KEY POINTS:
New Zealand mobile phone subscribers jaded by high call costs should consider a holiday in Samoa for a breath of fresh cellular air. As you recline in the shade of a coconut palm, you can chatter away for ages at a fraction of New Zealand calling prices and even avail yourself of services not on offer in this market.
As the billboards on the drive from Faleolo International Airport into Apia make clear, there is thriving competition in the Samoan mobile market. That means refreshingly cheap calls - for those with kiwi dollars in their pockets - and coverage that has few holes.
Samoa's 180,000 inhabitants have two cellphone networks to choose from - Government-owned Samoatel or Digicel. Both are GSM.
But forget about expensive roaming charges - Vodafone customers who take their phone on holiday with them should substitute a SIM card from either local operator to get the benefit of cheap rates. I opted for Digicel on a visit this month, a tribute to the company's saturation marketing.
Samoatel is the incumbent fixed line operator but its mobile network is a few months younger than Digicel's, which was launched last November. Digicel, owned by Irishman Denis O'Brien, has scores of outlets selling handsets and top-up cards throughout Samoa's two main islands, 'Upolu and Savai'i.
Digicel was awarded a licence in Samoa in March last year and took a shortcut into the market by buying Telecom Samoa Cellular from 90 per cent owner Telecom New Zealand for $20 million, inheriting 33,000 customers.
That's small beer for O'Brien, who made a fortune by selling his Esat Telecom Group to British Telecom in 2001 for US$2.9 billion ($3.87 billion). Since then, Digicel has established itself in 22 Caribbean countries and is gradually spreading through the Pacific.
Digicel Samoa commercial manager Christian Fruean says the company's aim is to bring low-cost communications to Samoa. With calls billed by the second and starting at as little as 25 sene (12c) a minute, the country's telecoms regulator, John Morgan, thinks competition is working. The clearest sign is an explosion in the number of mobiles in use - up by 150 per cent in the past 12 months, to about 70,000.
"It's a significant increase with the advent of competition," Morgan says. At the same time, call costs have dropped, coverage has increased and a wider range of handsets have become available.
Even more competition is possible. Morgan, whose role spans spectrum management and looking after consumer interests, says a study will shortly look at whether a third network would benefit consumers.
Whether another operator could turn a profit is a different question which the study won't attempt to answer. With cellphone penetration at less than half the population, and only about 20,000 fixed-line phones in homes and businesses, there would seem to be scope for other operators. But Samoa is a low-wage economy, with as many as 90 per cent of cellphones prepaid, according to Morgan.
Building a network in Samoa isn't prohibitive by New Zealand standards. Because most of the population inhabits a narrow coastal strip around each island, Digicel can claim 95 per cent coverage with just 43 cell sites. It has spent about 110 million Samoan tala ($55 million), including the tab for Telecom Samoa Cellular. With a software upgrade its network can be converted to 3G, Fruean says, providing services as sophisticated as are available in New Zealand.
Samoans are already getting some services tailor-made for a society based on giving. One service, costing 10 sene, lets one prepaid customer text another requesting a credit transfer to their account. Fruean says it's a service Digicel developed in the Caribbean. But it's subject to abuse, according to Morgan, with opportunists sometimes filching credit from unattended phones.
Digicel has big ambitions, wanting to build a pan-Pacific business, says Pacific manager Vanessa Slowey.
Slowey is based in Papua New Guinea, where the company is pressing ahead with a network rollout after regaining a licence.
The company also has an experimental licence in the Solomon Islands and is awaiting word, expected by month's end, on a licence bid in Fiji.
Apart from the commercial rewards - whether large or small, privately owned Digicel won't say - Slowey finds it gratifying to be bringing low-cost calling to populations that haven't had it. "It's very exciting to see how you affect and improve people's lives," she says.
Slowey says she's aware of the dissatisfaction often voiced about the state of competition in New Zealand and offers a hint of a lifeline. "We're open to looking at any opportunity," she says. Any Kiwi who's tasted the cheap thrill of chatting on the phone while dodging falling Samoan coconuts knows there's an opportunity here going begging. *
Anthony Doesburg is an Auckland-based technology journalist
Pacific calling
* With only 180,000 inhabitants, Samoa has two cellphone networks.
* Services are provided by Digicel and Government-owned Samoatel.
* Digicel is already established in the Caribbean and is now spreading through the Pacific.
* Calls start from as little as 12c a minute.
* The number of mobiles has jumped by 150 per cent in the past 12 months and a third network will soon be considered.
