Thermal power station launched this week, PNG DataCo and Telikom share fibre optics, Mainland Holdings expands wheat production. Your weekly digest of the latest business news.

PNG Power’s Acting CEO Alex Oa says the new 30-megawatt thermal power station at Munum just outside Lae city in Morobe Province is expected to be commissioned this week. PPL is confident the plant would be available for commercial operations by the end of the month. Munum would act as a back-up station to Ramu and would cater for about three-quarters of Lae city’s requirements.

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PNG Power’s Alex Oa. Credit: The National

PNG DataCo and Telikom PNG will share infrastructure to deliver telecommunication services. Telikom PNG Acting CEO, Xavier Victor, told The National a new agreement means that both parties will make available domestic and international cable capacity to each other. DataCo will provide fibre cable capacity to Telikom between Madang and Port Moresby via Lae, Goroka, Mt Hagen and Hides. Telikom will provide DataCo capacity on its cable between Madang and Sydney. However, the Independent Consumer and Competition Commission reportedly says the arrangement may raise competition issues.

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An earthquake measuring 5.5 on the Richter scale which occurred 80km from Madang may have led to a cut in the Pipe Pacific Cable 1 (PPC-1), reports The Post Courier. The cable provides Telikom PNG’s second international gateway connecting Madang to Guam and Sydney.

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Mainland Holding’s plans to increase its acreage of wheat product sorghum from six hectares to more than 1500 hectares as it diversifies its business activities. Poultry manager Chris Prestwood told The Post Courier the company would be using the grain at its 7-Mile feed mill just outside Lae to manufacture stock feed. The current six hectares will harvest 300 tonnes this year at its Sasiang farm in Markham District.

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The cost of the Papua LNG project may come down now that ExxonMobil PNG, following its acquisition of InterOil, is coming on board, says Managing Director Andrew Barry.  ‘We think that with us coming in, the project will be done quicker, cheaper and more effectively and efficiently which ultimately will benefit the government, communities and the country,’ he told The National, adding Total remains the operator of the project.

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Four coffee industry officers have passed an international cupping examination process to become certified Arabica coffee graders (Q-graders) in Papua New Guinea. They now join the five Q-graders in the country.

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Sharlene Gawi with bilum. Credit: EMTV

The Bilum Export and Promotion Authority wants to see the bilum replacing plastic bags for shopping purposes. BEPA Executive Officer Sharlene Gawi told The National that following the Government’s proposal in 2015 to ban plastic bags in shops, the only issue now would be the cost of bilum compared to the plastic bag.

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The Investment Promotion Authority will waive penalty fees to reinstate companies in the Autonomous Region of Bougainville which were deregistered as a result of the Bougainville Crisis. They were deregistered by IPA due to their failure to file company annual returns.

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The World Bank has approved a credit of US$15 million (K48 million) to help combat PNG’s growing tuberculosis epidemic. The Australian government is matching that amount also. International stakeholders continue to wait for a government commitment to inject K50 million to fight TB hotspots in the National Capital District, Gulf Province and Western Province.

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Indonesia is expected to become a net importer of LNG by 2022 amid increasing domestic demand and declining output at mature gas fields, data from Fitch Group’s BMI Research shows. It estimates Indonesia’s gas demand will grow at an average annual rate of 4 per cent over the next decade, with the biggest demand coming from the power generation sector.

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Expedition member Thomson with a large tree in the PNG study area. Credit: Dr Michelle Venter

And finally, a survey of PNG’s lush primary forests from the coast to clouds in Morobe Province has revealed the high mountain tops may house the largest trees recorded globally at such extreme altitudes. Canadian Dr Michelle Venter, with the help of more than 70 local field assistants recorded trees growing 30-40 metres at altitudes of 2400-3100 metres, altitudes where forests struggle to reach more than 15 metres tall in other parts of the world.

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The Coral Seas Cable System—the undersea fibreoptic cable to be laid between Sydney and Port Moresby, and then to the Solomon Islands—will transform telecommunications in the two Pacific countries. Here we answer 10 key questions about this keenly anticipated project.

