Subsea cables to Australia and the Solomon Islands to boost PNG internet speeds


Despite a wave of investments and advances in ICT infrastructure, internet speeds in Papua New Guinea are still among the slowest in the Asia-Pacific region. The average download speed is 4.28 Mbps, which compares poorly with 20.9 Mbps in New Zealand and 39.33 Mbps in Australia.

New Infrastructure Needed

In addition to a widely varied landscape that has made infrastructure construction somewhat difficult, these slow speeds are largely due to much of PNG’s internet infrastructure being outdated or underutilised. Currently, the country is reliant on an optical fibre submarine connection that runs from Sydney to Port Moresby, called the APNG-2 cable. It is also highly dependent on the PPC-1 cable, which runs between Sydney and Madang.

Both cables combined provide approximately 2.5 Gbps of capacity to PNG’s population of 8m people. In contrast, Singapore’s population of about 5.5m people is served by 15 submarine cables at three locations, with total bandwidth exceeding 56.1 Tbps. Research from the World Bank estimates the bandwidth demand in PNG will reach more than 450 Gbps by 2040 — an indication of just how much investment in capacity increases will be required.

Coral Sea Cable System

A lack of local government capital has made it challenging for PNG to invest in the necessary infrastructure to bring its internet up to speed, but it has garnered support from its neighbour Australia. In April 2018 Canberra confirmed it would make a significant investment in a telecommunications subsea cable to connect Sydney with PNG’s capital, Port Moresby, and Honiara, the capital of the Solomon Islands.

Known as the Coral Sea Cable System, it is scheduled to go live in late 2019. Australia has committed to providing around two-thirds of the funding for the project, which is expected to cost around AU$200m ($144.2m). The costs will also be covered by financial contributions from the governments of both PNG and the Solomon Islands.

In January 2018 Australia’s Department of Foreign Affairs and Trade (DFAT) entered into a AU$2.8m ($2.04m) agreement with Vocus, laying the groundwork for the Sydney-based firm to scope out the design, construction and procurement of the subsea cable in consultation with the governments of the Pacific nation participants.

In June 2018, Vocus was awarded a separate AU$137m ($99.6m) contract by the DFAT for the construction of the cable, following a commitment of AU$200m ($144.2m) by the Australian government to lock Chinese firm Huawei out of the tender – a sign of the growing struggle between China and Australia for influence in the South Pacific. Vocus said the cable system will use multi-terabit technology.

China-Australia Competition

Canberra appears to have been spurred into action by a July 2017 announcement by Chinese company Huawei, which said it had signed an memorandum of understanding (MoU) with the Solomon Islands to construct a cable from Sydney to Honiara.

The Australian government is reportedly concerned about a Chinese company having access to its cable infrastructure. Since its founding in 2008, China’s Huawei Marine Networks has constructed deep-sea cables across the globe. This has caused concerns on the subject of cybersecurity, with some Western governments worried that Huawei’s channels could be compromised. Huawei has vehemently denied any such claims associated to its activities. At the World Economic Forum in Davos, Switzerland, in 2015, Huawei’s founder and CEO, Ren Zhengfei, said his company had never received requests from the Chinese government to tap into US networks.

Regardless of Huawei’s intentions, Canberra’s offer to fund two-thirds of the project made the Chinese firm’s MoU with the Solomon Islands redundant. In doing so, Australia will believe it has strengthened its geopolitical influence in the region through a relatively modest investment, while PNG and the Solomon Islands will benefit from a project that has the potential to bring both countries significant economic and social benefits.

Widespread Advantages

The cable has been warmly welcomed by the ICT sector, as well as the wider economy. It is not yet clear how much bandwidth the cable will add to the country’s internet capacity, but it is likely to be substantial and contribute to a fall in prices for internet services in a country where rates are among the highest in the Asia Pacific. A 2016 study conducted by the PNG National Research Institute calculated the country’s fixed broadband price as a percentage of gross national income (GNI) per capita at 266%, significantly higher than the Solomon Islands, which was second-highest with 202.1%. In contrast, the price in Fiji stood at 5.2%, and in Australia at 1%.

The current cable infrastructure is also extremely unreliable and could be on the verge of collapse. Many of the rural parts of PNG are reliant on satellite services, which although useful in remote areas, can become obsolete during periods of heavy rain – a relatively common occurrence in PNG.

The new cable is expected to significantly improve internet reliability and connectivity across the country. In turn, this should improve investor confidence as reliable internet connections raise productivity, reduce costs, and open up opportunities in previously marginalised regions. It will also help strengthen economic ties between PNG and Australia, which could make the former a more attractive investment destination for companies from the latter, and potentially generate new employment opportunities in PNG.

LNG Projects

Scott Tipping, the country manager of satellite services provider Speedcast PNG, told OBG that large infrastructure companies had taken an interest in PNG. This has been particularly true for companies in the energy sector, who have been drawn to new liquefied natural gas (LNG) projects being pushed by the PNG government. These companies in particular would benefit from the new cable.

“About four years ago many companies started to come into the market, including large companies involved in the first PNG LNG project,” he said. “These larger companies require significantly higher levels of bandwidth to operate at the standards they are accustomed to abroad, but smaller companies will also benefit as they tap into opportunities to digitise and grow their businesses online.”

Outstanding Issues

Nonetheless concerns have been raised about how Australia’s funding of the project will affect its aid programme, which provides $541m and $137m annually to PNG and the Solomon Islands, respectively. Other questions include who will ultimately own the cable infrastructure, and what measures are being put in place to ensure that it is the consumers – and not only the contractors, internet service providers and PNG government – who benefit from the investment.

With questions about the feasibility of rural infrastructure also remaining, Tipping suggested that satellite technologies could come into play for boosting connectivity in remote areas. “Its not always feasible to have an extensive ICT infrastructure in a sparsely populated area or in one characterised by rough terrain,” he told OBG. “PNG is therefore a perfect candidate for satellite connections.”

The country’s ICT sector contributed an estimated PGK1.28bn ($400m) to the economy in 2017, and forecasts say that the figure could reach $2.5bn by 2040. As the global industrial landscape becomes increasingly digitised, better ICT infrastructure should stand PNG in good stead to benefit from further technological advancements going forward.


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The Report: Papua New Guinea 2018

ICT chapter from The Report: Papua New Guinea 2018

Cover of The Report: Papua New Guinea 2018

The Report

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