Boosting data speeds and widening broadband coverage are the aims of Digicel’s incoming Chief Executive Officer, Brett Goschen. He told Business Advantage PNG he will be drawing on his experiences in Africa to help transform the telecommunications landscape in Papua New Guinea.

Digicel PNG’s Brett Goschen

Business Advantage PNG (BAPNG): You come to PNG from several roles in Africa. What do you find most satisfying about working in developing economies?

Brett Goschen (BG): For me, most definitely, was being part of an industry that so visibly and in such a short space of time transformed the lives of so many hundred of millions of people.

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In Papua New Guinea you are ‘only as good as your last implementation’ says Steve Hillyard, General Manager in PNG for Pronto Software. He tells Business Advantage PNG that networking and creating positive ‘word of mouth’ are crucial for success in PNG’s ICT market.

Pronto’s Steve Hillyard

Hillyard says new business for the software company, which specialises in management systems for logistics and finance, often comes about from employees changing firms. ‘Sometimes people, from a management point of view, move businesses so we become known.

‘People sometimes advertise for staff with Pronto skills.’

‘Having over 50 sites in PNG means that we have got a lot of staff that know Pronto.

‘So, if they find themselves out of work sometimes they can find themselves another job—even to the point that people sometimes advertise for staff with Pronto skills.’

Difficult

Hillyard says economic conditions remain difficult in PNG. ‘I think it is a tough market. One of our advantages is that we have been there for a long time and we have a good reputation.

‘It is important to know where the stock is and where the cash is.’

‘It would be difficult to go into the PNG market now, particularly in the current climate. So what for us, I suppose, is an advantage is really is a disadvantage for people who might want to enter into the market.’

Control

Users of Pronto’s software, says Hillyard, are able to predict what they need to buy based on what they are using or selling. They are also provided with a level of stock control.

‘It is important to know where the stock is and where the cash is. Is it in one of their branches or is it in transit? Has it landed in the country? All of those things they can track,’ he says.

‘Sometimes, with less advanced systems, they wouldn’t be able to do that. It disappears from one site and doesn’t appear on the other site until it has checked in. With Pronto, they know where it is.’

Communications

Hillyard says the company’s software ‘only takes up a small amount of band width’, which is an advantage in PNG.

‘It is very robust, easy to use. Because we cover such a broad range of modules, with those businesses we only turn on the bits that we need. That gives us strength in a country like PNG.’

‘We have opened a data centre in Port Moresby and that will be initially for customers in the city.’

Hillyard says it would be beneficial if PNG had better communications, adding that ‘over the last couple of years’ communications have improved.

‘We have opened a data centre in Port Moresby and that will be initially for customers in the city. But we will look to extend that.

‘Communications between PNG and Australia aren’t good, so it is difficult to host [services] for people in Australia if they are in PNG. Whereas with other countries, like New Zealand, we can host for people in Australia because the band width for Australia and New Zealand is pretty good and stable.

‘That is why we have opened a data centre in Port Moresby; connectivity around Port Moresby is better than connectivity back to Australia.’

Foreign exchange

Pronto is an Australian company with customers in Africa, the United States and the Philippines: over 30 countries in total. The company’s research and development is undertaken in Australia. Hillyard says PNG accounts for about five to six per cent of the company’s business.

‘Getting money out of the country can be difficult.’

‘We do a number of industry verticals [sectors] in PNG: import and distribution businesses, mining businesses, retail businesses.’

PNG’s foreign exchange shortage, he says, has been an issue. ‘Getting money out of the country can be difficult, but we spend a fair bit in the country, so we get paid in kina and we are spending it in kina.

‘We have been lucky to have business in areas other than mining, but there is a knock-on from mining to other businesses, particularly in a country like PNG. Importing companies have less money to spend; less people are working.’

Flat

Hillyard says ‘it is a pity’ that when the PNG LNG project finished it was not followed by another big infrastructure project.

‘Things went a little bit flat. There is probably some key staff that PNG has lost to other parts of the world.

‘But the thing is that those people like to come back home to work in PNG. So, if there is work for them, they will come back.’

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A young Papua New Guinean entrepreneur is bringing Silicon Valley to PNG to help boost financial inclusion in the country.  Day One Investments’ Shane Ninai tells Business Advantage PNG of his plans to encourage the use of the virtual currency, Bitcoin.

Day One Investments’ Shane Ninai addresses a Blockchain event in London earlier this year.

‘For the first time in history, we have the technology to bank the unbanked,’ 25-year old Shane Ninai, Managing Partner of Day One Investments, tells Business Advantage PNG.

With only 20 per cent of the country holding bank accounts, Papua New Guinea is an ideal place to create an alternative low-cost banking system, he says, but notes it is likely to take up to 10 years before the technology will become fully mainstream in PNG.

That technology is built on two emerging, internet-based platforms: the bitcoin virtual currency and Blockchain, which manages online transactions (see definitions below).

Regulation critical

‘The first step [in PNG] is to create all the regulatory “sand-boxes”,’ says Ninai, ‘which involves having the Bank of Papua New Guinea experiment with this new technology.’

