The National, Thursday July 26th, 2012
AFTER almost two years of delay, Port Moresby is preparing for its imminent connection to Papua New Guinea’s 10 gigabyte per second (gbps) fibre-optic gateway in Madang.
Connected via a 750km cable that will piggyback the ExxonMobil liquefied natural gas (LNG) pipeline, the new connection is expected to drastically reduce internet rates, thus serving as a catalyst for wholesale market change across the telecommunications sector.
Following liberalisation calibrations introduced in 2007 and enforced by the National Information and Communication Technology Authority (Nicta) since 2010, the telecommunications industry in PNG has been thriving.
Mobile phone subscriptions rapidly increased from 100,000 in 2006 to 1.9 million in 2010.
In the same period, secure internet servers increased 12-fold to 48 last year.
However, PNG’s international gateways have long been the industry’s Achilles heel that has frustrated efforts to roll out affordable web-enabled mobile and ICT services nationwide.
Until this year, the country has been largely reliant on the APNG-2 submarine cable connecting Port Moresby’s digital exchange in Boroko with Cairns, Australia.
Just 48% of the APNG-2 undersea cable is actually working and the remainder is at 99% capacity.
While PNG was wired into the fibre-optic Pipe Pacific Cable 1, a 6,900km connection that runs between Sydney and Guam, in October 2010, no provisions were made to connect the Madang gateway to the rest of the country.
Only in January last year did the government grant the Independent Public Business Corporation, an independent entity that holds the majority of state-owned commercial assets including 14.9% of the PNG LNG project, funding to purchase a US$35 million, 41.67% share in a fibre-optic cable connecting Madang to Port Moresby.
Some 20 months later, the country’s ICT sector is now braced for change.
All of PNG’s large internet service providers (ISPs) are looking for alternatives to the APNG-2 cable, and once the Madang fibre-optic cable comes online, a migration of customers away from state-owned enterprise Telikom PNG (Telikom) is widely expected.
Ahead of the cable coming online, PNG’s local ICT players have worked to consolidate their market positions.
Mobile service provider Digicel PNG and long-term local ISP Daltron are expected to lead the charge.
Digicel was awarded an international gateway licence in July last year, which has enabled it to roll out high-speed 3G internet nationwide.
Meanwhile, Nicta will rule on Daltron’s application next month.
Industry confidence is running high following Nicta’s adoption of an open licence regime in 2010, which allows providers to migrate their licences and offers a greater variety of services.
NICTA also awarded a flurry of licences to a number of telecoms operators in July 2011, which has encouraged companies to diversify their business models.
It is anticipated that the largest future growth vectors will be in corporate services.
Acquisitions by Digicel in 2011 of local ISP provider DataNets, which has a network incorporating 30 towns outside PNG’s main urban areas, and its subsidiary NEC PNG, have bolstered its means to begin building wired infrastructure and capacity.
This opens up the market for consumers to alternative services, as well as markets beyond PNG’s principal urban centres.
While key population centres will certainly benefit from the fibre-optic cable’s completion, ahead of tributary cables planned for 10 national development corridors outlined in PNG’s 2030 Development Strategic Plan, the fibre-optic cable’s widespread application is still restricted. Many of the cable’s direct paths will remain reliant on VSAT capabilities, which are two-way satellite ground stations with ICT capabilities, until the tributary cables can be laid.
The current practical limitations of the cable contributed to Telikom’s decision last month to upgrade its Ku-Band Broadband ViaSat system to optimise bandwidth usage.
The hub upgrade will provide more applications and services, reducing downstream bandwidth requirements by up to 63% and up to 18% for uploading, Telikom’s head of programme management, James Banduru, told local media last month.
The forthcoming cable means that PNG’s mobile service providers stand to take advantage of cheaper gateway rates, passing the savings onto its customers.