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By Ulamila Kurai-Marrie

RAROTONGA, Cook Islands (Cook Islands News, Nov. 17) – Internet costs in the Cook Islands cannot be compared with New Zealand, says Telecom Cook Islands’ chief executive Stuart Davies, even though Telecom New Zealand is a majority shareholder in the company.

Davies made this comment when shown a comparison table on high-speed internet costs in the two countries.

Local Internet charges are the same for private and commercial users.

Two weeks ago, Davies announced a reduced cost with high-speed Internet, from NZ$1,585 (US$1,105) per month to NZ$999 (US$696) but still three times more than New Zealand’s $299 (US$208).

Davies says the Cook Islands is more expensive for a number reasons.

"Firstly we suffer from the lack of economy of scale that every business suffers from in the Cook Islands," he says. "Secondly, New Zealand gets Internet access via huge fibre optic cable links which are not accessible by the Cook Islands. The Cooks currently have two two-Mbyte bandwidth links via satellite while New Zealand has 3,000-Mbyte bandwidth via fibre optic cable. Satellite access costs far more per Mbyte than the same bandwidth via cable."

Davies says to make matters worse, demand is currently exceeding supply.

"Satellite capacity charges are going up and since Telecom Cook Islands tenders its international Internet access each year, this year the price went up due to Intelsat losing one satellite in January this year and demand is currently exceeding supply," he adds. "Telecom also provides a redundant link in case of failure as internet and e-mails have become an essential part of business in the Cook Islands and businesses cannot afford to have the internet down for any length of time. Internet access cost is Telecom’s biggest internet cost."

Telecom has just introduced a new platform for high-speed or broadband Internet users — with significant reductions in price for businesses and broadband residential plans to be announced next month.

Telecom will continue to evaluate costs and will pass on any reductions to customers.

"The current major cost is international access and should this cost fall, then Telecom will be in a position to reduce tariffs as it has done in the past with both Internet, national and international tolls," says Davies. Telecom is currently migrating business customers to the new broadband platform.

To date, Davies says, there have been no serious technical problems but because of the higher speeds and the nature of broadband, Telecom has found that additional transmission equipment will be required to extend the access beyond about five kilometres. Telecom is working on the problem and deploying the additional infrastructure, Davies says.

December 1, 2005

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