8 1.1 Mobile market: ongoing shift to mobile broadband 9 1.2 Market structure: challenges of fragmentation and lack of scale 11 1.3 Financials: modest growth out to 2025 13 2 MOBILE AS A PLATFORM FOR ADDRESSING SOCIAL 16 CHALLENGES AND EMPOWERING CONSUMERS 2.1 Enabling life-enhancing digital services 17 2.2 Mobile internet delivering digital inclusion 18 2.3 Enabling innovation for socioeconomic impact 22 2.4 Mobile helping boost financial inclusion 24 3 HARNESSING SPECTRUM AND REGIONAL 26 COLLABORATION 3.1 The importance of spectrum and WRC-19 27 3.2 The importance of collaboration and harmonising regulation 29 The Mobile Economy Pacific Islands 2019 Executive Summary 2 Executive Summary The Mobile Economy Pacific Islands 2019 The ongoing shift to mobile broadband and digital transformation Mobile technology can play a pivotal Operators are investing to improve role in the digital transformation of the LTE network coverage and speeds. 4G Pacific Islands, enabling access to life- connections are set to account for more enhancing services in areas such as health than half of total connections by 2023, and education, while proving a catalyst doubling the figure from the end of 2018. for innovation and economic growth, with The shift to mobile broadband and 4G also the promise of new jobs and increased tax reflects the increasing rates of smartphone revenues. adoption. From just 30% of connections at the end of 2018, this is forecast to more than The Pacific Islands region is seeing only double to 65% by 2025, helped by declines modest mobile subscriber growth at a time in smartphone prices and the emergence of when subscriber penetration rates remain new, low-cost smartphone vendors. well below regional and global developed- market averages. Although 38% of the Faster network speeds and more advanced population subscribed to a mobile service devices are key to bringing populations as at the end of 2018, this trails the average online. At the end of 2018, mobile internet for least developed countries (44%). Within penetration in the Pacific Islands was the the region, there is significant variation in lowest of any region in the world, at just 18% the development of local mobile markets; of the population. This figure will grow over subscriber penetration rates range from a the coming years, but by 2025 only a third high of 84% in Fiji to a low of just 11% in the of the population will have mobile internet Marshall Islands. Papua New Guinea is by access. This will leave more than 9 million some way the most populous country in people across the region offline, limiting their the region; with a subscriber penetration ability to participate in the digital economy rate of 30%, it is home to the majority of the and take advantage of the opportunities it unconnected population across the region. can offer. Infrastructure challenges remain Many countries in the region face issues There is growing support for innovation around infrastructure – one of the GSMA across the region, with the emergence of Mobile Connectivity Index’s four key enablers new tech hubs and a developing ecosystem of mobile internet and a contributor to the of entrepreneurs and new ventures looking connectivity gap in the region. Factors behind to adapt emerging technologies such as this challenge include the fact that numerous blockchain to the particular challenges of countries have yet to complete the digital the Pacific Islands. Most islands still lack switchover process and are therefore yet to properly developed innovation ecosystems allocate spectrum in the digital dividend band due to the limited size of the individual (700 MHz) to mobile services. In addition, the markets, the complexity of developing sound scarcity of international internet bandwidth infrastructure between the archipelagos, and is a key limiting factor only gradually the significant leverage of larger regional being addressed as new submarine cables hubs in Asia Pacific. improve connectivity. Executive Summary 3 The Mobile Economy Pacific Islands 2019 Mobile helping to boost financial inclusion Financial inclusion remains a challenge across Mobile has a key role to play in facilitating all areas of the Pacific Islands. However, the adoption of financial services in many initiatives at a regional and country level developing regions. Today there are a total of have made some progress in recent years. nine live mobile money services available to The Pacific Financial Inclusion Programme the unbanked in six different countries across (PFIP) was launched in 2008 and has funded the Pacific region: two in Fiji, three in Papua 44 projects with financial service providers New Guinea and one in each of Samoa, the who have innovated with technology and Solomon Islands, Tonga and Vanuatu. There products, in the process helping more than are high levels of registration on some islands: 2 million Pacific Islanders access formal 51% of the combined adult population of Fiji, financial services. Samoa, Solomon Islands and Tonga have a mobile money account. However, activity levels remain low, with less than 10% of these accounts currently active. Unlocking the full potential of mobile To unlock the full potential of existing and speed broadband, industrial automation future mobile networks, access to sufficient and intelligent transport systems. It can spectrum for better coverage and capacity help provide access to better healthcare, is a necessity. When licensing spectrum, move virtual and augmented services to the the priority for governments and regulators mainstream, and improve public safety. should be to support affordable, high- While the Pacific Islands region might not quality mobile services. One of the best be one of the first to roll out 5G services, opportunities for collaboration is the World supporting an IMT identification during Radiocommunication Conference of the ITU. WRC-19 offers regulators the flexibility to At WRC-19, the future success of 5G is at make mmWave spectrum available for mobile stake, since the decision for mmWave bands services if and when needed. This additional will be taken at the conference. This is not just flexibility will allow the Pacific Islands to for countries where 5G is rolling out in the benefit from a mature ecosystem and massive next couple of years, but for everyone. The economies of scale to see 5G develop in the spectrum assignment process is a long-term same way as LTE has done in the region. New effort. Spectrum identified at WRC-19 can be submarine cables with improved capacity used for decades to come: it is important to and other technical advancements are setting shape 5G today. the stage for advanced broadband services, including 5G. The GSMA recently published a report on the socio-economic benefits of 5G services There are several common themes to the provided in mmWave bands. Rolling out challenges of addressing the digital divide 5G using mmWave is an opportunity to in the region, including access to internet radically reshape services such as ultra-high connectivity, financial services and other 4 Executive Summary The Mobile Economy Pacific Islands 2019 life-enhancing digital products and services. of bodies including the World Bank and the GSMA The often challenging natural environment and are highlighting the importance of collaboration and topography are limiting factors on the provision harmonisation in various areas of both telecoms and of mobile coverage or access to other basic broader ICT regulation. services, while low population densities and The ITU has previously suggested that the Pacific relatively modest population totals mean operators Islands could become a showcase for developing and other ecosystem players often struggle a ‘collaborative framework’ – a call that resonates to scale new services and deployments in a beyond just the mobile sector to encompass all cost-effective manner. developmental initiatives in the region. The
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