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Digicel PNG plans television network as it expands its mobile network

Mobile phone provider Digicel PNG plans to launch its own multi-station television service later this year. The move is the latest in a series of strategic moves to transform the mobile phone company into a broader based media company in Papua New Guinea.

Since the Papua New Guinea Government began deregulating the telecommunications market in 2005, the range of technologies has expanded, the number of providers increased, prices have fallen and the network of mobile and broadband services across the country has expanded.

In April, state-owned fixed line and broadband provider Telikom PNG signed a US$20 million contract with the California-based company Aviat Networks for a new cross-country microwave link.

In May, the little-known Awal Communications, operating in PNG as A-Tel, announced it planned to roll out mobile coverage to rural and remote PNG.

More recently, PNG’s state-owned mobile operator Bemobile Limited (now trading as bmobile), which was re-capitalised in 2013, last week announced a non-equity strategic partnership agreement with Vodafone UK to develop its PNG and Solomon Islands operations.

Tower roll-out

Meanwhile, Digicel PNG—the country’s largest mobile provider—is aiming to have 1160 mobile phone towers across PNG, providing coverage to 100% of the population.

‘We have just over 800 towers in PNG at the moment,’ Digicel’s Director, Government Relations, Gary Seddon tells Business Advantage PNG.

‘We’re rolling out another 360 towers this year, between now and November. Sixty of those towers are part of the World Bank telephony subsidiary programme that Digicel was successful in securing from the government of PNG earlier this year.’
Since entering PNG in 2007, Digicel claims to have invested K1.7 billion on building its network.

‘I’ve been in PNG for 16 years now and I still remember when it cost K2,000 to K3,000 to buy a mobile phone handset.’

‘The medium to longer-term strategy is quite a straightforward one. It’s very much about delivering reliable, affordable communication services to all Papua New Guineans,’ says Seddon.

Seddon says Digicel also wants to be ‘Number One’ in the delivery of innovative services.

‘In March, 2014, Digicel launched 4G Long Term Evolution (LTE) in Port Moresby, delivering the fastest mobile internet bandwidth in PNG, with a plan to push that out to other major centres before the end of the year.

‘It’s about bringing services to Papua New Guineans that people in developed countries currently enjoy.

Competition

While Digicel remains the dominant provider, competition is good for the country, says Seddon.

‘I’ve been in PNG for 16 years now and I still remember when it cost K2,000 to K3,000 to buy a mobile phone handset. Digicel now sells handsets from K49. I also remember when it used to cost K250 to buy a SIM. Now you can buy one for K5 to K10 and get K5 to K10 of credit. I also remember when it used to cost K1.50 to K2.00 per minute to make a phone call and you couldn’t pay per second. Now you can have prepaid/postpaid accounts, you can pay by the second and you can have bundled services where phone calls can cost as little as 1-2 toea a minute.’

Internet costs

One of the chief benefits of the PNG Government’s plan to transfer the Telikom PNG’s transmission assets to a new national wholesaler, PNG Dataco, is that internet consumer costs should fall.

The cost of off-island fibre internet is three-to-four times more expensive than the cost of satellite internet bandwith in PNG, says Seddon, which is quite the reverse in other countries.

‘At present, 80 per cent of Digicel’s internet traffic is going out over satellite and only 20 per cent is going out across fibre, and that reflects the cost of fibre bandwidth in PNG. Digicel has taken this step to ensure it provides affordable internet services to its customers, which are presently as low as four toea per MB in Digicel’s bundled services.’

Internet growth

It’s the internet where Seddon sees growth.

‘What we’re seeing in Australia and other developed countries is that people are using less voice and text, and relying more on the internet, as a means to communicate. Apps such as Wassup, Facebook, Viber and Skype are the preferred means to communicate.

‘Typical trends therefore show voice revenue to be flat or decreasing, while data is increasing and the same can be said in PNG.

‘As we roll out such services as 4G/LTE and people can connect over the internet using Voice Over The Internet Protocol (VOIP), or Skype and so on, it could effectively reduce the costs of communication.

‘Digicel is not only pushing into areas where there is no coverage but is also expanding its capacity where it does have coverage. For example, in Alotau, Milne Bay Province, you experience very good 3G coverage, but some of the other smaller centres in Esa’ala, the Trobriands, or Tagula, the Digicel services are limited to 2G/Edge. We’re expanding 3G services into these areas as well.’

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