Telecom­mu­ni­ca­tions price falls will con­tinue in Pa­pua New Guinea, say Dig­i­cel and Te­likom

Cor­po­rate and res­i­den­tial telecom­mu­ni­ca­tions prices in Pa­pua New Guinea should fall over the next year as in­fra­struc­ture im­proves, ac­cord­ing to se­nior rep­re­sen­ta­tives of PNG’S two lead­ing telecom­mu­ni­ca­tions com­pa­nies, Te­likom PNG and Dig­i­cel PNG.

Business Advantage Papua New Guinea - - Infrastructure & Transport -

When John Man­gos, Chief Ex­ec­u­tive Of­fi­cer of Dig­i­cel PNG (PNG’S largest provider of mo­bile ser­vices) and Ma­hesh Pa­tel, Chair­man of state-owned Te­likom PNG (which has mo­nop­oly on fixed-line ser­vices in PNG), sat side by side to an­swer ques­tions at the Pa­pua New Guinea Ad­van­tage in­ter­na­tional in­vest­ment sum­mit in Port Moresby in Septem­ber 2013, the high cost of phone and data ser­vices in PNG was the big is­sue on the minds of del­e­gates.

Both men had good news, how­ever: new in­fra­struc­ture, they said, was de­liv­er­ing lower prices and bet­ter ser­vices.

‘I think this year alone we’ve spent about K200 mil­lion (US$82 mil­lion), and the ma­jor­ity of that is on 3G up­grades,’ said Man­gos.

‘But if you re­ally look at it, it’s all about data, it’s all about smartphones, tablets, how peo­ple re­main con­nected, so that’s re­ally where all the in­vest­ment’s go­ing.’

Data us­age ris­ing

‘When we started rolling out our net­works six or seven years ago, the de­mand re­ally was for voice and SMS ser­vices, and we started with low speed data. All we’ve seen from there is just a huge take-up in data us­age.

‘So, of the 730-odd sites that we have out there, we’re up­grad­ing 300 of those to 3G cell and also go­ing to be tri­alling LTE [Long Term Evo­lu­tion, also called 4G] shortly.

‘Most of the in­vest­ment is go­ing straight into data and there has also been a dou­bling of the voice ca­pac­ity over the last cou­ple of months as well.'

Te­likom sta­bil­is­ing in­fra­struc­ture

Ma­hesh Pa­tel said Te­likom PNG’S fo­cus is cur­rently on im­prov­ing an old in­fra­struc­ture.

‘The fixed-line in­fra­struc­ture has re­ally de­te­ri­o­rated while rev­enues are go­ing down. So, it’s a bit of a dilemma whether we spend and how much do we spend on that. The first pri­or­ity will be to sta­bilise the in­fra­struc­ture. ‘Sec­ond, we’ll be look­ing at go­ing into fixed-line broad­band. ‘With the ma­jor cen­tres, we’re look­ing at 4G, so the plan has started. By Novem­ber 2014, we’ll be up and run­ning.’

Pric­ing com­pa­ra­ble to Australia

Both said they wanted PNG pric­ing to be sim­i­lar or lower than that in Australia.

‘If you go back to say two, two-and-a-half years when there wasn’t any 3G across the op­er­a­tors, Te­likom and Bemo­bile, data was about two kina (US$0.82) per megabyte,’ said Man­gos.

‘Fast for­ward to now—it’s 10 toea (US$0.04) per megabyte. So, there’s ac­tu­ally a mo­bile par­ity and it’s fallen sig­nif­i­cantly in the last two-and-a-half years. I think we’re see­ing in the cor­po­rate end and down at the SME (small and medium-sized busi­ness) end, you’re see­ing prices ac­tu­ally lower than that again.'

Pa­tel agreed PNG pric­ing is get­ting close to in­ter­na­tional prices.

‘The ul­ti­mate goal re­ally is just to con­cen­trate on keep drop­ping prices, as af­ford­abil­ity is an is­sue in PNG’S re­mote ar­eas. Ide­ally, we’d like to be cheaper than Australia re­ally.'

Limited scope for new play­ers

Both Pa­tel and Man­gos agreed there is limited scope for a fourth player, the re-cap­i­talised Bemo­bile be­ing PNG’S third telco (see box above).

‘PNG is not even four per cent of what the Aus­tralian mar­ket is,’ said Pa­tel. ‘So it’s not a big mar­ket.

‘From my per­spec­tive, for fur­ther com­pe­ti­tion, if we had a cou­ple of telcos in mo­bile, a cou­ple in fixed line, that should re­ally bring the prices down and give the ser­vice to the peo­ple.’

Man­gos pre­dicted the high cost of pro­vid­ing ac­cess would be a hin­drance to any new na­tional telco, but the en­trants would be voice, ISP and data providers.

‘For the whole in­dus­try to de­velop, you need to ac­tu­ally get all those value-added ser­vices—isps, call cen­tres, data cen­tres—on top of what we’ve al­ready done,’ Man­gos said.

‘It’s not about con­nect­ing the [re­gional] ar­eas any more, it’s about: once a cus­tomer is con­nected, what do they re­quire on top of that?’

Dig­i­cel PNG’S John Man­gos (left) with Te­likom PNG Chair­man Ma­hesh Pa­tel, in con­ver­sa­tion at the Septem­ber 2013 Pa­pua New Guinea Ad­van­tage in­ter­na­tional in­vest­ment sum­mit in Port Moresby

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