ICT in PNG: Who the hell is doing what?

By Emmanuel Narokobi

I actually wrote this post last year and didn’t put it up for various reasons but thought I’d better do it now before it becomes irrelevant and also after seeing the great work being done with WIMAX as reported by our Vanuatu friend, The Red Tank. Most of the heated Hoo-Hagh between Telikom and Digicel has died down now but some questions still remain to be answered about our Information Communications Technology industry.

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Wanna Be‘, made a comment on one of my posts which he said:

“I don’t know if you read Sundays Independent [Sunday Chronicle] but one of the writers was going on about satellites and air space and all that. He wouldn’t have won any prizes for outstanding journalism or anything but don’t you think he’s on to something there?”

This got me thinking more about the current governments Information and Communications Technology or ICT policy and where it’s heading for us. You can read them yourself here (in PDF):

  1. IPBC Covering letter
  2. PNG Telecommunications Deregulation Blueprint (May 2007)
  3. National Information and Communications Technology (ICT) Policy

I have read the policy papers, which although sets out some noble goals and aspirations to developing ICT in PNG and the strategies it will take, the policy documents however remain very muddy on the roles of the players in the industry. It would perhaps be fair to say that the current policies do not reflect in anyway the existing Telecommunications laws of PNG. The laws currently support a controlled deregulation of the industry. So that would mean that although de-regulation is to happen it will do so under certain guidelines.

For most of us, how our ICT sector is developing can be easily understood by following the players and their services in PNG. In terms of the players then, what are their guidelines and what are the rules for them to follow under the new ICT policy? This is important as it goes back to the heart of everyones concerns about ‘competition’ being the catalyst for better prices and efficient services.

Now before I continue I want to state clearly here that I am not placing any blame on any player here. Everyone involved has a story to tell and everyone feels that they have a right to the positions they have taken. The main issue here is that there are allot of positions here and someone has to make it clear as to where everyone should stand.

ICT services in PNG fall under 3 major categories:

1. Landlines (PSTN); voice and fax services
2. Data; internet both wired and wireless
3. Mobile; mobile telephony (however this is not clear cut as it can involve data services as well)

Roughly 5 years ago all we had was Telikom which was regulated by PANGTEL alone. The Independent Consumer & Comptition Commission(ICCC) did not exist back then. Telikom was the sole provider for all our ICT needs. When deregulation was ear marked through legislation in the Telecommunications Act of 1997, two types of roles for players were discussed to be allowed to exist in PNG at that time.

1. Carriers: which in our case would be Telikom. The carrier would own the landline infrastructure. It would be the only one that can provide telephony services and it would be the only one that can run the international gateway for both telephony and internet services, and

2. Value Added Service (VAS) Providers: This would be mobile phone companies and internet service providers. For example Digicel has a VAS license which is restricted to mobile services and ISP’s have VAS licenses that are restricted to internet services.

On top of the above allowable roles for players in the ICT sector when deregulation was trying to be introduced, the ICCC came into existence. The ICCC therefore took over the role of regulating pricing of ICT services and PANGTEL was to regulate the technical side of ICT services.

Carrier Services

Coming back to the players in the industry, 5 years ago before deregulation was a hot topic, the playing field looked like this; Landlines and Mobile Phones were only restricted to Telikom and Data services were being re-sold from Telikom to customers through ISP’s like Daltron, Datec, Global and Online South Pacific. (There used to be a 5th ISP called Data General but it went out of play around the time it was bought by HiTech Industries from Remington). So the only competition happening at that time in PNG’s ICT sector was at the internet service level. The ISP’s did this through their Value Added Service License for Internet.

However there is one internet player that seemed and is still out of place and this is the high speed broadband internet supply company called NewSat. NewSat entered the internet market to provide internet services to mining companies via satellite and VSAT in areas which were described as ‘remote’ locations. Because Telikom at the time was not at the service levels that mining companies were happy with, they naturally switched to NewSat. The arrangement that NewSat had with Telikom was that because Telikom had no services in these ‘remote’ locations it was a legal right for communications to be available to everyone and so Telikom allowed NewSat to provide their services to their ‘remote’ customers.

