FSM Meets Major Milestones in the Implementation of its Telecommunications Project
 
Press Release #1705-03
Palikir, Pohnpei
FSM Information Services
May 19, 2017

On May 4, 2017, FSM and Palau jointly hosted a signing ceremony at the Hyatt Regency Hotel in Guam to commemorate the signing of the supply contracts for the Yap, Palau, and Chuuk cable systems. Executive officials and managers joined together to participate in a commemorative signing ceremony and ribbon cutting to celebrate the roll out of the projects. 

 

During the ceremony, the Government of FSM together with Belau Submarine Cable Corporation (Republic of Palau), NEC Corporation (cable supplier, based in Japan), Globe (Republic of Palau’s partner, based in Philippines) and Telkom Indonesia aka Telin (FSM’s partner for the Yap cable, based in Indonesia), formally announced their collective partnership for the construction of fiber optic cable systems that will connect Yap, Chuuk (Weno) and the Republic of Palau to the rest of the world. NEC, as the cable supplier, announced that it had already begun construction and confirmed that delivery of the cable systems is currently on schedule to be completed by the end of this year. 

 

 

President Christian lead the program for the ceremony with a rousing speech thanking FSM’s partners and reflecting on FSM’s need to acknowledge the benefits of its partnership with the World Bank and regional partners in the Pacific to move the country’s development forward. President Christian said, “… today is a beginning - it sounds like a graduation speech - a beginning of a new fresh attitude toward this project. We now know it is going forward, it is no longer a speculation, it’s no longer an idea, it is indeed a project to be completed. I want to thank Telin and NEC and all the experts and technicians who put together their efforts and have been patient with us who, because of our own lack of better understanding have been slow to accommodate the dictates of certain organizations like World Bank and Asian Development Bank. Organizations that I like but I dislike at the same time. And having said that, there is really nothing else that I can say, as the president of a small nation that stands to benefit from this project.”

 

President Remengesau, Jr. followed with a passionate speech expressing his delight to see this milestone marked, and emphasized the fundamental necessity of obtaining submarine fiber networks which is not only needed to attract and generate revenue from touristm, but which will be critical to so many aspects of life of residents on the island, from healthcare to education, from social networking to business.

 

The executive officers from Globe and Telin and NEC also gave speeches expressing their support for the projects stressing that regional collaboration is for the mutual benefit of all parties.

 

Lukner Weilbacher, FSM Secretary of the Department of Transportation, Communication & Infrastructure signed an agreement with the Chief Technology Officer of Telin, Pak Nanang Hendarno, that would allow a submarine fibre optic cable spur currently under construction from Yap to interconnect with the Southeast Asia-United States (SEA-US) cable for onward transport to Guam. Globe President and CEO Ernest Cu and George Rechucher, Chairman of the Belau Submarine Cable Company signed a similar agreement for Palau with Globe. The signing of the two agreements was witnessed by FSM President Peter Christian and Palau President Tommy Remengesau, Jr. 

 

As a result of FSM and Palau partnering with SEA-US (Globe and Telin) and NEC, FSM’s provisioning of the Yap cable system is coming in at about $10 million under the original budget and the provisioning of the Chuuk cable system by NEC ensures a reduction in project management risk and an acceleration in delivery. The installation of all three cable systems will all be on a single vessel scheduled for loading in July of this year.

 

Overall project implementation responsibilities currently reside in the FSM Department of Transportation, Communication & Infrastructure and will soon be transferred to the newly established FSM Telecommunications Cable Corporation with its principal office at P.O. Box PS-250, Palikir, Pohnpei, FSM 96941.

 

 

Ownership and implementation responsibilities for the fiber optic cable systems is transferring from DTCI to the newly established FSM Telecommunications Cable Corporation (FSMT Cable Co.). FSMT Cable Co., as owner of the Yap and Chuuk cable systems, will provide open access (non-competitive) bandwidth access to the international cable systems for all domestic telecommunications operators in FSM.

 

FSM’s purchase of the Yap and Chuuk cable systems is with grant funding provided by the World Bank under a project that became effective in March, 2015. The project is the largest donor funded telecom project in the Pacific. The project includes implementation of market liberalization and regulatory reforms in tandem with new investments in the delivery of broadband connectivity to the FSM states of Yap and Chuuk. The current value of the project is $47.5 million. An add-on to include funds for Kosrae to participate in the East Micronesia Cable system project with Kiribati and Nauru will go up to World Bank’s board on May 31, 2017 for final approval. Once approved an additional $16.2 million in grant funding will be added to the existing project.

 

During the week of May 14-20, the World Bank ICT team was scheduled to be in Pohnpei to review last steps for the release of the project funds so that FSM can make payments for the Yap and Chuuk cable systems. The World Bank ICT team has also accepted FSM’s invitation to assist in the development of a proposal for a next phase ICT project that would support completion of the buildout of infrastructure to ensure that the international cable systems are distributed to end users in FSM. This would include implementing applications (e-health, e-government, e-education) to optimize the benefits of fiber connectivity to end users in FSM. The projects for the Yap and Chuuk cables along with the proposed add-on for Kosrae and proposed next phase ICT project would be fully funded by World Bank grants in the amount of $75-80 million.

 

Department of Transportation, Communication & Infrastructure (DTCI) Secretary Lukner B. Weilbacher has remarked that “FSM has adopted a national policy to connect all four FSM states (Yap, Chuuk, Pohnpei, and Kosrae) with fiber optic cable systems. In 2009, the HANTRU-1 cable system landed in the state of Pohnpei. As a result of the positive outcomes on the horizon for this project and through FSM’s collaboration and partnership with Palau and SEA-US, FSM is now on the cusp of securing cable connections to all of the FSM states. By the completion of this project, FSM, in collaboration of service providers, will be positioned to meet its objective to offer broadband connectivity to virtually the entire population of the FSM at competitive prices. The impact of these grant funded projects cannot be underestimated, as they will provide the core infrastructure and services that will be a foundation for future development.”

 

The release of funds for these projects by the World Bank depends on FSM carrying out next steps to implement the FSM Telecom Act of 2014, which opens up the telecom market to competition. As of press time, a bill had been transmitted to the FSM Congress and was scheduled for public hearing. The bill, if passed, will be the final step by FSM to release the project funds for the existing project and will ensure delivery of the capacity from the Chuuk and Yap cable systems to end users by early next year and to proceed on projects for the Kosrae fiber and domestic outlay and applications.