The true cost of information

As the 21st Century marches on and tourism figures wax and wane in the Cook Islands, one factor that may affect repeat tourist visits is ease of access to the internet, or more specifically the price of free information.
With recent debate arising around the cost of public access to the internet, we conducted a by no means exhaustive survey evaluating the costs per hour for net café-style usage and per-megabyte costs for increasingly popular WiFi access.
In a letter to the Cook Island News dated May 7, Telecom CEO, Jules Maher, stated that Telecom is “one of, if not the cheapest” WiFi providers on the island. We present the following data from our investigation.
WiFi prices vary on Rarotonga, with the most expensive access coming from Telecom itself, at $0.36/mb, or $36 for a 100mb WiFi card. Ironically Telecom also ranks at the cheapest WiFi spot with a per megabyte cost of $0.16/mb if you are willing to part with $64 for the 400mb privilege.
What this means is that Telecom is not only one of the cheapest providers on the island, but it is also one of, if not the most expensive on the island. Dive Rarotonga offers WiFi at all price points at a flat rate of $0.20/mb, making it the most consistently lowest-priced providers on the island.
In the category of internet cafes, Dive Rarotonga also takes the cheapest provider crown, with a per hour price of $6. This decreases to $5 per hour if two hours are purchased. Telecom’s best offering is $9 per hour, with the Rarotongan Resort, owned by current Tourism board member Tata Crocombe, coming in last on the ladder with a $3 per 10 minutes price, equal to a whopping $18 per hour.
Telecom insists that it does not have the monopoly on WiFi services, that there are other providers on Rarotonga. We did identify five separate WiFi systems in operation on the island, inclusive of Telecom. However, they all have something in common, namely that their initial broadband services are provided by Telecom.
The idea that these other ‘providers’ are in competition with Telecom is therefore a contentious issue, as without Telecom selling these retailers their internet connection there would be no competition whatsoever.
Telecom also sets the prices for its competitors’ internet access, thus dictating its competitors profit margins if they are to compete with Telecom’s prices. So, rather than encouraging competition, this could alternatively be considered anti-competitive practice relating to limit pricing, whereby the cost of entry into the internet market is set by a monopoly.
And surely having your provider as your competition is a bad position for a business to be in – if you become too “competitive”, your provider can either raise the prices of the business lines they provide or cut off their competitors. Telecom, it would seem, holds the ace of spades in every hand it plays.
Maher made it clear in another letter to the editor that Telecom itself considers these other providers as competition, further stating that “Telecom is comfortable with the fact that (their supplying other internet retailers) makes them both customers and competitors of Telecom.”. However, not everyone sees it the same way. Many of the other purveyors of this secondhand internet rationalise that, as customers, they cannot be in competition as they have already paid Telecom’s charges. A charge that could be paid by them or directly by tourists; either way Telecom gets their money.
Telecom is currently the only internet provider on the island yet still isn’t the cheapest seller of internet. Its “rivals” all buy their internet access off Telecom and then resell it through their own cafes and WiFi access systems. Considering this, it would be reasonable to assume that these providers would be more expensive than Telecom, yet some still manage to make a profit whilst undercutting Telecom’s prices.
If the Cook Islands is to compete in a modern tourist market it must move with the times. Hotels in the United States generally offer free WiFi in your room or a lobby area as part of your accommodation costs. This also holds true in many other nations, including such Third World nations as Vietnam and Cambodia where the cost of your night’s hotel accommodation, inclusive of free WiFi, can cost as little as an hour’s internet access on Rarotonga.
To adopt these kind of initiatives here, the telecommunications monopoly on this island must either act in the public good and provide low cost internet or the market must be opened to other true competitors.

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