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Economic Assessment: Subsidising Telecoms

case study

Economic Assessment: Subsidising Telecoms

The Isle of Man Government was offered the opportunity to lease capacity on the new international subsea cable system (CeltixConnect-2). They commissioned FarrPoint to conduct an independent economic assessment to understand the economic benefits this could bring to the Isle of Man.

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Project Manager: Matthew Izatt - Lowry

Background

As the Isle of Man government looked ahead to the future, several growth key areas – including eGaming, esports, data centres, Fintech and space & satellites – were identified as being possible opportunities requiring improved digital connectivity. This further strengthened the government's need to understand the demands on current subsea infrastructure and whether it could meet future growth, resulting in them enlisting the help of FarrPoint.

The Report

As part of this work, FarrPoint undertook an in-depth analysis of the current and expected future market provision and requirements of the current businesses operating on the island as well as in the key future growth sectors. In doing so, we engaged with key stakeholders on both the supply and demand side of the market.

In appraising possible interventions by the Isle of Man Government, FarrPoint also considered a full range of options beyond leasing capacity on the off-island cables, including underwriting commercial agreements, changing the way they engage with suppliers, and regulatory adjustments.

Conclusion

The impact assessment report’s key findings enabled the Isle of Man Government to assess whether the demand for digital connectivity could be met without the government's direct intervention in the telecoms market. The economic impact of potential government investment was assessed against the job creation/ economic growth on the island, and how this would progress without government intervention. This work enabled the Manx Government to make an evidence-based decision on whether to take a lease on the new sub-sea cable system.

The report also highlighted that digital connectivity remains a key challenge for the Isle of Man and that improved access and quality of supply to businesses on the Island could lead to sizeable returns on investment.

"FarrPoint were easy to work with and quick to respond to the brief. Their thorough analysis enabled us to understand the economic benefits to the Isle of Man of leasing capacity on the subsea cable. FarrPoint produced a factual and comprehensive report, the key findings of which, helped us develop our long-term strategy and improve policy around digital connectivity to the Island." - Richard Oliphant, Director of Digital Infrastructure & Telecommunications, Department for Enterprise, Isle of Man Government
"This was great project to work on, it was really interesting to talk to such a broad range of key stakeholders to discuss the role of digital connectivity in the Isle of Man’s future – from data centres and satellite connectivity, to esports gaming and FinTech, and understand what intervention may be needed to support this." - Matthew Izatt-Lowry, Economist at FarrPoint

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