Map of the proposed undersea telecommunications cable. Source: Vocus

1. What is the state of the current cable between PNG and Australia? Cables generally have a life span of 25 years. The current connection is coming to the end of its useful life and has very limited capacity. It would not be able to meet the demand predicted for the next 25 years.
2. When will the new cable be up and running? The 40 Tbps (terabits per second) cable system (nickname: CS²) is expected to be finished and operational by December 2019. The cable will have four fibre pairs, about the width of a human hair each. 20 Tbps capacity will go to PNG, and 20 Tbps will go to Solomon Islands.
3. What is the cost? It has been valued at A$136 million (K324 million).
4. How will it change capacity? The cable has a technical maximum capacity of 10 terabytes per second, which is about 1000 times current capacity.
5. What are the stages of construction? A marine survey will define the precise route that the cable will traverse. Terrestrial construction activities will take place, including building the cable landing stations in order to connect it to domestic infrastructure in PNG and the Solomons. The cable itself will be manufactured in Calais, France, then shipped and installed towards the end of 2019. The installation in PNG will only occur in the last three months of the project.
6. Where will it be connected to Papua New Guinea? The landing site will be Kila Kila in Port Moresby. The undersea cable will be dragged up to the shore and then connected to a cable station that will be built on top of the cliff. The land is currently owned by the Royal PNG Constabulary.
7. Which organisations will be involved? State-owned PNG DataCo and its parent, Kumul Telikom, will be involved on the PNG side. Vocus Group has been selected to manage the delivery. The work to build and lay the cable has been subcontracted to Alcatel-Lucent Submarine Networks, while Telstra will provide the facility on the Australian mainland. Vocus has form: it built a 2100 km cable to connect Darwin to Port Hedland, and is working on a 4600 km cable to connect Perth with Jakarta and Singapore.
8. What are the funding arrangements? It is majority-funded by the Australian Government: on a two-thirds, one-third basis. The funding only applies from the Sydney hub to Port Moresby and the connection to the Solomon Islands. It does not include the cost of the on-shore network in PNG.
9. Who will own it? The revenue that is generated through the cable system will be 100 per cent owned by PNG and the Solomon Islands. They will own, independently and separately, the right to the data that is generated through the cable.
10. What organisation will manage it? A Special Purpose Vehicle will be created to manage and maintain the cable. It will be an Australian-registered company, with a board of directors, and will have a telecommunications licence to operate in Australia. There will be three shareholders, one from each country.

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Data centres are gobbling up the world’s electricity, mine dumps to come clean, and growing interest in traceability. Readings from around the world on business, leadership and management.

PNG DataCo’s workers building the Kumul Cable System. Credit: DataCo

PNG DataCo is not just building a domestic cable network but is also building two data centres, one in Port Moresby and one in Madang, to enable the delivery of cloud services (everything from Microsoft Exchange to Google Docs and Oracle Cloud).

Waste from the mining industry

Proposed Sepik Development Project. Credit: PanAust

Over 600 resource companies have been asked by the Investor Mining & Tailings Safety Initiative to reveal the safety records of their waste storage facilities, following the collapse of Vale’s Brumadinho dam in Brazil in January, which killed hundreds.

The initiative is backed by a group of 96 institutional investors who represent more than US$10.3 trillion assets under management. Letters have been sent to 683 extractive companies seeking greater disclosure on the management of tailings storage facilities. ‘To enable proper engagement on tailings dam management we need to assess the risks and the current state of tailings dam facilities that individual mining companies are associated with and/or have responsibility for, whether under construction, operation or retired/decommissioned,’ it says.

Meanwhile, PanAust has released a statement about its ‘nation-building development pathway’ for the Frieda River project (renamed the Sepik Development Project) in West Sepik province. It says the company will ‘permanently store mine waste rock and process tailings under a deep water cover within the hydroelectric reservoir to protect the downstream environment.’

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Growing interest in traceability

Women selling watermelons at the 40-mile market near Chivasing in Markham Valley, Morobe. Credit: The National

Agribusiness will increasingly have to provide traceability for its products according to WorldAgNetwork.com. Traceability means that, if a product has a problem, it is possible to know where it came from and if any other of the products produced at the same time may have been contaminated.

There is also a marketing element: being able to demonstrate there is a quality system for tracing products encourages trust in consumers. The demand for product that is proven to be safe and wholesome is especially intense in Europe, but there is growing interest in America. According to WorldAgNetwork.com, traceability applies to transport, storage, distribution and temperature. It can be broken down into two primary components:

• Creating a complete and transparent record of a product’s history, from production on the farm or capture at sea, to combination with other foods and preparation, to warehousing.
• Completing that tracking with a full and accurate record of where the product goes and under what circumstances, after leaving the manufacturing plant—subsequent transportation, temporary storage, and arrival at a restaurant or retailer and ultimately to the consumer.

