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January 27, 2021
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Papua New Guinea’s broadband network ‘on track’, but there will be challenges, says analyst

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The rollout of PNG’s National Transmission Network is on track for completion later this year. It will transform the nation’s digital highway, but that does not mean there will not be challenges, telecommunications analyst Henry Lancaster tells Business Advantage PNG.

The creation of Papua New Guinea’s K685 million (US$313 million) National Transmission Network (NTN) aims to provide fast and reliable broadband to the country’s major population centres by connecting them to the international gateway in Madang on PNG’s northern coast.

This gateway connects the country to the worldwide web via the PPC-1 undersea cable, which passes through the Bismarck Sea.

The NTN is being built using ExxonMobil’s data link between the Southern Highlands and its PNG LNG plant northeast of Port Moresby, with an added connection to Port Moresby. An additional link will connect Yonki, outside Lae, to Mt Hagen and Mendi in the Southern Highlands, thereby completing the circle.

Network

A network of microwave transmitters will extend the reach of the NTN to smaller centres such as Vanimo, Wewak and the New Guinea Islands. Ultimately, there are plans to roll out more fibre optic cable to Daru in Western Province, Alotau in Milne Bay and across the Bismarck Sea to Rabaul (East New Britain).

BuddeComm's Henry Lancaster

BuddeComm’s Henry Lancaster

‘The project has been kept to schedule,’ Sydney-based analyst Henry Lancaster of Paul Budde Communications tells Business Advantage PNG.

‘Those involved, such as Huawei, have considerable experience in this type of undertaking.

PNG’s internet usage between 2011 and 2014 more than tripled.

‘Because of the unique terrain, though, there has had to be additional work, including the provision of satellite connectivity. However, the government-owned satellite is not expected to be launched until 2018’.

New opportunities

The completion of the NTN will undoubtedly act as the catalyst for internet usage in PNG.

There have already been signs in recent years of a sharp increase. According to a report by Deloitte, internet usage between 2011 and 2014 more than tripled from less than 3 per 100 people to almost 10 per 100 people. That usage level is set to rise further with the establishment of the NTN.

PNG's internet usage. Source: Deloitte Touche Tohmatsu

PNG’s internet usage. Source: Deloitte Touche Tohmatsu

Price of the internet will be an issue, however. According to the World Economic Forum (WEF) internet take-up grows most rapidly when the retail price falls below 5 per cent of average weekly income.

‘Low disposable income already serves as a break to internet adoption, with the cost of services as the principal inhibitor,’ says Lancaster.

‘Internet access is still extremely expensive in PNG, and far beyond the means of most of the population, even though since 2015 Telikom Wholesale has reduced its prices.’

e-commerce

Business participation has a large potential upside, given that it is coming from a low base.

Copper for the last mile is still dominant in urban and semi-urban areas, while rural areas are being furnished with satellite connectivity.

In prospect is a significant change in e-commerce practices. Lancaster says the main e-commerce channels, such as PCs and smartphones, have ‘low adoption rates’ at present.

‘There is not yet the social/business recognition of e-commerce as a normal commercial undertaking,’ he adds.

Mobile coverage

Lancaster says the NTN will provide a boost to mobile coverage and mobile usage.

‘Last month the regulator issued a tender for the provision of additional 3G services across all regions.’

‘In most rural areas, only 2G services are available. Nevertheless, mobile broadband is proving far more successful than fixed-line broadband, having reached an estimated 6 per cent penetration.

‘The number of mobile broadband users is expected to grow as Digicel continues to expand its 3G and 4G networks.

‘In addition, last month the regulator issued a tender for the provision of additional 3G services across all regions, and this should go some way to improving connectivity in rural areas in coming years.’

Copper

Lancaster believes the dynamics of the market mean that copper for the last mile is still dominant in urban and semi-urban areas, while rural areas are being furnished with satellite connectivity.

‘Fibre-to-the-Premises (FttP) is not considered viable in this market other than in isolated pockets.’

‘The older radio links which serve these communities have their own difficulties, not least of which are the high reparation demands made by the owners of land where the repeater stations are located.

‘This has added a tremendous cost to what was already incurred, due to difficult topography—it is an expensive undertaking.

‘What this all means is that Fibre-to-the-Premises (FttP) is not considered viable in this market other than in isolated pockets.’

Copyright © 2016 Business Advantage International.

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