UNIVERSITY OF HAWAI'I LIBRARY COMPETITION AND INNOV A TION IN WIRELESS MOBILE AND INTERNET SERVICE IN SAMOA: A CASE STUDY A THESIS SUBMITTED TO THE GRADUATE DIVISION OF THE UNIVERSITY OF !-IAWAI ' I IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF ARTS IN COMMUNICATION AUG UST 2008 By Filifotu F. Vaai Thesis Committee: Dan Wedemeyer, Chairperson Norman Okamura Jenifer Winter We certity that we have read this thesis and that, in our opinion, it is satisfactory in scope and quality as a thesis for the degree of Master of Arts in Communication. THESIS COMMITTEE ~l~~~l - ii ACKNOWLEDGEMENTS I would like to express my deepest appreciation to my committee Chair, Dr. Dan Wedemeyer and my committee members Dr. Norman Okamura and Dr. Jenifer Winter whose advice and tutelage guided me on this academic endeavor. My studies at UH Manoa have been funded by the United States State Department and the East West Center and I thank them for their support. I would also like to acknowledge the assistance of all my interview participants, members of the Government of Samoa and the ICT sector as well as the Prime Minister of Samoa, Honorable Tuilaepa Sailele Malielegaoi for the gracious donation of their time and insights. Finally, I would like to thank the many friends and relatives whose unwavering love and support continues to see me through my academic journey and life. iii ABSTRACT This study explores competition in Samoa's wireless mobile and internet service markets respectively. The research purpose was firstly to discern whether competition had been successful in those markets and secondly, to identify what the current issues being faced by policymakers, the telecommunications regulator, the service operators and users in relation to the competitive teleco=unications market. It was found that competition had successfully stimulated innovative performance in the wireless mobile market but true competition had yet to be attained in the internet service market due to an exclusive license on the provision of wholesale data. Particular regulatory issues in this case included the lack of interconnection rate calculation and procedures and the exclusivity of licensing on international data gateways. In relation to size, it appears that a small population can sustain competition if the regulatory and business models are conducive to it. Reco=endations and future areas of research are discussed. iv T ABLE OF CONTENTS Acknowledgements ............................................................................................................ iii Abstract .............................................................................................................................. iv Table of Contents ................................................................................................................ v List of tables ..................................................................................................................... viii List of figures ..................................................................................................................... ix Chapter 1: Introduction ....................................................................................................... I Definitions ....................................................................................................................... 3 Chapter 2: Literature review ............................................................................................... 5 Compe ti 'ti" on ill T e Iecommuruca . ti' ons ............................................................................. 5 Innovation in Telecommunications ................................................................................. 8 Competition, Regulation and Innovation in telecommunications ................................. 11 Competition in Telecommunications in the South Pacific ............................................ 16 Summary ....................................................................................................................... 22 Research model ............................................................................................................. 23 Chapter 3: Methodology ................................................................................................... 27 Introduction ................................................................................................................... 27 Statement of the Problem: ......................................................................................... 28 Purpose ...................................................................................................................... 29 Research Questions and Objectives ........................................................................... 30 Significance of the study ........................................................................................... 31 Research Design ............................................................................................................ 31 Qualitative Knowledge Claims .................................................................................. 31 Case study research design ........................................................................................ 32 Role of the researcher ................................................................................................ 35 v Data collection procedures ........................................................................................ 36 Data analysis procedures ........................................................................................... 39 Issues of validity ........................................................................................................ 40 Chapter 4: Findings ........................................................................................................... 42 Telecommunications in Samoa - the current situation ................................................. 43 Background infonnation ............................................................................................ 43 ICT indicators ............................................................................................................ 44 Current State of the Industry - Services ..................................................................... 45 Service Provider Profiles ........................................................................................... 48 Policy Environment ................................................................................................... 53 RQ.l. What are the current issues faced by various stakeholders involved in competitive wireless mobile and internet service markets in Samoa? .......................... 58 Govemment ............................................................................................................... 58 Regulator ................................................................................................................... 62 Service Operators ...................................................................................................... 65 Users .......................................................................................................................... 69 RQ.2. Has competition resulted in innovation and imprOVed telecommunications perfonnance in wireless mobile and intemet service in Samoa? .................................. 71 Wireless mobile market ............................................................................................. 71 Internet service .......................................................................................................... 74 Users .......................................................................................................................... 76 Chapter 5 : Analysis ........................................................................................................... 77 Theoretical Discussion .................................................................................................. 77 Intervening variables ................................................................................................. 80 Regulation ............................................................................................................. 80 Socio-economic context. ....................................................................................... 81 Research implications ........................................................................................... 83 vi Areas of future research ................................................................. '" .................... 84 Chapter 6: Conclusions ..................................................................................................... 85 Appendices ........................................................................................................................ 87 Appendix A. Consent Forms, Interview & Focus Group Questions ............................. 87 Appendix B: List of Codes ............................................................................................ 96 Appendix C. Background information on Samoa ......................................................... 98 Appendix D. Chronology of Key Events in Samoa's ICT and Telecommunications History ......................................................................................................................... 103 References: .....................................................................................................................