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Santos to become a stakeholder in the P’nyang natural gas field project, an agreement between five telecom companies seeks to advance digitisation in Papua New Guinea, and upgrades to the Muliama–to–Bakok road due to commence soon. Your weekly digest of business news.

Independent oil and gas producer Santos. Credit: Santos

Santos Limited has announced that the company has signed a binding letter of intent to acquire a 14.3% stake in the P’nyang natural field gas. Santos will pay US$187million (K631 million) for the purchase, which is expected at the end of June.

‘The arrangements we announce today mark an important step towards the proposed expansion at the PNG LNG plant via a 2.7 mtpa third LNG train fed by existing Project resources and P’nyang,’ aid Kevin Gallagher, Santos Managing Director and Chief Executive Officer in a statement. (Santos)

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City Pharmacy Limited (CPL) has reported a pretax profit of K8.8 million for 2018. Graham Dunlop, outgoing Chairman of CPL, said in his annual statement that the group saw a ‘substantial improvement in trading’ during the second half of 2018. (Post Courier)

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Representatives of Huawei, the National Information Technology Authority (NICTA), Kumul Telikom Holdings, Digitec and PNG DataCo have signed an agreement that commits all the parties to ‘advance digitisation intelligence’ in PNG.

The five companies are also the foundation members of an alliance that seeks to work together to address challenges in the sector. NICTA’S CEO, Charles Punaha, said: ‘It makes a commitment on behalf of all of us that we acknowledge what the issues are and we make a commitment to work together to address it and the challenges that we have in the sector. (Post Courier)

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Local road construction company Tasukolak Ltd has signed a contract with the New Ireland Provincial Government to upgrade the Muliama–to–Bakok road on the East Coast. The contract is for six months. Work is due to commence on May 20. (Post Courier)

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After a 7.2-magnitude earthquake on May 9 that damaged nodes of terrestrial and subsea transmission between Port Moresby and Madang, PNG DataCo reported last week that mobile networks and broadband internet access for its customers had been successfully restored. (The National)

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Oil Search Chairman, Rick Lee, reportedly said that the final gas agreement for the Papua LNG Project was ‘fair to all parties’. Lee explained that it also ‘ensured a strong and reliable income stream to the Government, provinces and landowners’. (The National)

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Ramu NiCo Management and Raibus Security Services Ltd have signed a K20 million business contract for three years. (Post Courier)

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Last week, Prime Minister Peter O’Neill announced that the cabinet will review social media in PNG to ‘crack down’ on fake news and information.

‘Cabinet will have a complete review of social media in the country, led by Minister for Communications.

‘I want to assure you that the Communications Minister’s first responsibility will be to review that so that we can make sure that the correct information and the truth are put forward to the nation so that they can be well informed on what is happening in the country.’ (Post Courier)

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The new Ambassador of Indonesia to PNG, Andriana Sutandy, met with Prime Minister O’Neill last week. During the meeting, O’Neill said that the relation between both nations has strengthened over the years.

‘Our relationship has matured with increased bilateral cooperation, new business activities, people-to-people engagement. Sharing a land border with Indonesia give substantial potential for trade as well as cooperation in working together on international issues that are of mutual interest.’ (Post Courier)

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It’s been announced that Speedcast International is now providing the Western Highlands Provincial Health Authority with a custom private C-band Very Small Aperture Terminal (VSAT) network to have access to a more reliable and cost-effective internet connectivity for regional and provincial hospitals. (Satellite Today)

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Video of the week

This year, Oil Search is celebrating 90 years in Papua New Guinea. This new commemoratory video highlights its exploration history and development efforts.

The post In Brief: Santos announces plan to buy into P’nyang natural field gas in Papua New Guinea and other business stories appeared first on Business Advantage PNG.

Papua New Guinea’s new Prime Minister announces his cabinet, PNG Air Limited enters into a code-sharing agreement with Virgin Australia, and Australia commits to helping the Solomon Islands develop infrastructure. Your weekly digest of business news.

Prime Minister James Marape announced the names of the 33 ministers that constitute his cabinet. They were sworn in at Parliament House on 6 June.

