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The myriad islands of the southern Pacific Ocean are gradually moving into the age of mobile phones and Internet access, according to a report released recently by independent telecommunications analyst Paul Budde.

In a market worth a combined $1.8 billion a year, the most advanced islands are the farthest outposts of the European Union--the French territories of New Caledonia and Polynesia, where mobile phone penetration has reached 30 percent, Budde said in the report.

Several countries still use analog mobile phone networks, and penetration is still below 1 percent in the Solomon Islands, Tonga, and Vanuatu. New GSM networks were launched during 2002 in the Federated States of Micronesia, Tonga, and Vanuatu, while Kiribati is set to launch its first cellular network--GSM upgraded to GPRS--in early 2003, according to Budde's report.

In the U.S.-controlled territories of Guam and the Northern Marianas, fixed-line teledensities are between 50 percent and 60 percent, but fall as low as 2 percent in the countries of Papua New Guinea and the Solomon Islands.

As most telecommunications services are provided by government monopolies, call rates remain considerably higher than they are in more advanced telecommunications markets. But liberalization of services is beginning to move onto the agenda, Budde said.

Surfing the Net

Internet access and use also varies widely across the region. Access is generally limited to urban areas, and most countries still have only one ISP, which inhibits competitive dial-up charges and innovative new services, including e-commerce, according to Budde.

Several countries have discovered a lucrative new Internet business, which consists of selling domain names under their country-code top-level domain (ccTLD) names to commercial interests.

Niue (.nu), Tonga (.to), Tuvalu (.tv), and Micronesia (.fm) have all taken this route. Each has its individual cachet. Tuvalu has attracted television-related business, and Micronesia radio-related businesses. Tonga's domain registration has been passed to a company known as Tonic, which resells the domains. Niue-registered sites have also become popular for businesses and individuals from Europe, where local ccTLDs are becoming crowded.

Tokelau, which in April 2002 was the last country in the region to gain access to the Internet, has also set up a scheme to sell .tk registered names.

Despite these advances, the countries still lag behind the rest of the world in both basic and advanced services, a gap that is likely to take many years to overcome unless capital investment levels are dramatically increased, Budde said.

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