In emerging markets, Ninai told a Blockchain conference in London in January, a regulator-led model is the only way to ensure that these systems have value and are transacted at scale. The regulators’ appreciation of this innovation and a willingness to experiment is key.

Why PNG?

Ninai pointed out that PNG is a country dependent on close human relationships—where $5000 dollars in cash may not mean as much as three pigs and a shell necklace.

‘Informal and alternative economies and governance systems … are deeply ingrained in our culture and are still alive and well; and the Blockchain allows us for the first time to capture this activity,’ he said in his address.

‘Day One Investments is scheduled to close its fundraising within the next month, having secured capital commitments from a reputable anchor PNG investor along with international investors.’

‘Instead of trying to fit the unbanked into a narrow financial system, Blockchain allows us to create and capture these alternative economic systems that bypass normal markets.’

Ninai says that while this technology has taken off in the US and Europe, the real value is to figure out how to get it to scale in developing nations, where people are most excluded from formal financial systems.

Entrepreneur program

In 2015, Ninai participated in the Kumul GameChangers entrepreneurship program, where he was selected for the highly competitive Silicon Valley entrepreneurial accelerator program at Draper University. After graduating, Ninai joined Draper University staff as an entrepreneur-in-residence, mentoring some 170 innovative companies.

Co-founder of Day One Investments, a Silicon Valley-based venture capital fund investing in blockchain technology companies, Ninai’s partner is Tim Draper. His company, Draper Associates, aims to transform industries with new technologies, and to build platforms for extraordinary growth, jobs, and wealth creation.

Ninai says Day One Investments is scheduled to close its fundraising within the next month, having secured capital commitments from a reputable anchor PNG investor, along with international investors.

He says he has identified East New Britain Province, where shell money is a form of accepted currency, as a potential pilot province.

‘To this day, microfinance institutions and savings and loans societies are willing to provide loans against this shell money because they recognise it as currency,’ he says.

‘For microfinance institutions, this technology has a lot of potential and that’s where we’re seeing the most interest.’

Shane Ninai will be a guest speaker at the 2017 Business Advantage Papua New Guinea Investment Conference on 7 & 8 September in Sydney.

What are Bitcoin and Blockchain?

Bitcoin is a virtual currency and payment system, which uses a software program to record and pay for things without a third-party broker, like a bank or government. Users install a bitcoin wallet app on their phone or computer, and buy the virtual currency from a bitcoin exchange. Its promoters say bitcoin is ideal for people in developing countries, who might have mobile phones but not bank accounts.

Blockchain simply refers to a bookkeeping method that chains together entries so that they are very difficult to modify later. Among the world’s leading companies now using Bitcoin and Blockchain technology are IBM, Expedia, Maersk and Dell.

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A major reform will see all Papua New Guinea’s state-owned telecommunications companies grouped under a single board for the first time. The Chairman of the new-look Kumul Telikom, Mahesh Patel, speaks exclusively to Business Advantage PNG about his board’s priorities for increased competition and ‘slashed’ internet prices.

Kumul Telikom Chairman, Mahesh Patel

PNG’s National Executive Council recently approved the merger of state-owned telecommunications companies, bmobile Vodafone (mobile) and PNG DataCo (infrastructure) under Telikom PNG, which will be renamed Kumul Telikom.

Kumul Telikom, which also owns IT services company Datec PNG and TV network EMTV, will remain a subsidiary of state-owned holding company, Kumul Consolidated Holdings.

‘The amalgamation allows for a cost-effective sharing of resources and market intelligence. It will allow us to realise cost savings and harness the synergies between the three telcos,’ noted Acting Minister for Public Enterprises Charles Abel back in February.

It will be hoped that the new-look telco will therefore be in a better condition to compete with the current market leader, Digicel PNG.

Affordable

Kumul Telikom’s Chairman, Mahesh Patel, tells Business Advantage PNG the ultimate goal is for the consumer to get affordable, low-cost internet.

‘That’s the bottom line,’ he says. ‘From my perspective as Chairman, it’s the customer first. If they’re not going to get the internet prices slashed, then, you know, what’s the point?’

Patel says once bmobile and DataCo are brought under the control of Kumul Telikom, the board will assess how best to use their assets and resources.

‘If they’re not going to get the internet prices slashed, then, you know, what’s the point?’

He says there will be a retail arm, which will provide fixed, mobile and content services, and a wholesale arm.

Funding

‘The board’s intention is to provide a one-stop shop for the consumer, but that will require a lot of planning before any decisions are made,’ says Patel.

Priorities will be a long-anticipated international undersea cable link and the continued rollout of  4G mobile phone network.

Funding of the telco’s development is an issue. Patel says Telikom and bmobile are EBITDA [Earnings before Interest, Tax, Depreciation and Amortisation]-positive’, but the problem is that government debts are ‘not allowing us to free up any cash’.

‘The restructure will not minimise competition, but actually strengthen competition.’

‘We’re looking at realigning our banking facilities now that we’ve got a firm structure. We have the capacity to borrow within our own means.

‘We have to ask ourselves how do we generate cash and, with whatever cash that is generated, where is the best use for that?

