Mobile broadband jumps ahead of fixed-line services in PNG

According to the International Telecommunication Union, only 6.5% of Papua New Guinea’s population uses the internet, with those accessing internet services via a fixed-line connection standing at just 1%. One of the factors behind low penetration has been a lack of network availability outside of the main cities, where around 80% of the population resides.

A more prohibitive factor has been high subscription and data costs for relatively poor speeds and network quality, with the National Information and Communication Technology Authority (NICTA) reporting that wireless broadband costs between 20% and 80% of the average citizen’s monthly income, while a fixed-line service equates to an even greater 150%, proportional expenses that are far and above the 5% global affordability norm.

According to a January 2014 Economist Intelligence Unit study that further illustrates how internet prices are out of reach for the average consumer, a 20-GB-per-month unlimited broadband plan in the capital city of Port Moresby can cost in excess of $3000, which is nearly 200 times the amount that a similar plan would cost in Australia. A more basic fixed-line package with tighter data limits would still set a PNG resident back around $200 a month, which is far in excess of the PGK20 ($7.60) that would equate to roughly 5% of the average consumer’s monthly income.

Wholesale Changes

As part of its mandate to induce lower internet rates, NICTA is introducing structural reforms, most notably by changing the method by which wholesale bandwidth is sold onto internet service providers (ISPs).

State-owned Telikom PNG has historically owned and controlled access to the National Transmission Network as well as the main international gateway to Australia (a second gateway to Guam is now available). Therefore, short of building their own networks, which in an island nation such as PNG with a scattered population and rugged terrain is a costly and challenging endeavour, ISPs were in turn required to connect through parastatal means.

The government deemed the bandwidth lease rates that Telikom was charging ISPs and network licence holders to be excessive, and in 2013 a decision was made to divest all of its wholesale assets from Telikom and transfer them under the auspices of a newly created independent entity, PNG DataCo.

“The rationale behind our establishment was threefold,” Paul Komboi, the managing director of Data-Co told OBG. “First, the government realised that the service offering was inefficient, unreliable and suffered from legacy issues, and wanted to introduce new management and a more private sector mentality. Second, the prevailing non-independent market structure did not allow for a truly competitive environment and was susceptible to unfair price discrimination. And third, there was a need to consolidate all national broadband infrastructure in addition to those assets held by Telikom, such as fibre-optic connections owned by PNG Power, under one government department to maximise productivity and reduce duplication costs.”

According to Komboi, it is likely to take some time until all wholesale assets are transferred over to DataCo’s custody, and there is at present no fixed schedule set. In all likelihood, the management of the international gateways is set to be taken over first, followed by domestic fibre links and eventually the other backhaul assets such as microwave and satellite. “So far, things are not moving as fast as expected and government shareholders are not driving this forward enough,” Komboi told OBG.

Exchange & Share

According to NICTA, there are nearly 50 licensed operators and ISPs registered within PNG, and the authority is looking to establish the PNG Internet Exchange Point as an additional means of reducing costs and promoting efficiency. Once up and running, the exchange facility should allow all networks to interconnect directly, in turn reducing the amount of traffic that would need to leave the country in order to reach a third-party network before reconnecting with a local network.

“We believe that at least 50% of all traffic should be interconnected domestically, and this would go a long way towards reducing costs,” Komboi said.

Together with NICTA reforms to impose more infrastructure sharing and shared facilities between operators (see overview), another way of ensuring that local traffic does not have to be diverted to an exchange point outside the country is to mandate IP peering. Peering is when two networks exchange traffic with each other freely, leading to faster connections and better quality for end users.


To date, most observers believe that the separation of Telikom’s wholesale and retail business has had minimal impact on consumer internet prices, believing that the most effective way of attacking the problem is through further interventions to promote greater competition to reduce the dominance enjoyed by the primary fixed and mobile players. PNG’s telecommunications sector, which was static for decades, progressed leaps and bounds when, in 2007, Digicel entered the market as a second mobile operator. It is estimated that between 2006 and 2014, mobile penetration expanded from reaching 1.6% to more than 40% of the population.

In June 2014, news came of the prospect for a third mobile operator entering the market, following the awarding of a 10-year mobile operator licence to Dubai-based AWAL Telecom for $260m. However, it remains to be seen when and how the Emirati firm will officially launch its services, and to what extent and level of aggression it intends to directly challenge the two incumbents for market share.

Next Generation

Irrespective of AWAL’s future plans as a competing wireless brand, as is the case in many parts of the developing world, it appears that fixed-line broadband penetration in PNG, which stands at just 1%, is being leapfrogged by mobile broadband, which has an estimated 9% penetration. The volume of mobile users is only set to increase as the two existing operators roll out their 3G and 4G networks. Indeed, high-speed mobile connections are seen as the future of PNG's telecommunications sector, and both Telikom and Digicel are looking to expand their coverage.

Telikom has opted to cease investments in its CDMA subsidiary Citifon, opting instead to transition the carrier to 4G. Along with bmobile (formerly known as BeMobile), its main mobile arm, it is jointly rolling out a $100m 3G/4G mobile phone network that is expected to go live in 2015 in Port Moresby and expand throughout the rest of the country.

Digicel, for its part, was the first company to market with long-term evolution (LTE) technology, having switched on 10 sites in March 2014, eight of them in the capital’s central business district. The service is being made available to post-pay customers first and will eventually be made available to its pre-pay segment too through a new LTE SIM card that can also be inserted into a router or mobile WiFi hotspot device. Following the initial trials, the plan is to roll out the service to 50 more sites throughout the country over time.

What the Future Holds

According to the World Bank, nearly half of PNG’s population is under the age of 25, a youthful composition that bodes well for the future uptake of mobile broadband internet. Younger consumers are quicker adopters of next-generation technology, and they are more prone to download apps and access social media sites such as Facebook that are dependent on higher bandwidth and consume more data.

Assuming that costs can be brought down or at least reined in, and services and reliability can be improved through regulatory reforms and competitive dynamics as the entry-level price for smartphones comes down, accessing the internet via one’s mobile phone could eventually become as ubiquitous in PNG as it is in most of the developed world.


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The Report: Papua New Guinea 2015

ICT chapter from The Report: Papua New Guinea 2015

The Report: Papua New Guinea 2015

The Report

This article is from the ICT chapter of The Report: Papua New Guinea 2015. Explore other chapters from this report.

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