During the last Norfolk Island election campaign many candidates spoke of the desirability of Norfolk bound aircraft departing from the domestic terminal. Most candidates felt that such a change would be beneficial to tourism and therefore to our economy.
This issue has been around for some time. When discussed at a Chamber of Commerce meeting and members and travel industry professionals agreed that it would be a positive development. Alternative airlines have also indicated that this would be a pre-condition for flying to Norfolk. Both the Australian and New Zealand governments are moving towards an open skies policy to improve the ease of travel between these two countries for sound economic reasons.
While we hear words of support for the idea of domestic terminal departure from individual members of the NI Government and the Assembly, there does not appear to be a clear Norfolk Island Government policy position on this. It has been said that the Commonwealth is the obstacle to this. Given the importance of getting the Tourism industry on Norfolk rolling again, and given that we now are engaging with the Commonwealth on a range of fronts, lets get this change happening ASAP
Saturday, October 23, 2010
Norfolk Island Spin
With tourism underperforming as the major plank in Norfolk Island economy, Norfolk Island’s participation in the South Pacific Internet Network (SPIN) has been promoted as a vital addition to our infrastructure. It is seen as providing enhanced opportunities for a range of e-commerce opportunities as well as social benefits through services to education, information and health/telemedicine services. Other benefits flagged include;
• Meeting projected future needs in education e.g. a NSW Education proposal to deliver 10 Meg to all NSW schools.
• Enabling multimedia services such as the delivery of IP Television, Video on Demand, Video Telephony, 3G and 3.5G mobile capability.
• Making Norfolk more attractive to overseas firms considering establishing on Norfolk including remote business that may desire to Telehouse equipment on Norfolk Island.
SPIN however comes at a cost. With the current exchange rate this would amount to a fraction over A$1.8 million per year at a minimum for 20 years, almost $1.3 million more than current cost of $500,000 per year paid to NZ Telecom for the satellite service. In terms of capability, SPIN wins. Satellite bandwidth is currently limited at approximately 14Mbps while SPIN will provide 155Mbps in the proposed intial uptake. While the SPIN operation will eliminate the need to purchase satellite bandwidth from NZ Telecom, NZ Telecom would likely remain as our international gateway and some charges will remain.
The NIG has previously indicated that it holds letters of intent related to Gaming and from organisations interested in establishing Call Centres and Technology Centres as well as expressions of interest from other parties if SPIN becomes a reality and there are opportunities to sell excess capacity. Financial service providers are also possible players. It is of concern though, that until Norfolk Island can attract greater use of the bandwidth from commercial operators, the SPIN commitment will need to be fully funded from Norfolk Telecom’s existing activities, including a contribution from the Gaming GBE. NIG has previously suggested that new gaming initiatives could deliver as much as $5 million p.a. in additional revenue although they may wish to revise this down in the light of more recent events.
SPIN as a commercial project is now under a cloud as several players, important to the financial viability of the project have apparently withdrawn. This may be a touch of schadenfreude for Norfolk. While an ill timed withdrawal by Norfolk would attract a substantial penalty, if SPIN fails to deliver, we are off the hook. It is understood that NIG is looking at options other than SPIN which involve an enhanced satellite service. This is a wise move.
Unless there is some substantial take up of the bandwidth by other commercial operators, Norfolk Telecom, or more to the point, Norfolk Telecom consumers, cannot afford SPIN. Would you pay three times what you’re currently paying for internet? Without fibre to the home and without any 3G or 3.5G mobile capability – that will be extra. How about a cross subsidy from another loading on fuel prices? I don’t think so.
For SPIN to be viable, it needs to be part of a de-regulated market where Norfolk Telecom would be privatised as a whole or broken up into its constituent parts. Divestment of the mobile phone business and the ISP would allow profit driven operators the freedom to pursue new business opportunities with some vigour. Currently Norfolk Telecom is adopting a siege mentality and indulging in anti competitive practices. If Norfolk Telecom was purely an infrastructure provider selling access to its physical resources at competitive fees without itself being a retailer of services, we could anticipate more effective utilisation of increased capacity.
Norfolk Telecom, competitive practices aside, appears to operate quite effectively doing the “techhead” side of things, but it needs cashed up entrepreneurs with real market savy to take the next step.
At this point NI Telecom needs to step up or step down or alternatively, convince the Commonwealth that Norfolk should be part of the NBN, but that’s a whole new ball game.
• Meeting projected future needs in education e.g. a NSW Education proposal to deliver 10 Meg to all NSW schools.
• Enabling multimedia services such as the delivery of IP Television, Video on Demand, Video Telephony, 3G and 3.5G mobile capability.
• Making Norfolk more attractive to overseas firms considering establishing on Norfolk including remote business that may desire to Telehouse equipment on Norfolk Island.
SPIN however comes at a cost. With the current exchange rate this would amount to a fraction over A$1.8 million per year at a minimum for 20 years, almost $1.3 million more than current cost of $500,000 per year paid to NZ Telecom for the satellite service. In terms of capability, SPIN wins. Satellite bandwidth is currently limited at approximately 14Mbps while SPIN will provide 155Mbps in the proposed intial uptake. While the SPIN operation will eliminate the need to purchase satellite bandwidth from NZ Telecom, NZ Telecom would likely remain as our international gateway and some charges will remain.
The NIG has previously indicated that it holds letters of intent related to Gaming and from organisations interested in establishing Call Centres and Technology Centres as well as expressions of interest from other parties if SPIN becomes a reality and there are opportunities to sell excess capacity. Financial service providers are also possible players. It is of concern though, that until Norfolk Island can attract greater use of the bandwidth from commercial operators, the SPIN commitment will need to be fully funded from Norfolk Telecom’s existing activities, including a contribution from the Gaming GBE. NIG has previously suggested that new gaming initiatives could deliver as much as $5 million p.a. in additional revenue although they may wish to revise this down in the light of more recent events.
SPIN as a commercial project is now under a cloud as several players, important to the financial viability of the project have apparently withdrawn. This may be a touch of schadenfreude for Norfolk. While an ill timed withdrawal by Norfolk would attract a substantial penalty, if SPIN fails to deliver, we are off the hook. It is understood that NIG is looking at options other than SPIN which involve an enhanced satellite service. This is a wise move.
Unless there is some substantial take up of the bandwidth by other commercial operators, Norfolk Telecom, or more to the point, Norfolk Telecom consumers, cannot afford SPIN. Would you pay three times what you’re currently paying for internet? Without fibre to the home and without any 3G or 3.5G mobile capability – that will be extra. How about a cross subsidy from another loading on fuel prices? I don’t think so.
For SPIN to be viable, it needs to be part of a de-regulated market where Norfolk Telecom would be privatised as a whole or broken up into its constituent parts. Divestment of the mobile phone business and the ISP would allow profit driven operators the freedom to pursue new business opportunities with some vigour. Currently Norfolk Telecom is adopting a siege mentality and indulging in anti competitive practices. If Norfolk Telecom was purely an infrastructure provider selling access to its physical resources at competitive fees without itself being a retailer of services, we could anticipate more effective utilisation of increased capacity.
Norfolk Telecom, competitive practices aside, appears to operate quite effectively doing the “techhead” side of things, but it needs cashed up entrepreneurs with real market savy to take the next step.
At this point NI Telecom needs to step up or step down or alternatively, convince the Commonwealth that Norfolk should be part of the NBN, but that’s a whole new ball game.
Subscribe to:
Posts (Atom)