Why are call rates to Papua New Guinea from overseas so expensive? The answer’s not quite as simple as you might think, as Business Advantage PNG discovered.
Telecommunications services have been getting cheaper all over the world over the last decade.
In most developed countries, it’s now possible to connect with colleagues and friends across the world for not much more than a local call.
But deregulation, advanced technology and more competition have had far less impact on inbound call rates to Papua New Guinea.
For example, standard rates from Australian carriers to PNG range from A$0.66 (K1.52) per minute up to A$2.38 (K5.50). Even Skype, the internet protocol-based global phone service that has driven down international call rates drastically over the past five years, charges AUD$1.07 (K2.47) per minute for a call from Australia to Papua New Guinea.
Compare this with the cost of calls from PNG and there’s a clear discrepancy. Calls start from 79 toea (AUD$0.34) to K2.45 (AUD$1.05) per minute to call Australia, depending on the carrier and package.
Impediments
So, what’s going on?
Wency Noruka, Divisional Manager, Wholesale at Telikom PNG Limited, says PNG’s telecommunications market was opened up to competitive forces in 2007, but there are still ‘inherent impediments to exchanging international traffic affordably between carriers’.
‘Prices used by Australian telcos for calls into PNG do not reflect the low rates that Telikom currently provides,’ he tells Business Advantage PNG. ‘High prices for calls from Australia to PNG appear to be influenced by two key factors: a blended PNG termination rate that is skewed towards the higher costs imposed by PNG’s mobile operators for calls incoming into PNG; and Australian telcos maintaining high retail prices for such calls.’
Industry sources suggest the disparity between the cost of inbound and outbound call charges goes back to 2001, when an accord to charge the same rates for incoming and outgoing calls between most countries broke down in PNG.
When the rates for overseas carriers were raised, industry sources claim, call volumes inevitably dropped. PNG used to be a top five call destination for Australians. These days, it’s outside the top 20.
The view from overseas
Australian telecommunications providers such as Telstra and Optus were hesitant to talk specifically about individual country call rates, saying only that every international market has different factors affecting how they charge.
What the Australian carriers won’t say out loud is that these interconnect and call termination costs are heavily dependent on the size of the market in question. It may just be that PNG isn’t a big enough market to matter
While carriers are unwilling to explain their own cost structures, an industry economist told Business Advantage PNG the call rates of Internet operator Skype were instructive. The Papua New Guinea termination rate, he said, would be no higher than the A$1.07 (K2.47) Skype charges per minute for a call made from an Australian computer to a fixed or mobile service in Papua New Guinea.
PNG calls not given priority
The disparity between what Telikom charges overseas carriers and what it pays to send calls overseas has also affected the priority given to inbound calls, according to industry sources.
The result is that it is ‘almost impossible’ to call PNG from many countries because it is not worth the trouble of overseas carriers to make the connections work.
High call costs: the impact on business
There is unquestionably an impact on business in all this. High inbound rates act as as disincentive for overseas customers to contact PNG-based exporters and service providers and act as an additonal and unwelcome impost on those businesses with a presence in both PNG and other countries.
John Leahy, President of the Papua New Guinea Chamber of Commerce and Industry, says the business community would welcome lower rates.
‘Access and reliability (of phone networks) is improving,’ he notes. ‘Domestic call rates have started to come down a bit (but) calling in is still not too cheap.’
Can regulation help?
Regulation of call rates remains a difficult prospect, but Wency Noruka says industry regulator, the National Information and Communications Technology Authority (NICTA), can have a role to play.
‘A key factor to reducing call rates into Papua New Guinea requires removing the reluctance by mobile operators to allow Telikom to handle international incoming calls on their behalf,’ he said. (Currently, calls to Digicel PNG come direct into the country through its own gateway.)
‘(NICTA needs to) ensure that any PNG carriers can collect any minutes from international partners on behalf of other PNG carriers and exchange them with other carriers at near-domestic rates.’
As for immediate prospects of lower call rates, it’s probably not worth waiting on the line for an answer.
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Oct 2019 Just paid £1.59 per minute UK to PNG – mobile to mobile
I use Whats App whenever a relative has a mobile that allows that app.
