Increased investments in ICT infrastructure are set to improve PNG’s internet capacity, extending coverage across the country and paving the way to roll out 4G LTE services. With low fixed-line internet and telephone penetration rates in 2015 – at 9.4% and 1.9%, respectively – connectivity in PNG is mainly being driven by mobile phone ownership, with penetration rates standing at 49% earlier in 2016. However, despite mobile service coverage of 80% as of early 2016, some services are limited due to slower operating speeds, with many rural regions only having access to 2G.
In a bid to increase coverage and penetration rates, two of PNG’s telecommunications service providers, Telekom PNG and Digicel, aim to begin offering LTE services by the end of 2016. In mid-March 2016 fixed-line operator Telikom PNG announced plans to spend some PK400m ($126.4m) on broadening its network infrastructure. Much of this investment will be directed towards installing hard infrastructure required for advanced wireless connectivity, according to Michael Donnelly, CEO of Telikom. “The company is expecting to roll out a 4G network by the end of 2016, with some 256 LTE-compatible base stations scheduled for deployment in major towns in PNG,” he told local media earlier in 2016.
Telikom PNG’s investment is expected to enable the company to meet consumer demands, as well as provide a higher-quality internet and communications network for end users. Meanwhile, international telecommunications provider Digicel is also stepping up infrastructure investments to expand coverage and connection speeds. At the end of May 2016 Digicel said it would broaden its 3G coverage to at least 80% of the population by 2020 and expand mobile penetration to 60% of the accessible client base as part of its commitment to bring digital communications and data services to PNG’s remote areas. These significant investments in infrastructure and service provision will build on the $800m Digicel has already put into the PNG market.
Both companies are hoping that take-up of new services will rise sharply, as infrastructure installation in PNG is expensive due to difficult terrain, with much of the population living outside the country’s urban centres. For its part, Digicel is also planning to support the use of solar power for the purposes of recharging where access to electricity is otherwise limited, according to Michael Murphy, CEO of Digicel Asia-Pacific.
Further Challenges Afield
A recent study commissioned by PNG’s National Research Institute (NRI) and conducted by Deloitte Access Economics revealed that many citizens were unable to afford internet subscriptions, a factor contributing to the country’s relatively low penetration rates.
Frequent outages in internet connectivity have also stoked concerns over the reliability of access for both citizens and the business community. To boost penetration rates, the report – which was presented to industry stakeholders at the NRI in late April 2016 – suggested that service providers could reduce their subscription fees while adopting a more holistic approach to develop the sector. According to the study, this would include strengthening the industry’s regulatory framework, reviewing current wholesale and retail policies with a view to increasing market competition, and assessing the state’s role in the telecommunications sector.
To this end, in May 2016 Jim Miringtoro, minister for communication and information technology, announced PNG’s plan to set up an internet exchange point (IEP) to reduce end-user costs and boost services. The IEP facility will enable different networks to exchange internet traffic via shared switching infrastructure, routing domestic and regional internet traffic locally, rather than through overseas networks. In 2014 the government also set up PNG DataCo – a wholesale telecoms company providing infrastructure and services to retailers – which aims to link the country by fibre-optic and reduce end-user costs by facilitating greater competition in the sector.