INTERNET COMPETITION CUTS TELECOM FIJI PROFITS

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SUVA, Fiji (Fijilive, July 30) - The opening of the Internet market in Fiji to competition has seen Internet Services Limited’s, trading as Connect, profits decline by 61 percent.

Connect, a subsidiary of Telecom Fiji Ltd, made a net profit after tax of FJ$600,000 [US$386,000] for the financial year ending March 31, 2007 (down from FJ$1.53 million [US$984,000] the previous financial year.

Company chief executive officer Sharon Smith Jones says the decline in profits was a result of the combination of reduction in revenue and increased direct costs.

She says the company’s revenue declined by 7.7 percent as the company introduced significantly discounted rates in response to the opening up of the ISP market to competition.

Rival Internet service providers include Kidanet, launched by Fiji International Telecommunications Ltd this year, Unwired Fiji and Oxygen.

The company’s direct costs increased by 7 percent commensurate with higher bandwidth use with the increased number of broadband customers connected to the network.

However, Jones says all other costs, including personnel; administration and marketing were reduced by 2 percent as a result of the implementation of group shared services.

The company launched the new MobileNet service in January this year, which operates on Telecom Fiji’s CDMA wireless network. MobileNet is targeted primarily at university students and business customers with a need for mobility.

Connect also introduced another package, the MiBiz a broadband package targeted at small and medium sized business customers.

This year also saw the launch of free local calls as in incentive to attract customers to the broadband service, now used by over 500 customers, Jones says.

She says broadband continues to show strong growth with over 8,500 subscribers, 95 percent of them using ADSL. "The service continues to be introduced and expanded nationwide."

Jones says revenue in the dial up service continue to decline as customers migrate to the broadband service. "This trend will continue as more areas in Fiji are upgraded to broadband via ADSL."

Connect, she notes has experienced some erosion in its market share, along with the launch of the third ISP in Fiji, "but it continues to grow its customer base especially in broadband".

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