Keep in mind that the policy in the last 5 years was to only provide for 2 types of players; carriers and value added services. So if NewSat, (which is still here in PNG today) is allowed to bring in internet from overseas bypassing Telikom’s infrastructure and direct to customers, doesn’t that make them a carrier? How can a company that is not registered in PNG, who pays no taxes to PNG and does not even employ anyone in PNG get approval to provide carrier services?

What this means then is that maybe Digicel should bring in internet on their own accord? Actually speaking of Digicel, you can make and receive international calls with them too so have they taken on the carrier role as well in providing international telephony access? My point is that if anyone with money can bring in carrier grade services into PNG like NewSat and Digicel then how is this regulated? How does PANGTEL and ICCC decide who can take on the big wholesale jobs of supplying telephony and data services into the country?

This is what I mean when I say that the new ICT policy does not clarify the roles of the players in the industry. Although it is in fact claiming that Telikom will take on the lions share of carrier services it does not layout a clear picture of how other carrier grade providers (like NewSat and Digicel) were let in and how they were qualified to be doing what they are doing right now.

As we all know there is nothing wrong with competition but it has to be done correctly so that we know that registered PNG companies are running these carrier services and we need to have a qualifying process for them so that we know that the companies coming in as opposed to others that may have tendered will provide competitive rates with savings to be passed onto us telephony and internet customers.

Value Added Service (VAS) Providers

In the VAS role we have our ISP’s, Digicel and Green Com. The ISP’s in the past enjoyed the clear distinctions between Telikom being a carrier and them being re-sellers for internet via the Tiare Gateway. With the above mentioned introduction of NewSat and possibly Digicel (for internet on their mobile phones) this poses a a number of questions again about regulating competition in the market.

Firstly with NewSat, they are not a registered PNG company and so another question besides why PANGTEL let them in is what ICCC is doing about it? Why are they not paying taxes? If they are not a registered PNG company then how can ICCC regulate the rates that they are offering in the country? NewSat still operates today through their agents Hitron and you only have to look at the Hitron website to find out what services they provide. So from a regulatory point of view is NewSat a carrier and is Hitron a re-seller to NewSat? Do we have the regulatory framework to classify what they are doing?

On top of that comes Telikom with their wireless internet service being sold directly to the customers called Telinet. Now if Telikom is a carrier then why is it bypassing registered ISP’s with licences who are already re-selling internet for Telikom? Isn’t that anti-competitive? Haven’t we been crying about competition all this time? Of course if it is an efficient and cheaper service then I’m all for it and I’d break down my door to get to it, but again, what is the process for Telikom qualifying to do that? Because if they do that then why can’t Digicel do the same since it already acts as a Carrier why can’t it just get an internet gateway too and start selling internet to it’s mobile phone customers?

The potential problem is this, if Telikom controls all roles of providing the internet both wireless and via ADSL (which it has started but is waiting ICCC approval), then do we want to be stuck with a huge demand for the services when their linesmen (especially for ADSL since it runs on copper wires) cannot get to you because they are busy? They have failed miserably with landlines for years so how do we know if they can improve with their implementation with the potentially huge demand for these new Telinet and ADSL services?

Value for Services in the long term

One cannot ignore Telikom’s huge drop in prices for their Telinet service. I currently use Daltron’s wireless broadband and I’m hit with a bill of roughly K2,600.00 per month (Daltron’s rates have since dropped). Telikom can give me a 1.5MB service with a 1000MB cap at K119.00 per month. I have to applaud Telikom there, I am as excited as the next man about prices like this. From asking a couple of friends about whether they would jump at this, it was all a resounding ‘Definitely!!!…the ISP’s have ripped us off for so long’. The majority if not all the businesses and anyone else who spends allot on internet will no doubt switch over because it makes plain business sense.

I know some people may not care as to why ISP’s have been so called ‘ripping us off’, but if we are to develop ICT in PNG then all the players must have protection for their investments. PANGTEL threatening Digicel is a perfect example of this. From what I can gather our ISP’s have also been faced with fighting on an uneven playing field.

ISP’s have invested allot of money in the past several years especially on wireless internet and so how will their investments be protected?

Where to from now?

The splitting of Telikom into 2 companies will be an interesting exercise. It makes sense in some ways in that the infrastructure part is handled by one company and the actual services by another. But you have to wonder if our economy is large enough to adopt such a strategy? It seems like a first world strategy for a developed and robust economy, because I would’ve thought that all we needed to improve in Telikom was it’s management. I would hate to think that perhaps splitting the company is a way for dressing up one of them for an eventual fire sale.

