Improved banking services held back by high internet prices, say bankers


The potential for improved financial and other services delivered via the internet in Papua New Guinea is high, the nation’s top bankers tell Business Advantage PNG. But costs have to fall first.

Moses Liu, Managing Director of PNG’s National Development Bank (NDB), told ‘Business Advantage Boardroom‘, a new business program aired on EMTV earlier this month, that geographical isolation is the main challenge.

The NDB's Moses Liu

The NDB’s Moses Liu  Source: EMTV

‘We find that a common factor is that most of our customers are rural-based and the terrain is difficult to access,’ he says.

‘So, electronic banking has a lot of appeal.’

Liu says if broadband was available cheaper then current uptake trends on phone usage, SMS banking and electronic funds transfer indicate there could be a significant potential upside.

‘Interestingly, that is on the way up: smart phones with the latest apps. We are no different from Kenya, with 50 per cent of GDP transacted through the mobile phone. PNG is no different. We have the same geographic set up.

‘We have seen the new products through the mobile phones.’

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‘We need to improve the telecommunications framework and the cost of doing business through that particular mode would be much more affordable.’

Financial inclusion

The Bank of Papua New Guinea's Loi Bakani Source: EMTV

The Bank of Papua New Guinea’s Loi Bakani Source: EMTV

Loi Bakani, Governor of the Bank of Papua New Guinea, says improving financial inclusion is a priority. ‘We have seen the new products through the mobile phones. It enables a lot of people to get access; you have seen how more people are on mobile phones.

‘For people in rural areas, it really reduces the cost of travel to access financial services in urban towns or cities. The market in PNG is big and there are a lot of people who are not into the financial sector yet. That is why we are trying to get them into financial sector and start a journey to improve their livelihood.’

Bakani says some new products are being used on mobile phone platforms.

‘The biggest one we see now is insurance: premiums being paid by mobile phones. We have seen a lot of people signing up for mobile phone products.’ He says voluntary super is another growth area.


The promise may be there but the barriers to reducing costs remain considerable. Todd McInnis of Deloitte Access Economics in a  presentation earlier this year claimed PNG’s broadband prices are the highest in the Pacific.

‘Another way to make gains is to strengthen mobile money ecosystems around PNG’s resource projects.’

He says the PNG-specific issues are skill shortages, mountainous terrain, low population density and landowner relations. Developing a ‘holistic ICT industry strategy,’ strengthening regulatory frameworks and improving governance are ways to make gains, he argues.

Resources link

According to a paper for the Centre for Social Responsibility in Mining for the University of Queensland, another way to make gains is to strengthen mobile money ecosystems around PNG’s resource projects.

‘We do need to get cost effective, efficient and really low cost broadband so we can pump the product out.’

The report says this can improve the distribution of payments to local communities; strengthen the ‘social license to operate’ for resources companies; and enhance financial inclusion efforts in PNG’s mining, oil and gas regions.

Robin Fleming, Chief Executive of Bank South Pacific, says there is high potential growth, but he, too, believes cost is the issue. He says the implementation of PNG’s National Broadband Network, due for early 2017, may well be a trigger point ‘but you have got to reduce the costs’.

Fleming says banking products that use SMS codes especially show promise.

‘We do need to get cost-effective, efficient and really low cost broadband so we can pump the product out so the users at the other end can access it without spending more on telecommunication costs than they do on bank fees.’


  1. John J says

    I agree with Wapi.

    The high internet charges have been used to prop up Telikom’;s 900 “strong” workforce when clearly only 400 were needed. Go to their head office at any time and try to find the 300 office staff. Empty desks galore. All out roaming.

    We are all subsidizing Telikom inefficiencies via high internet rates. Have been for 30 years.

  2. Since 2013, the broadband market rates have fallen by more than four times – both at the wholesale and retail levels.

    Deloitte’s market research paper – presented early this year at the National Research Institute in PNG was disputed.

    • Wapi Yangen says

      The cost of broadband in PNG is the highest in the world. Undoubtedly, potential investors and tourists are swayed away just by the sight of the highest costs of living including the broadband costs charged by Telikom PNG.

      Look at Australia, you can use free internet while in the hotels, universities, colleges, and other designated areas. Also the costs of using internet in Australian and New Zealand is hundred times cheaper than the rates in PNG.

      This shows that Telikom is a sleeping giant and its time it needs to wake up to the call and do something innovative, creative and sustainable. The World is changing through the use of technology, and Telikom PNG needs to wake up and be innovative, creative and sustainable or else it will soon become next POST PNG, when all the postal and telecommunication services are gradually becoming defunct. With the government introducing competition, and the Digicel and Bemobile giving steep competition to Telikom PNG on telecommunication, its time now its monopolised broadband (internet) areas, TOP Management and Board needs to be creative, innovative and sustainable.

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