I’d love to know you has PNG – Aus calls for 79t – I’ll get the wantoks to ring me instead! 🙂
Oh I found it. Both Digicel and Bmobile have deals eg K17 for 50 minutes. Our new approach will be to top up a wantok’s account and text to say ring me. (The digicel online top up allows topping up anyone’s account and sending a free text in the process.)
hi
The legitimate cheapest PNG calls I have found come via “PhoneCard Selector” that offers $0.50 per minute from Australia to PNG on landline or mobile – this works well.
BJ
not anymore. Cheapest is probably Lime Blue (69cpm).
Otherwise Mr Calls is 89c + $1.47/3 minutes, or Super Deal $1.76/3 minutes.
Just for everybody’s information, if you need to ring PNG enough to warrant a minimum of $59 per month, Southern Phone Company landline package costs 39c + 28cpm to PNG landline or 39c + 40cpm to PNG mobile, and calls capped at $2 for 10 minutes.. I’ve never found anything close to that for value, and they’ve provided a reliable service to me for years.
I support what Mr. Wency Noruka, Divisional Manager for Telikom PNG Wholesale is saying “high prices for calls from Australia to PNG appear to be skewed towards the higher costs imposed by PNG’s mobile operators for incoming calls to PNG and Australian telcos maintaining high retail prices for such calls”.
It is clearly a misconstrued marketing message to base the high cost of International calls into Papua New Guinea using expensive and low quality Satellite Backhaul Links used by the Mobile Carriers. That should not be the benchmark, when we already have better quality international fiber transport telecommunication systems in place.
Some of these Mobile Carriers have already bought capacity from Telikom PNG Limited on its submarine fiber cables. Therefore, I fail to see any logic in holding onto out-dated “interconnection rates” to disadvantage businesses and the people in Papua New Guinea.
This is a subject for PNG’s NICTA and Australia’s ACCC to investigate and advise us…and quickly please
Telikom PNG uses high quality sub-marine fiber cables to transport its outgoing and incoming calls from Australia.
Obviously these false justifications based on historical data from 2001 is clearly misleading.
PNG has been experiencing an uninterrupted 10 plus years in her GDP growth of above 6%. How come, this is not reflected in call volume? It really doesn’t matter how those calls are routed to Papua New Guinea.
I was shocked to find that to ring PNG from my mobile account costs $25.00 per minute. I work with a volunteer teacher training group. I like to keep in contact with the teachers I have worked with along the Kokoda Track but this price makes it prohibitive!!
which mobile.. Optus prepaid say it only costs $1 per minute
I am sorry to say that I went to Trobs in April 2017 and was charged $23.00 per minute though TPG which blew out my mobile account and I an unable to use it until it resets almost a month later and I do nursing:(
The discrepancies have been such a pain that I have resorted to emails and text messages, making calls to PNG limited to less than 3 minutes. It is one of the most ridiculous telco situations around and it is not funny at all when you want to call family and friends and make business calls to PNG. Given the present unfriendly market, most of the calls that I receive originate from PNG as it is cheaper for them to call me in Australia rather than me calling PNG.
It is a huge disadvantage to business communications to PNG from overseas. It is clearly an irony when PNG is promoting increased business engagement, yet cannot get its act together to provide cheaper and more affordable calling rates into PNG.
It is a disadvantage for our business wanting to maintain regular telephone, data and mobile links to PNG. It’s just too expensive and not worth the money, time and effort.
While I appreciate the open market policy, it does not help one iota on the incumbency that exists. We do business with other countries similar to PNG and it is a whole lot cheaper to call these countries. It’s a farce.
Dr. LM Neuendorf
CEO
MHHCL-A Landowner Company
Great article! For anybody that has friends, family or business dealings in PNG then they will know the call rates from Australia to PNG are outrageous. Although the world is getting smaller the costs for international calls (at least for PNG) keep increasing. At AUD$2.38 per minute to call PNG from Australia it is so much cheaper to call almost any other country in the world. For the same airtime you can call London or USA from Australia for only a few cents per minute. Sure the PNG market size may not be as large but there are still many countries around the world similar to PNG with much lower international calling costs.
The article mentions that NICTA should be able to reduce the calling rates if they can remove the reluctance by mobile operators to allow Telikom to handle all of the international incoming calls on their behalf. In my view, PNG carriers should be able to collect any minutes from international partners on behalf of other PNG carriers and exchange them with other carriers. In theory this should reduce overall calling costs.