I get this question a lot.
'why is internet connection so expensive in PNG'
The good news is that it's all getting better. The bad news is that it should already have been better.
Here is a really good summary article containing far much more than you ever wanted to know about it... but the summary is... this is GOOD for us!
Internet Growth in PNG Going From Stagnant to Very Exciting
Article by: Charlie Gilichibi, Team Leader IT & Special Projects Coordinator
Bandwidth Capacity Major Stages of Internet Gateway Development in PNG
16 Megabits per second APNG-1 (October 1967) on copper wire intended for telephone communications
560 Megabits per second APNG-2: (October 2006) on optic fibre for telephone and internet communication
10,500 Megabits per second APNG-2 + PIPE (September 2009) and National Broadband Network (work in progress to be completed in 2015) on optic fibre and power lines
Internet Price Comparisions
Internet Service Provider Prepaid Cost / MB Postpaid Cost / MB Cost of Setup or Dongle Purchase Coverage Centers
Daltron 40 toea 56 to 20 toea K400
Data Nets 40 toea 40 to 25 toea 30 centers
Datec 60 to 66 toea 60 to 20 toea
Digicel GSM 33 toea peak hours
25 toea off peak 22 toea peak hours
16 toea off peak hours K99 Port Moresby, Lae, Hagen and Kokopo
Global Internet 61 to 23 toea 61 to 23 toea
Hitron 20 toea K750 – K5920
Telinet CDMA 29 toea 40 to 16 toea
Why is internet expensive in PNG?
It is easy to point fingers at ISPs and blame them for un-affordability of the internet. Then again those pointing the fingers from the business and social space and the civil society at large can’t be blamed for their ignorance on why internet prices are so high compared to the rest of the world.
The basic economic principle of demand and supply is the immediate phenomenon that drives up cost of living including the cost of internet services. In the grand scheme of things and at its most fundamental, it is the lack of visionary leadership at the national and sub-national levels, so not to single out anyone as the problem is an inherited one as well as on-going the reasons are best left to your imagination.
When the internet took its first baby steps in the 1980s and the world was watching and nurturing it, when it developed to be a teenager in the 1990s and went rebellious with the parent world always counselling and guiding it and doing everything right in terms of national policy development and investment in a child in the PNG context that would later provide a welfare net for the parents in old age, leadership in PNG was too bothered in power plays then worried about what would become of the future.
Going back to demand and supply as the invisible hand that sets market prices, Sundar Ramamurthy CEO of Data Nets during an Emerging Technologies Seminar on Tuesday 10th of April 2011 said whilst the current capacity shared amongst the ISPs in PNG for internet services is 265 Megabits per second (Mbps), the overall demand is at 285 Mbps far outstripping supply.
PNG Internet Bandwidth Analysis
Current capacity between PNG and the rest of the world shared by ISPs is 265Mbps
Current total demand in Papua New Guinea is 285Mbps
Internet gateway undersupply by 20Mbps
PIPE Capacity into Madang is estimated to deliver extra capacity of 10,000Mbps
PNG’s Total Capacity once PIPE cable (via Madang) comes online is 10,500 Mbps
Source: Sundar Ramamurthy, Emerging Technologies Seminar 10.05.2011, Crowne Plaza
PNG’s National Broadband Network (NBN)
Once the National Broadband Network, currently work in progress is completed and links the PIPE optic fibre cable in Madang (from Guam) to the rest of PNG we can expect the power of the internet to be let loose running wild in the country just like how the nation experienced the explosion of mobile phone sector around 2006 and 2007.
Whilst the government will reserve some chunk of the 10,000 Mbps capacity for other projects of national significance even half of this capacity when divided and rented to each ISP would leave each of them with at least a whopping 265Mbps equivalent to the total capacity currently shared by all the ISPs. Benefits from this development would include:
• streaming of audio and video data (multimedia) that is of telephone quality at around 8Mbps
• CD quality audio compressed in MP3 format at 192 Kbps
• HDTV at 27Mbps – for instance distribution of EMTV via the internet
• Rest of the benefits aside, internet affordability for the masses. ISPs would initially throw in all differentiation gimmicks by packaging internet plans and selling them to existing customers. When they realise they are too big for the markets in the urban centers or when they have developed the winning business strategies to go hunting in the country side they will but eventually take the plunge. As Sundar Ramamurthy said, Papua New Guineans are our own worst enemies. We discount the majority as illiterate and ignore their will for the want of progress and when mobile competition arrived with handsets flooding even to those areas considered as the most disadvantaged by lack of access to reasonable education, the country was awestruck by the rapid proliferation of mobile devices even those with the best educated pessimism that the high illiteracy rate is an obstacle.
APNG1 & APNG2
Until recently (in early 2000s), connectivity to the rest of the world was via the 897Km long Australia-PNG (APNG) cable, a copper coaxial analogue telephone cable laid between Cairns and Port Moresby in 1967, and by Intelsat Earth stations at Port Moresby and Lae.
Telikom retired the legacy APNG (APNG-1) coaxial copper cable of 16 Mbit/s in 2006 replacing it with the 1800Km APNG-2 optic fibre cable that used to link Sydney to Guam redeploying it between Sydney and Port Moresby at an estimated cost of US$11 million. This was a wise decision by Telikom because a new 2nd generation optic fibre cable would cost an estimated US$60 million. Why the advanced countries were selling off these cables was because they have surplus 2nd generation optic fibre cable capacity to cater for their growing market demands for internet and voice communications.