Fourteen ministers served in O’Neill-Abel government too but only four of them (Minister for Public Service Westly Nukundj; Minister for Commerce and Industry Wera Mori; Minister for Immigration and Border Security Minister Petrus Thomas, and Minister for Tourism, Arts and Culture Emil Tammur) occupy the same role.

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The Independent Consumer and Competition Commission (ICCC) has granted authorisation to PNG Air Limited to enter a code-share agreement with Virgin Australia for services between Brisbane, Queensland, and Port Moresby. (Post Courier)

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During his visit to Honiara, Australia’s Prime Minister, Scott Morrison, pledged AU$250 million (K585 million) to help the Solomon Islands develop infrastructure. (ABC)

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Aust & Hachmann (Canada), a company that imports, stocks and distributes vanilla products across North America, Japan, China, Brazil, Australia and Israel, has published a new vanilla market update. The document suggests that Papua New Guinea will produce about 150 to 200mt of vanilla beans in 2019. It also highlights the fact that Papuan growers will have to improve their quality standards if they want to ‘secure a long-term foothold in both the industrial and food service sectors.’ (Post Courier)

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The Highlands Highway has so many potholes that damage to trucks, trailers and heavy equipment is frequent and expensive. The extensive damage to the highway is forcing companies to open workshops in Mt Hagen rather than just Lae. Mapai Transport is one of the companies that has opened a workshop in Mt Hagen. ‘Whether you are driving an old or new truck along the Highlands highway, the probability of trucks falling victims to the effects of the deteriorating highway in unavoidable,’ explained Luke Konge of Mapai Transport Mt Hagen. (Post Courier)

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Peter Botten, Oil Search’s Managing Director, reportedly said during a conference at the Sydney Mining Club that he doesn’t ‘envisage there will be any changes to the Papua LNG agreement.’ Botten also suggested that the P’nyang gas agreement, which still needs to be finalised, could resemble a deal already ‘brokered in the Papua LNG project led by Total’. (Reuters)

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Puma Energy’s General Manager, Hulala Tokome, told the Post Courier that he is optimistic about the barrel price for oil for the year despite pressures on the international market. (Post Courier)

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Crater Gold Mining Limited has announced a new loan agreement for AU$500,000 (K1.2 million). According to the company’s release, the funds will be used ‘to further develop the High Grade Zone (“HGZ”) at the Crater Mountain Project in Papua New Guinea.’ (Crater Gold)

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Prime Minister James Marape has met with representatives of Barrick Gold Corporation and Zijin Mining Group, and has reaffirmed his commitment to working with them and the local communities in Porgera. An application to extend Porgera’s mining lease for another 20 years in under review.

Porgera joint venture owners meet with PNG PM https://t.co/0HCVnWf4lJ pic.twitter.com/UmtafbSSDF

— PNG Latest News/Info (@PngPles) June 5, 2019

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A new partnership agreement between PNG DataCo and the National Broadcasting Corporation (NBC) will involve PNG DataCo leasing 11 NBC sites to install cable landing stations under the Kumul Submarine Cable and provide capacity for 12 sites, including: Alotau, Lae, Madang, Popondetta, Vanimo, Wewak, Kimbe, Kokopo, Manu, Kavieng, Kerema and Goroka. (Post Courier)

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Last week, the government released K20 million to the Bougainville Referendum Commission. (The National)

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Governor Nakikus Konga has revealed his plans to open a coffee factory in East New Britain Province. The factory would be sited at Kabakaul, along the Tokua corridor. (Post Courier)

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After almost 18 months of negotiations, PNG Power’s 2019 Enterprise Agreement was signed last week in Port Moresby. It will benefit over 3000 employers. (Post Courier)

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The Brian Bell Group has stopped using single-use plastic bags and has substituted them with paper bags. Brian Bell is also asking its customers to bring recycled bags, or bilums, when shopping. (EMTV)

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The Papua New Guinea Tourism Promotion Authority has chosen Example, a Sydney-based communications agency, to be its PR company. Example’s focus will be on ‘driving increased visitation from Australia and New Zealand’. (Travel Weekly)

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The Kumul Submarine Cable lands in Bougainville, the Pasca A gas project is on its way to becoming the first offshore field development in PNG and the PNG Tourism Promotion Authority reveals the impact of COVID-19 on the tourism industry. The business news you need to kickstart your week.

