‘Another 20 years wasted’? Ramamurthy says the stakes are high for internet reform in Papua New Guinea

Welcome,

It is critical Papua New Guinea does not squander the opportunities provided by the Coral Sea Cable System, says the Chair of the Business Council of PNG’s Internet Working Group, Sundar Ramamurthy.

Coral Sea Cable

Prime Minister James Marape officially launches the Coral Sea Cable in Port Moresby in June 2020, 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

Papua New Guinea is at a crossroads with the development of its internet services and any mistake could mean ‘it’ll be another 20 years wasted’.

That’s according to Sundar Ramamurthy, CEO of Sola PayGo and Chair of the Business Council of PNG’s Internet Working Group, who was talking at the recent joint Business Council of PNG/Bank South Pacific PNG Business Digital Commerce Forum.

Ramamurthy, a former CEO of state-owned telco Bmobile, said PNG’s Government cannot waste the opportunity currently before them with the arrival of the Coral Sea Cable System (CS2) because ‘cheaper internet and cheaper data have a massive impact on the country’.

Solar PayGo’s Sundar Ramamurthy. Credit: BAI

He expressed concerns that market conditions in PNG – a concentrated retail market dominated by a single player (Digicel) and state-owned enterprises’ monopoly on fibreoptic cables – led to higher data prices. He said PNG was not making the most of the arrival of the Coral Sea Cable cable and referred to the country’s near neighbour as a model.

‘The Solomon Islanders did not waste the opportunity,’ he said. ‘If you look at where the Solomon Islands is today compared to where they were a year ago; they were 20 years behind us a year ago and now they are ahead of us, since the CS2 cable came in.’

The 4700 km cable between Australia, PNG and Solomon Islands, was completed in December 2019, with state-owned wholesaler PNG Dataco responsible for connecting the cable domestically. Recent analysis suggests data prices in PNG have not yet fallen as far as expected this year.

Story continues after advertisment...

Making progress, not money

Rather than treat it as a profit centre, Ramamurthy said PNG needed to treat the CS2 cable the same way it did other enabling infrastructure, like roads and bridges.

‘You measure the outcome as an increase to GDP and what people can do on top of it, not [say] “the bridge cost me 100 million bucks, so let me put a toll on it”. We don’t put a toll on the Highlands Highway but this road is the road we are going to be using for the next 20-to-30 years, which is the lifespan of the fibreoptic cable.’

‘We need to treat the CS2 cable as an enabler for the country and not a cost centre.’

He expressed concerns that the commodification of the cable, which had been provided at a heavily subsidised cost to the country due to Australian aid, would mean that the benefits of the cable will be lost.

‘You can reduce the cost of wholesale price, but have absolutely no impact on retail and that’s what you get in an imbalanced market, so even if you gave the CS2 fibre cable away for free I would guarantee your price of internet doesn’t drop because the wholesale cost is a component of the retail cost,’ he said.

‘Therefore the only credible way we have [to reduce costs] is we need to treat the CS2 cable as an enabler for the country and not a cost centre. If you take something for free and you put into a proprietary limited company and say “make money”, then it is pretty obvious they are going to charge for it.’

Comments

  1. Ebu Gomana says

    A very good thought provoking statement by Sundar. While the statement goes onto talk about CS2 and the opportunities it creates and why it should not be comoditised, he in the same piece in the second last para also states that even it the CS2 is given away free, he correctly states that this will have little to no effect on the Retail prices which is where the real impact should come from.

    So I am left confused as to what the whole statement is about. He did not address what the real issue is if it is not the wholesale price or the CS2 price which only lowers the POM to Sydney component.

    The Retail price should really be driven by effective competition in the retail space to address the market power of the single player (Digicel) that Sudar mentions in his opening remarks. The single cable operator DataCo is also vividly referred to also in the opening remarks but there is regulatory intervention on the Wholesale supply which is forcing wholesale prices down to cost but with minimal impact on the retail price. However the retail market power continues to charge high prices even 50% more than its weaker competitors given its size, reach and power it enjoys.

    As the Chairman of the business Council who had previously sold his ICT business to the retail market power and his BCPNG ED was the chairman of the Foundation of the retail market power, I can understand why he cannot directly address and push the real issue affecting retail prices.

    Thanks

    Ebu Gomana

Leave a Reply