Telecommunications companies' marketing activities in PNG involve regular forays into remoter communities.
PNG’s ICT evolution
Information and communications technology (ICT) reform in PNG is not only delivering cheaper prices and stronger competition: it is also helping businesses devise a new generation of innovative services.
A s m o s t c o m p a n i e s t h a t d o b u s i n e s s t h e r e w i l l t e l l y o u , w h i l e i t c a n b e v e r y r e w a r d i n g , P a p u a N e w G u i n e a i s a d e m a n d i n g e n v i r o n m e n t i n w h i c h t o d o b u s i n e s s . O n e o f t h e r e a s o n s f o this is undoubtedly its infrastructure, which has struggled to keep pace with the country’s needs in recent years. r
Digicel has already made its first move to broaden its offering by acquiring specialist telecommunications systems integrator and internet service provider Data Nets Limited, which has operations in PNG and Fiji.
Rising to the PNG challenge
In the past five years, however, one area of infrastructure in particular has made significant progress—information and communications technology (ICT).
From 2007, when Irish-owned Digicel aggressively entered the local mobile market, the sector has experienced the benefits of increased competition. Prices have fallen for mobile calls, reliability has improved markedly and the mobile networks themselves have expanded to cover over 75% of the country’s population—quite some feat in a country with a population as widely distributed as PNG’s.
Some estimates suggest that more than 1.5 million Papua New Guineans—perhaps 25% of the population—now have mobile phones, compared to just 65,000 fixed line subscribers.
Opening up the sector
For ICT companies, PNG presents several challenges for service delivery.
‘From our standpoint logistics are an enormous challenge,’ notes Stuart Kelly, Chief Executive Officer of Bemobile. ‘The cost of internal travel is high, so if you’re sending people goods—in our case handsets or cards—that is quite significant. Power is still a challenge, but it’s getting a lot better and the remoteness and topography of the land are also a challenge.’
Not that they can’t be overcome. In fact, the very nature of PNG’s exacting environment has driven innovation.
‘If you throw in the technology, which is going in leaps and bounds, it is the player who takes the initiative to look at new, innovative strategies and ideas who will obviously have the advantage,’ asserts Telikom’s Paul Tevlone.
The latest stage of the ICT reform process occurred in 2010, with the passing of a new ICT Act, the creation of a new industry regulator (NICTA—the National Information and Communication Technology Authority) and the commencement of a new regulatory regime on 1 November 2010.
The new regime is designed to remove Telikom PNG’s remaining monopolies in fixed line and broadband services and encourage greater competition, as Paul Tevlone, Acting Chief Executive Officer at Telikom PNG, tells Business Advantage:
‘The major change in the policy is that the retail market will be deregulated and opened up, and the market itself will dictate pricing.’
John Mangos, Chief Executive Officer of Digicel (PNG) Limited, explains what this means for Telikom’s competitors:
‘It effectively means that someone like Digicel will migrate our licence from a mobile-only licence to looking at all telecommunication services. It has created a broader, more level playing-field, not just for ourselves but for anybody coming into the market.’
The services initially deployed by the telcos themselves to keep their own customer service operations cost-effective in such a demanding environment—mobile credit and balance checking, for example—are now being offered to external parties in a range of sectors.
Retail customers of state utility PNG Power, for instance, can now pay for their electricity by mobile phone when their electricity metre runs out in the middle of the night (all power in PNG is prepaid). Members of the country’s main superannuation funds, NASFUND and Namabawan Super, and of the Teachers Savings and Loan Society credit union can now check their balances by SMS. Mobile banking is one development currently under way, with the country’s largest bank, BS , expecting to launch a mobile ‘e-account’ in mid-2011, to complement its rural banking initiative (see box on opposite page), and a new internet banking service. Mobile technology could well deliver new services in the insurance sector too.