The Kumul Submarine Cable lands in Arawa. Credit: PNGDataCo/Linkedin

COVID-19

The PNG Tourism Promotion Authority has conducted a Tourism Industry Business Impact Survey to show the impact that the COVID-19 pandemic has had in the PNG tourism industry. Out of 43 respondents, 95 per cent admitted their business had been affected. According to the survey, K67.91 million have been lost and 1,209 employees have been laid off.(PNG Tourism Promotion Authority)

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MiBank has announced that it will reschedule the repayment of loans for up to three months for borrowers affected by the pandemic. ‘As an industry, we responded to the Government’s call to provide repayment relief for those borrowers genuinely impacted by the COVID-19 on a case by case basis,’ said Tony Westaway, MiBank’s CEO. (The National )

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The state of emergency has disrupted the operations of the agriculture and livestock sectors. For example, Zenag Chickens, one of PNG’s major poultry suppliers, has lost ‘about 50 per cent of its sales,’ reports the Post-Courier. In response, the Ministry of Agriculture and Livestock is working on a rescue plan for the businesses affected by the state of emergency. (Post-Courier)

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Last week, the PNG Chamber of Commerce and Industry (PNGCCI) said that the government has to step up to assist businesses in these difficult times. ‘PNGCCI calls on the national government to address these concerns in the forthcoming supplementary budget,’ said John Leahy, President of the PNGCCI. (Post-Courier)

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Retailer Brian Bell is acknowledging the hard work of frontline workers and has announced a 30 per cent discount on all products. ‘It’s only appropriate we look to help where we can to provide a little reward for all those hard working individuals who have put their lives at risk for the sake of everyone’s health and wellbeing, said CEO Cameron Mackellar. (The National)

Agribusiness

A partnership between the Fresh Produce Development Agency and the Southern Highlands Provincial Government will assist farmers in the Southern Highlands Province to grow and cultivate potatoes. (LOOP PNG)

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With three provinces (Southern Highlands, Enga and Hela) confirming cases of African swine fever and reports indicating the disease is spreading to the Southern Highlands and the Western Highlands, the National Agriculture Quarantine and Inspection Authority is launching awareness campaigns for pig farmers and owners in the areas where the disease has been declared to make sure they know how to deal with the African swine flu and stop the spread. (Post Courier)

Superannuation

NASFUND has opened a new client service centre located in Lakatoi Haus, Waigani. The centre, according to NASFUND’s CEO Ian Tarutia, has opened ahead of schedule given the increased demand in services since the declaration of the state of emergency. (Post-Courier)

Resources

Fuel prices are the lowest they have been in PNG for over a decade, according to Puma Energy’s Hulala Tokome. He said that Puma has ‘not had any issues in terms of fuel supply or stock out issues in country.’ (The National)

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Credit: Twinza Oil

Twinza Oil’s offshore project, the Pasca A gas condensate field in the Gulf of Papua, is on its way to becoming the first offshore field development in PNG.

Prime Minister Marape has said that the National Executive Committee (NEC) has endorsed the submission for the development of the project, and Twinza has welcomed the announcement.

Ian Munro, CEO of Twinza, said: ‘We have been working constructively on the Pasca A development with the Department of Petroleum and Energy and I am delighted that this co-operation has brought us to the point where we are now on the verge of opening the Gulf of Papua to its first production and a new wave of offshore exploration drilling.’ (Twinza)

Telecommunications

The Kumul Submarine Cable landed in the Autonomous Region of Bougainville on 18 May, marking the completion of the Kumul Submarine Cable Network (KSCN) system 1. The cable now connects all New Guinea islands. (LOOP PNG)

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Digicel has discarded its plans to get holders of US$925 million (K3,189 million) of bonds due for repayment in 2023 to ‘take some pain in the group’s debt restructuring plan,’ reports The Irish Times. Fewer than 8 per cent of the bond holders signed up to take part in the deal.

Government

Former Prime Minister Peter O’Neill was arrested on Saturday at Port Moresby’s Jackson International Airport on claims of misappropriation. The allegations are related to the purchase of two 15-megawatt generators from an Israeli company for K50 million. O’Neill was released on bail after police questioning and will be on a 14-day quarantine in his home to comply with COVID-19 regulations. O’Neil reportedly said: ‘I look forward to having my day in court soon so that the truth can prevail and this injustice corrected and exposed.’ (ABC)

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Oil Search back trading on PNGX, new wholesale internet prices coming and ambitious plans for PNG’s cocoa industry. Your latest summary of the business news you need to know.