If the Telikom split is to go ahead anyway and if that is what we will be living with for the rest of our lives then lets do this properly and lets clarify the roles. The roles of the 2 purported Telikom companies and all the players in the industry need to be classified and regulated appropriately because what we all need is a vibrant ICT industry where all service providers know what they can and cannot do in PNG.

The ICT Policy reads:

“At the heart of this Strategy is the recognition of the importance of three interrelated enabling conditions:

  • Connection: Affordable access to viable ICT infrastructure such as telecommunications networks, computers, internet signal, mobile phones and other devices.
  • Confidence: Developing the necessary skills at all ages, in all parts of society, to use and participate in ICT effectively. Such skills include functional and digital literacy and the ability to take part in an interactive electronic environment. Confidence also encompasses the dimension of trust in using ICT and addressing the challenges that may erode trust in electronic commerce such as spam and electronic crime.
  • Content: The information which can be made available through digital networks includes national heritage collections, goverment information, local language resources and research databases. Trough effective uses of the internet, the people of Papua New Guinea can gain access to online facilities for entertainment, learning and business as well as information generated by government, businesses and community organisations.

These three dimensions reinforce one another. Being connected provides the means, confidence provides the skills and trust and content provides the reason for engaging in the ICT age.”

Being dynamic in the services you can provide is one thing but being dynamic in how you deliver and have your services paid for is a totally separate issue. So I believe that the three C’s as provided above are admirable, but for my argument here in this post, who will build the connections? The players of course. They are the ones who will provide the efficient and competitive delivery of content that will determine confidence.

It is a mammoth task for all players to develop our ICT industry and Telikom and the government need to learn how to work with the private sector and know how to make concessions when implementing their ICT strategies. Everyone in the ICT industry has the potential to catapult all our dreams into the future if they are all simply given clear roles and a level playing field to play in. In the end that is where proper competition will bring the results we all want.

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18 thoughts on “ICT in PNG: Who the hell is doing what?

  1. A very interesting article. I keep wondering if Digicel will let itself be relegated to just being a service reseller. Your Government is very sure of its path to split the industry into two, with PNG Telikom holding the leash on networks. How this will happen I hold my breath to see happen…some sharp bend to negotiate, no doubt. Good Luck to Mr Somare and his government…

  2. Yep, regulate it. Back to the Telikom Technophobes ripping everybody off. Telikom hate the internet. Up to the end of last year, their internet division didn’t even have an email address. Nobody seems to understand that Telikom hate the internet, in fact they hate anyone that wants to communicate fullstop. It made me nearly cry when it was announced that Telikom would have the only international gateway, so we can go back to “all lines to the destination you are calling are in use”
    Telikom are one of the biggest things holding back PNG, in the modern business world you need cheap rapid reliable communications, which as we all know, Telikom is incapable of providing.
    The PNG government needs to get real, and drag itself and telicommunications into the 21st century.
    I’ll give you a comparison. On VSAT in Australia the service we use in our remote camps costs us K150 per month, 512K, 1Gb downloads throttling after that.
    The closest equivalent Telikom service is K9000, is this cost effective?, no, I don’t think so, it makes every Mb worth K9! I can get a fully portable BGAN system with nearly the same price data. Somebody is being very unrealistic, given that Telikom is most likely piggy backing off one of the existing VSAT companies, and reselling data for a 1000% mark up!

  3. Trevor, thank you for contributing. K150/mth for 1Gb downloads will still be a fantasy for us for a while.

    I’ve been reading from several articles about how the only gateway is a resource that needs to be protected like the forests, that we have to protect state interests and even more stupidly the argument that since we’ve survived with it for 33 years or so it isn’t such a bad price to pay in order for our government to regulate what international secrets might be coming and going through our gateway.

    Grow up! How can you compare protecting a company that possibly makes K200 million a year, who has not worked out how to re-invest effectively in human resources and service delivery against the very likely possibility that if every tom, dick and harriette had cheap fast internet and phones that worked we might just actually bump up the economy by another 2% in growth.

    What are we trying to protect here? An ancient ideal of misguided national pride or the securing of the future of economic growth for the next 50 years. Who cares who owns the gateways if it means the government can collect more taxes from more successful local businesses.