The APNG2 cable has a capacity of 560 Megabits/second (Mbps). While 560 Mbps this is a lot of internet capacity compared to the 16Megabits/second prior to 2006 it still wasn’t enough as only roughly 270Mbps is shared amongst the ISPs for internet purposes whilst the rest is used by Telikom for voice communication purposes as that required a lot of capacity for the voice clarity required in telephone conversations. Not withstanding, while the rest of the world moved on to higher capacity cabling between 1980 and 1995 noting the demand placed on these cables, no longer for growth of voice demand alone but the rapid proliferation of the internet stripping constrained capacity from these telephone cables. This resulted in the 16Mbps capacity of APNG-1 between Cairns and Port Moresby originally intended for telephone communications stripping telephone communications capacity to be shared with internet communications in the 1990s.
This explains why when the internet first hit PNG in dribs and drabs in the early 1990s, cost was way out of reach even for small to medium enterprises and the word “internet” and its wonder world of benefits was only a word shared by the technology savy in the offices, streets and homes around the country.
The APNG-2 optic fibre cable has a serviceable life of 15 years since its commissioning in October 2006 and will be retired in or around 2021. That’s only 10 years away so where to from here?
Source: http://soft-brain.blogspot.com/2009_03_01_archive.html
It’s in the PIPE-line from Madang
The PIPE optic fibre cable gateway in Madang was commissioned for service in September of 2009 and like the split segment of this cable that was re-aligned linking Sydney to Port Moresby it also has a serviceable lifespan of 15 years.
It was reported in The National and Post Courier of 20.05.2011 that the Governor for Southern Highlands, Anderson Agiru and Peter Graham the Country Manager for ExxonMobil signed off on the construction of the 750km segment of the National Broadband Network Project that will link Port Moresby to Tari and Mendi at a cost of US$70 (K169.5) million. It was also reported that it will take 4 years to link up rest of Papua New Guinea from the date of project implementation sign off (19.05.2011) to the PIPE gateway in Madang. This means critical mass utilisation of the PIPE’s 10,000 Mbps will start around 2015. In that time PNG taxpayers will have accrued a loss in value utilisation of US$24 million (6 years of idle time divided by 15 year lifespan times US$60 million investment in PIPE) let alone the opportunity cost in the 6 years the PIPE Gateway from Madang will have been lying idle since it was commissioned in 2009.
The murky-side of communications development in PNG aside, we can expect and anticipate greater reduction of internet costs where it will eventually become more afforadable for the masses. This will be a result of fierce competition in the ISP sector and pleasing to note this competition process has already started. ISPs are now consolidating and preparing their battle plans for when the National Broadband Network will be unleashed. A good ISP will triumph by adapting to the times and taking advantage of opportunities as they come. A great ISP anticipates openings others don't see and creates possibilities that were not there before for their immediate survival, long-term growth.
Where to from here for Papua New Guinea after the serviceable life of the 1st generation optic fibre cables connecting us to the rest of the world reach end of life?
The answer is no one knows as there is no specific national policy or plan(s) for life after APNG-2 and PIPE optic fibre gateways connecting PNG to the rest of the world.
Generating confidence through the media and other means for the National Broadband Network may be crucial to creating demand and supply in anticipation of broadband services in PNG but so is candor.
References
Pacific Connectivity - HighLevel Consultation-18May07
Chapter 2 – Technical Viability
http://www.unescap.org/LDCCU/Meetings/PacificConnectivity-HighLevelConsultation-18May07-Almaty/VersionFromAlmaty-June07/2_Technical.pdf
Re-use and Re-routing of Retiring Cables (check the website where this article was downloaded)
Jamie Merrett, Remy Laude
http://suboptic.org/App/Uploads/Files/We1.09.pdf
PIPE Pacific Cable
http://en.wikipedia.org/wiki/Pipe_Pacific_Cable
Madang Landing Station
http://www.pipeinternational.com/index.php?option=com_myblog&task=tag&category=Landing+Station+Madang&Itemid=53
PTC09 Submarine Cable
http://manymedia.com/2009/01/ptc09-submarine-cable/
Telikom starts fibre optic plans
http://www.islandsbusiness.com/news/index_dynamic/containerNameToReplace=MiddleMiddle/focusModuleID=130/focusContentID
=23375/tableName=mediaRelease/overideSkinName=newsArticle-full.tpl
APNG2 – Cable System
http://en.wikipedia.org/wiki/APNG-2_(cable_system)
Environment Warrior of Madang and Information Access a David & Goliath Story
http://heatheryoungleslie.wordpress.com/2010/05/24/enviro-warriors-of-madang-and-info-access-a-david-and-goliath-story/
Fibre Optic Network Test Run Lae to Madang on PNG Powers Infrastructure
http://pngengineering.com/index.php?option=com_content&view=article&id=55:fibre-optic-network-test-run-lae-to-madang-on-png-powers-infrastructure&catid=39:communication&Itemid=53
Telikom PNG's View of PPC-1: Madang-Guam (10Gbps)
http://soft-brain.blogspot.com/2009_03_01_archive.html
Digicel launches mobile 3G Broadband
Monday 9th May 2011
www.postcourier.com.pg
US Government Oks PIPEs Submarine Cable to Land in Guam
http://www.itwire.com/business-it-news/networking/20669-us-govt-oks-pipes-submarine-cable-to-land-in-guam