Prime Minister James Marape officially launches the Coral Sea Cable in Port Moresby in the presence of Australian High Commissioner to PNG Jon Philp, and Minister for Information and Communication Timothy Masiu, Minister for State Enterprises Sasindran Muthuvel and PNG Dataco CEO, Paul Komboi. Credit: PNG Dataco

After the suspension of trading in Oil Search shares on the PNG Stock Exchange (PNGX), the company has obtained an interim injunction to allow for the resumption of trading. The company is now seeking court orders to confirm ‘the validity of the approvals it received from the Executive Chairman of the Securities Commission of Papua New Guinea’ for its recent capital raising in PNG. (Oil Search)

Infrastructure

The 20-terabit capacity Coral Sea Cable (CS2) has been formally launched at Kila Kila Police Barracks in Port Moresby last week. The high speed undersea fibre optic cable, which was co-funded by the Australian, PNG and Solomon Islands governments, cost $480 million (K1.16 billion). (Post Courier)

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PNG DataCo Chief Executive Officer Paul Komboi expects the Kumul Submarine Cable Network (KSCN) to be commissioned next month, following the completion of the last leg between Kerema and Daru. Komboi also said PNG Dataco would launch new wholesale internet pricing at the same time. (The National)

Retail

Retailers should seek approval from the Independent Consumer and Competition Commission (ICCC) before increasing the price of goods during PNG’s state of emergency, suggests ICCC Commissioner Paulus Ain. The ICCC has been monitoring prices of key goods across the country to ensure raises are key below five per cent. (Post Courier)

Agribusiness

PNG Cocoa Board Chief Executive Officer Boto Gaupu says the board would like to see cocoa production ‘increase to 50,000 metric tonnes, and going upwards to 100,000 in the next five years.’ He said PNG has averaged about 40,000 tonnes per annum over the past twenty years but the plan was to grow production by around 12 per cent annually. (The National)

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The Centre for Excellence in Financial Inclusion and the Fresh Produce Development Agency have signed signed a five-year partnership agreement to provide 25,000 farming families training, services and products in Western Highlands, Jiwaka, Chimbu, Eastern Highlands, Morobe and East New Britain. (The National)

Government

PNG’s Government has secured a K1.2 billion soft loan from the International Monetary Fund. The loan has a 0.0% interest rate over 10 years with a 5.5 year grace period and the first principal repayments will start in December 2025.

‘I want to assure the people of this country that this loan will be put to good use in supporting our proven policy based programs,” said Prime Minister Marape.

‘These include support for our COVID-19 response, Connect PNG, Special Economic Zones to promote exports, HELP program, Agriculture and MSME policy, State-Owned Enterprises reforms, and Public Sector reforms.’ (NBC)

Small and medium-size business

Commerce and Industry Minister William Duma has told Parliament that a review was currently in progress on the list of activities that are to be reserved for PNG-owned businesses. The review will also consider additional business support schemes. The SME Corporation Act is to be amended to give the Small and Medium Enterprises Corporation the mandate to regulate the sector, according to its acting Managing Director Petrus Ralda. (The National)

Corruption

The Independent Commission Against Corruption Bill passed its second reading in Parliament last week, moving PNG one step closer to having an independent anti-corruption agency. Health Minister Jelta Wong believes the first commissioner should be ‘from a foreign country so it’s a fair and just system’. (Radio New Zealand)

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With the necessary infrastructure being upgraded and data use rising in Papua New Guinea, businesses should be looking to take advantage of cloud technology, according to Paul Komboi, Chief Executive Officer of PNG DataCo.

The eight reasons why businesses need to move to the cloud.

Cloud technology – computing services delivered over the internet – will ‘redefine digital consumption’ in the country.

Describing it as a ‘key enabler’, PNG Dataco’s Managing Director, Paul Kombo  said the challenge facing PNG is to overcome the ‘digital divide’: to close the gap between those who have access to internet-based services and those who don’t.

PNG Dataco is looking to increase the capacity of its data centre services this year to accommodate a surge in demand.

‘All of these things combine: the internet, mobile network, satellites, data centres and IT integration in the cloud itself,’ said Komboi, who asserted that PNG had made great advances in the skills needed to develop new cloud-based services.

