BANKING SERVICES REACH PNG’S RURAL POPULATION
PNG-based Bank South Pacific’s (BSP) new rural banking initiative is a fine example of how better IT and telecommunications infrastructure is enabling innovation in product and services delivery in PNG.
statistics that some K900 million in cash is in circulation around the countryside, but only about K200 million of that is in banks. ‘Once people have a bank account, you start building a financial history. Banks like information and in the absence of any information it is hard to make valid credit decisions. We think by placing these branches in the districts, money will circulate within the local areas and that will help develop small and micro-business opportunities for people.’
The initiative, which is being rolled out progressively through 2011, is aimed at delivering banking services to the ‘unbanked’ of PNG’s rural areas through a combination of wireless-enabled branches and phone banking. It aims to create at least 200,000 new BSP customers over the next three years. BSP’s Ian Clyne holds a new breed of EFTPOS terminal which will be deployed by BSP on an exclusive basis across the Pacific.
The project has the financial support of the International Finance Corporation, also an investor in BSP.
The branch network will be extended by a range of phone banking services delivered via the network of telecommunications company Digicel.
‘To provide all these services manually is not economical,’ observes Ian Clyne, BSP’s Chief Executive Officer. ‘Modern technology is enabling BSP to take it to the people.’
‘[The aim] is really to get the money out from under the mattress,’ says BSP’s Head of Rural Banking Paul Thornton, citing Bank of PNG
Rising data usage
Increased demand for IT services
Such services are easy for the consumer to access using a basic handset and cost-effective to deliver—critical factors in PNG’s operating environment. All three telcos have business development teams working hard with the business community to further proliferate mobile- delivered services.
‘When you talk to corporate customers, they’re not talking voice services anymore, they’re talking data services,’ says Paul Tevlone.
One measure of just how much Papua New Guineans have embraced this new way of conducting their daily transactions is to consider the dramatic rise in data usage.
‘We’ve doubled our data usage in the last three months and that’s purely because it’s available to everyone,’ Bemobile’s Stuart Kelly told Business Advantage in February 2011. My view of the internet in PNG is that it’ll be successful through mobile phones.’
The rise in demand for data services in PNG has been accompanied by a parallel demand for greater reliability and quality in IT services, driven in no small part by the major resource projects currently under way in the country. Companies like Remington, Datec and Daltron are all IT service providers with offerings that range from computer hardware through to complex IT services and training.
‘There was a bit of a lag, but we started to see opportunities arising from the [ExxonMobil-led] PNG LNG Project from the last quarter of 2010 onwards,’ says David Macindoe, Commercial Manager with Steamships Trading Company, which owns Datec, also the country’s largest internet service provider. ‘There are now expectations for serious service delivery, with more systems analysts and systems engineers needed.
With IT services companies such as Australia’s MCR and Allcom PNG entering the market in recent years, Macindoe is anticipating a more competitive sector in future.
A national broadband network
Notwithstanding the popularity among consumers of handset-delivered data services, business is crying out for faster, more reliable and cheaper broadband internet.
The PNG Government has announced its intention to buy into the high-speed fibreoptic cable network being created to support the ExxonMobil-led PNG LNG gas project, creating in the process a national broadband network. The Government’s US$60 million investment through the Independent Public Business Corporation (which manages PNG’s state-owned enterprises) is likely to see the PNG LNG network integrated with existing broadband infrastructure run by Telikom PNG and PNG Power, together with the laying of new fibreoptic cable.
In addition to IT services, Remington also supplies satellite phone technology—a essential service for mining companies working in remote areas.
‘Mining companies need to be able to set up communications wherever they are. Increasingly, we’re dealing with small companies in isolated areas which are not serviced by Telikom,’ notes Ken Harvey, Managing Director of the LBJ Group of Companies, which owns Remington. Over the whole business, Harvey reports growth of between 15% and 25% per annum over the past three years.
‘As more people are pressing buttons, we’re doing better,’ he says with a smile.
‘The ability to piggy back on the PNG LNG project has provided this country with an ideal opportunity to implement a national broadband strategy at a substantially lower cost than would otherwise be possible,’ announced State Enterprises Minister Arthur Somare in December 2010.
If all goes according to plan, the new network could be delivering high-speed internet services as early as the end of 2012.
Open to all comers
While one might characterise what is happening in PNG’s ICT sector as an evolution rather than a revolution, there is no doubt that the market is growing strongly, and is likely to continue to do so as PNG’s economy expands.
‘The market’s open … more and more people are going to be looking at PNG and asking “How do I get involved in the marketplace? What can we deliver?”,’ says John Mangos. ‘I think you will see a lot more people deciding to compete in the market.’