Telecommunications

Digicel has invested heavily in PNG and the rewards are there.

When Digicel founder Denis O’brien first visited Papua New Guinea, he says he was ‘quite taken’ by the country. He says Digicel, which has become PNG’S biggest mobile telephony company, has since invested US$850 million (K2.87 billion).

‘ We launched in 2007. It was our most challenging network build because the (electricity) grid does not go everywhere. We have 1100 towers, of which only about 300 are on the grid. We have to fuel our towers and provide fuel with helicopter drops every week. So, from a build point of view, it was the most difficult network that we have done.’

O’brien says he was pleased to find a ‘depth of management ability and capability’ in PNG.

‘There were some first class companies that had spent a lot of money on training management, so we were able to attract management very quickly. The other thing we found is that only about one or two per cent of people had a phone, so there was a real need and an under-served market.’

Digicel delivers 80 per cent coverage of the country, he says, but the challenge is knowing where to build the network and where to focus

FROM A BUILD POINT OF VIEW, IT WAS THE MOST DIFFICULT NETWORK THAT WE HAVE DONE. Denis O’brien

capacity—especially with a population that is on the move.

‘ We used to hire small Cessnas and photograph the countryside because we wanted to know where communities were moving to during the build of the LNG pipeline. It was a way of trying to be accurate and working out where we would actually build that coverage.’

‘There is risk in every country. But I think all the risks you see in Papua New Guinea are very manageable.’

Plans

The Regional Director of Digicel Pacific, Paul Statham, says the company has ‘aggressive’ plans to expand its offerings when the submarine fibre cable from Australia to PNG is built (see opposite). He believes the Coral Seas cable will bring sharply lower prices, pointing to his experience in Kenya, where costs of data fell by almost 99 per cent after a submarine cable was put in.

But he warns that it is only one step. ‘Unless it is distributed across the nation, it is of no real benefit unless you live in Port Moresby— and even then, when internet capacity improves and prices fall, demand just increases and increases. We have very aggressive plans to build out metro fibre across the major towns and conurbations of Papua New Guinea, leveraging our network.’

Speaking at the 2018 Papua New Guinea Investment Conference in Brisbane, Statham said Digicel plans to introduce cloud services, which will reduce IT overhead costs by more than a third, improve flexibility and increase quality. The company is investing around US$10 million (K32.84 m) in hardware that will allow businesses to access cloud services.’

Statham believes PNG has an opportunity ‘to leap the technology curve’ because it does not have some of the ‘legacy infrastructures that more mature economies have had.’ The company has a 92 per cent market share, in retail and business-tobusiness.

‘That market share has really come from the courage and the investment in the towers and the building of the network quicker than anybody else. At least 10 per cent of our towers are only accessible by helicopter. The [rest] tend to be very difficult to get to for a variety of reasons. There are very complex social arrangements, particularly around landlords—but Digicel has done it.’ 

DIGICEL PLANS TO INTRODUCE CLOUD SERVICES, WHICH WILL REDUCE I.T. OVERHEAD COSTS BY MORE THAN A THIRD, IMPROVE FLEXIBILITY AND INCREASE QUALITY. Paul Statham