DataCo’s Paul Komboi. Credit: BAI

‘We have in the past decade increased [skills] exponentially. Bridging the digital divide is not impossible any more.’

DataCo is pushing industry to adopt cloud technology.

‘Cloud computing really redefines digital consumption. We believe it will have a direct impact on the development of our country.’ He acknowledged that unreliable power remains a challenge, but said that enhancing connectivity helps to develop the ‘new economy’.

Thinking differently

Cloud-based technology can enable businesses to meet their goals more effectively, according to Une O’Ome, PNG DataCo’s General Manager, Commercial.

‘What goals does a business want to achieve? Efficiency, growth, customer retention, diversification and growing outside the existing markets. To achieve these goals, increased speed of connectivity is essential.’

’For marketing teams, digital-first means reducing your spending on off-line marketing activities. For customer service teams you are no longer restricted to waiting for the phone to ring or the fax to arrive.’

O’Ome noted, however, that the move into the cloud required a more responsive approach to customers.

‘If a company does not move to get closer to customers through cloud compatibility, it will lose competitiveness.

O’Ome said that customers are looking for businesses to be more efficient. ‘If you want to buy a ticket, or get an answer [to a query] you want it straight away. This change is being driven by the customer.’

Lower costs

An added bonus for business is the comparatively lower cost of using cloud services.

‘This cloud infrastructure does not require a heavy capital outlay, so it is affordable. You pay monthly leases,’ said O’Ome.

Internet prices in PNG, he claimed, fell by 40 per cent in 2019 and about the same amount again in 2020.

‘Connectivity prices are falling. Businesses now have an opportunity. A high speed data connection allows information to flow seamlessly in real time, regardless of physical location.

‘For B2B (business-to-business) teams, digital-first means replacing cold calling with social selling. For marketing teams, digital-first means reducing your spending on off-line marketing activities. For customer service teams, you are no longer restricted to waiting for the phone to ring or the fax to arrive.’

The advantages of using cloud technology

As outlined by PNG Dataco’s Paul Komboi.

• Time efficiency
• Cost savings
• Transparency and Integrity
• Flexibility
• Scalability
• Productivity
• 24/7 availability
• Reliability

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Last Thursday, Business Advantage PNG hosted a special Papua New Guinea Telecommunications Update with the CEO of PNG DataCo Ltd, Paul Komboi, and telecommunications expert, Dr Amanda Watson. Here are five take-homes from the event.

1. The Kumul Submarine Cable is almost complete.

The Kumul Submarine Cable Network (KSCN), the undersea fibreoptic cable system that links around PNG’s coastline, is complete except for the link to Jayapura in neighbouring Indonesia, delayed due to COVID-19, which will be completed in the fourth quarter of this year.

Komboi says the link between Madang and Lae, which was damaged in multiple places by earthquakes in May 2019, is expected to be fixed in 2022. In the meantime, Lae is being serviced by a mixture of fibre topic cable, microwave and satellite.

The next step for the KSCN is the commissioning of its Data Centre in Port Moresby, expected next month. Komboi says this will enable PNG-based companies to host their data in PNG without needing to run their own IT departments, and also access cloud services more efficiently. The opening of the data centre has been delayed while PNG DataCo ensures that security and operational benchmarks could be met. DataCo is already pre-selling capacity at the centre.

2. The National Transmission Network continues to expand.

All but two of PNG’s provinces – Hela and Oro (specifically, Popondetta) – are now connected to PNG’s telecommunications backbone, the National Transmission Network (NTN). The NTN now features 7500 km of fibreoptic cable.

The MD of PNG DataCo says future rollout of cable will be where economic activity is strongest and where there is a specific need: for example, where there is a mine.

The NTN is part of the Connect PNG infrastructure project, which involves co-location of the NTN with roads and power transmission. Future optical fibre connections being looked at include between Kavieng and Namatanai in New Ireland Province, between Kimbe and Kokopo on the island of New Britain, and between Wewak and Maprik in East Sepik Province.

Alongside fibreoptic cable, PNG DataCo is also putting in place satellite connections for redundancy and reliability purposes. Recent connections include Daru.

PNG’s National Transmission Network

3. The NTN is clearly meeting a need.

In 2018, the PPC-1 international cable which connects Madang to Guam and Sydney, Australia, was consuming 3.5 gigabytes of data per second. Now, it is at its full capacity of 10GB/s. The Coral Sea Cable connection into Port Moresby is also at 10GB/s, ten times the capacity of the APNG-1 cable it replaced.

