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This case study looks at the relationship between international bandwidth prices in Mauritius and the impact of its Cyber Island strategy. Whilst other countries along the SAT-3/SAFE cable have struggled to find ways to address the high costs of monopoly international bandwidth on this cable, Mauritius has used a price determination to address the issue. Interestingly, once the process was announced, the incumbent Mauritius Telecom itself decided to lower prices ahead of the determination.
The example of Mauritius perhaps has lessons for other countries in Africa that want to find ways of changing the basis of their economies so that they can add “smart exports” alongside raw materials extraction, agriculture and tourism. Whilst is always hard to draw direct causal links between bandwidth prices and wider changes in the economy, it is clear that Mauritius’ call centre/BPO sector began to get significant growth in the years when the international bandwidth prices came down.
The nature of “smart exports” – where countries use brain-power to add value to basic tasks – may change in the coming period. Although multinational companies have been driven to reduce their operating costs, they are also reflecting on the successes and failures of outsourcing. But there will also be new waves of outsourcing: for example, Lucas Films (responsible for the Star Wars movies) has set up a major new operation in Asia to do animation and specials effects. But whatever happens next, competitive international bandwidth will be essential to any country that wants to get this kind of work in the future.