  4. And then there are those who believe there is no such thing as a free market…when it comes to national security and national interests, you bet the bigger countries will go to great lengths to protect themselves…the Net is full of such stories…US bombs Iraq for protection of its national interests…PNG closes gateway for protection of its national interest…what’s the difference?

  5. Trevor,
    Thanks for the deepth knowledge made avaliable to this forum.

    Is there any restriction on the number of ISP licenses in the country (Both for mobile and Internet) Thanks

  6. Very Interesting Read,

    Emmanuel thank you for keeping us informed, I started reading from the top so will comment in that order.

    Very true, it is very important that ICT is regulated and more importantly roles are defined clearly on what one can do and can not do. We can not just let anyone come in and start operating without proper application and process. It would be like letting a foreigner come and work without a work permit. In properly regulating and defining ICT regulations and roles reduces confusions and helps the organization define and plan its operations, it stops entities from straying and stepping on each other toes. Its like an employer not giving his employee a job description, the poor guy would been wondering what is it he was hired to do. It would also be very difficult for the employer to judge and rate his employee and so ICT Regulations and roles must be clearly defined so they can be monitored and managed properly. IF YOU KNOW WHAT YOU ARE SUPPOSE TO DO, YOU WOULDN’T BE WONDERING WHAT TO DO.

    Last week a full page advertisement was taken out by Telikom PNG on ADSL. A good point mentioned above is that how can you provide good ADSL Service when you can not even keep our phone lines running. Service delivery is lacking, Confidence in connection is lacking, delivery of content is very poor.

    Telikom splitting interesting, I would agree with you that, really what Telikom needed was a change of management. The management I thought lack potent to take Telikom to the next level. Telikom needs to be revitalized, and new management is greatly needed, it needs to reassess its goals and reset itself to service provision. And interesting read, I read from an old magazine was what happen to Israel and what its government did to its Telikom industry. Our ministers like to travel, but I wonder if they learn anything from their trips?

  7. Thanks Treves, just note however that I wrote this when the Government was looking at Splitting Telikom. This is no longer a concern as they canned that idea and went ahead to selling off 50% of BMobile instead.

    As to clear licensing roles in the industry, an example of that occurring right now as we speak is Digicel running internet services over their mobile phones without an explicit licence enabling such services and pricing for it. Have a read of the discussions on mobile web here.

  8. Another recent example of licensing issues was reported in the Post Courier on the 16th Feb, 2009:

    Telikom complains over Digicel’s call diversions

    A complaint was lodged by Telikom PNG Limited against Digicel (PNG) for the use of a Leased Cost Router (LRC) which diverts calls made from Telikom fixed lines to Digicel numbers when it was allegedly not licensed to do so.

    Independent Consumer and Competitions Commission’s chief executive officer Thomas Abe confirmed yesterday that Telikom had lodged a formal complaint to ICCC.

    Mr Abe said until an investigation was conducted by the ICCC and findings established and relayed to all parties concerned, the commission was not in a position to comment on this matter.

    He said the law required that provision of internet services could only be provided by a person or entity that held a VAS licence. He said that Digicel applied for a VAS licence and was granted one early this year.

    Mr. Abe made the remarks in response to questions on whether Digicel was licensed to use a LCR which diverts calls from fixed lines to Digicel numbers which in effect bypasses the Telikom gateway and eliminates the interconnect call costs.

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    which to me, means that Digicel is okay now to sell internet services, but redirecting calls like a landline exchange may need a Carrier licence, which I believe Digicel does not have for switching land line calls.

  9. Here it is a year later, Telikom are just as recalcitrant as usual. If Telikom focussed it’s attention on moving forward rather than trying to stop things the regulatory framework might be able to change with the times. It the corporate equivalent of a child that doesn’t want to grow up, crying for attention and taking the adults focus away from the real issues. Rather than simply fighting to close Digicel’s international gateway down, why didn’t they simply insist on a licence being issued. Not corporate suicide Telkom are effectly and arm of the government in their current form, and government is for the people, not as an end unto itself.

    Data is still cripplingly expensive, PNG is on a paupers diet, even in the city, whilst even in rural area of asia, the neighbours dine on digital caviar, with VSATs for everyone!

    As for Digicel running internet over their phone system, who cares, only Telikom, because they were too stupid to look outside the door and see the rest of the world.

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