Komboi is reporting annual increase in capacity in the NTN of between 30 and 40 per cent.

4. The wholesale price of data has come down.

He suggests that the price of wholesale data has come down by 80 per cent already and there is scope for lower prices still.

One of PNG DataCo’s constraints is the debt burden it carries due to the money borrowed to build its network. A significant portion of this was borrowed at commercial rates. Komboi says he is working to have that debt restructured, which will not only reduce costs but also allow DataCo to fund future network expansion.

5. In spite of the improved infrastructure, most PNG consumers haven’t seen the cost of mobile phone data fall.

Dr Amanda Watson from the Department of Pacific Affairs at the Australian National University, runs a weekly price survey with colleagues from the University of PNG and Divine Word University. The survey suggests the cost of phone data in PNG has not come down since the Coral Sea Cable was commissioned at the end of 2019.

Watson says the only way most consumers can pay less for their phone data is by buying their phone data in larger bundles, rather than topping up with small amounts regularly.

Watson is hoping the advent of competition from a new mobile phone company owned by Fiji’s Amalgamated Telecomms Holdings will help to drive more price competition later this year.

To view the complete PNG Telecommunications Update, click here.

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Reductions in the wholesale price of data and prospects for increased competition look set to deliver lower prices for business and consumers in Papua New Guinea, according to Paul Komboi, Chief Executive Officer of state-owned wholesaler, PNG DataCo.

Credit: PNG DataCo

Last week, state-owned telecommunications wholesaler PNG DataCo announced a 66 per cent price reduction for its Metro fibre connectivity services, as of 15 November.

Even before this latest move, PNG Dataco’s CEO Paul Komboi says there has been a reduction of ‘almost 40 per cent for the pricing for wholesale since the completion of the Coral Sea Cable in December 2019.

But what about price reductions for end-users?

‘We are promoting growth and advocating for huge price reductions offered to retailers, who need to pass some of that benefit to their customers,’ he says.

Increased competition, he explains, could also impact the prices. ‘When Vodafone comes in, that will add on to that competition and contribute to the reduction in pricing. I hope by 2022 we will see at least a 50 per cent reduction in the retail price. I think the market will move very fast and it will be very aggressive as well.

‘Either the market will force that to happen or we will see the regulator stepping in. We know that Telstra is also coming on board now.

‘That will also create a different dynamic in the market place. We are all hoping that will continue to put pressure on the price of services to the people.’

On-seller

DataCo’s Paul Komboi. Credit: DataCo

During the recent 2021 Business Advantage Papua New Guinea Investment Conference, Komboi gave an update on several initiatives being undertaken by DataCo.

‘We have been participating in the industry as an on-seller, focusing on the fibre assets and satellite assets. We provide services to Digicel, PNG Telikom and bmobile. And now we are looking very closely at Vodafone.’ (Vodafone is expected to launch in PNG in 2022.)

Komboi noted that there has been a steady increase in the take-up of broadband technology in the country, with data volumes increasingly by more than ten times over the past seven years.

‘We are basically up to around 22 gigs [gigabytes] on average being managed throughout the country, both domestically and internationally. In 2014, we had only around 2 gigs.’

Over that same period, wholesale prices have reduced from about K3000 per Mbps (megabits per second) in 2014 down to K300 now.

‘That is a very big reduction in price. Our network is all around the country as we continue to extend further and further into those economic zones and where the population is. We are in the 16 coastal provinces as well as all the Highlands provinces in terrestrial fibre,’ said Komboi.

The price reduction brought in this week brings down the wholesale unit price per month for lower capacities from K145 per Mbps to K50 per Mbps.

Infrastructure

In addition to its cable and transmission infrastructure, DataCo now also has two operational data centres: one in Madang and one in Port Moresby, ‘where you can just come and follow with us, or share infrastructure to suit your needs.’

‘We have got around 16 hubs where you can connect to us and access the internet directly,’ says Komboi. ‘We have also got five international hubs, including one in Jaipura, one in Sydney and also one in Perth.’

Komboi said the digital infrastructure will help government ‘transform into the digital economic in servicing its people’, including providing more efficient e-government services. It also opens up the opportunity for businesses to use cloud services, which will reduce costs. ‘You pay as you require, you don’t have to invest in capital expenditures,’ he said.

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