The merger is subject to review by PNG’s Independent Consumer and Competition Commission, a process Patel says Kumul Telikom will respect.

‘The restructure will not minimise competition,’ he asserts, ‘but actually strengthen competition—so that there is competition.’

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IT analysts and industry insiders tell Business Advantage PNG that the Papua New Guinea Government’s decision to merge bmobile and PNG DataCo under a Telikom PNG renamed Kumul Telikom is likely to increase competition and innovation. But the move will not be without challenges.

The merger of bmobile and DataCo with Telikom PNG, outlined in our interview with Kumul Telikom Chairman Mahesh Patel last week, will realise cost savings and harness the synergies among the three telcos, according to Public Enterprises and State Investments Minister Charles Abel.

Taragai Advisory’s Russell Woruba.

Local industry insiders appear generally optimistic about the move, with some caveats.

Independent, Port Moresby-based IT specialist Russell Woruba, of Taragai Advisory, believes the restructure will reduce prices, and observes telcos now need to provide attractive bundled services in order to be competitive.

Carriers must offer enterprises and customers not only voice and data, but media content, ICT services, such as cloud options, as well as professional services, he tells Business Advantage PNG.

He notes, however, that to modernise Telikom to meet the current technological climate it may be necessary to involve outside partners who have the skill set and capital.

He also observes that Digicel PNG not only has market share but undisputed market power.

‘It is now digging into Telikom’s core fixed business through its service offerings.

‘By consolidating its assets, Telikom, DataCo and bmobile can compete effectively and create synergies for operational efficiency.’

Masalai Communications’ Emmanuel Narokobi.

Masalai Communications’ IT specialist, Emmanuel Narokobi, sounds a note of caution about the restructure.

‘There is a huge cultural shift that needs to take place internally within all the organisations,’ he told Business Advantage PNG.

‘Personally, from our work with them we have tried to push shared services across the various companies but they still do not recognise the strategic benefits of such exercises.’

Reduced duplication

The merger is supported by a recent report issued by Singapore-based BMI Research, a subsidiary of the global ratings agency Fitch.

‘The transferring of the country’s main fixed-line and gateway assets into one entity, DataCo—which will provide backbone services and international connectivity to operators—will be positive for the market,’ says to the report’s author, Telecommunications Analyst Vanessa d’Alancon.

After DataCo’s plans to upgrade and run the National Transmission Network are completed, expected this year, she says internet service providers (ISPs) and businesses in Papua New Guinea will have access to wholesale capacity.

This will provide a boost to bandwidth and encourage market competition. That competition, she says, should reduce prices over the medium-term for consumers.

More competition for Digicel?

‘Telikom has already begun rolling out 4G at discounted rates in 2017 to encourage take-up and will be in a stronger position to compete with Digicel,’ says d’Alancon.

She warns, however, that it will be difficult for Telikom to take market share from Digicel given that operator’s strong presence in the mobile market. Digicel has been successful in the market since 2007 and has brought mobile penetration in PNG from 1.6 per cent in 2006 to around 45.5 per cent in 2016.

That said, there are still many areas where internet services are unavailable and most rural areas only have 2G services, providing significant growth opportunities.

Digicel’s view

Digicel PNG’s Brett Goschen.

Digicel’s CEO, Brett Goschen, told Business Advantage PNG that Digicel fully supports an environment where all operators have access to all forms of wholesale transmission capacity.

‘We believe it is fundamental to growing and improving a competitive, open market: prices decrease, service offerings increase and the consumer benefits tremendously.

‘It is clear that the Government’s original communication model involving the transfer of transmission assets to DataCo would go some way toward achieving that.’

That said, Goschen says, however, he is not convinced the new structure will achieve the original intentions of government, namely ‘to create a competitive, open communication industry that augurs growth and value, whilst encouraging innovation’. From the limited public information provided, he noted the new merger does not appear to promote competitive outcomes to the benefit of the consumer, such as reducing the cost of accessibility.

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Kumul Telikom Chairman Mahesh Patel says the telco is building its 4G network across Papua New Guinea, to deliver faster data speeds for both business and consumers. He tells ‘Business Advantage Boardroom’, which aired last week on national broadcaster EMTV, that the merger of bmobile-Vodafone, PNG DataCo and Telikom PNG is necessary to create efficiencies and manage technological challenges.

Kumul Telikom’s Mahesh Patel. Source: EMTV

Patel says the 4G core network is being built and the company has already started a soft introduction into the market. It should deliver significantly faster data speeds across Telikom’s telecommunications network.

‘We had a very old system, which was the CDMA system. That is being voided around the world,’ says Patel.

‘So, we have done a straight swap for the CDMA customers and the response has been tremendous. People are streaming videos and people are downloading things faster but we are still building up that network.

‘It will very soon be ready for launch and it will give a whole new experience to the customer. It will be a true 4G.’

Roll out

Patel says ‘in time’ Telikom’s service will also be rolled over to bmobile-Vodafone customers (bmobile and fellow state-owned wholesaler PNG Dataco are both now part of Telikom).

‘Right now, it will be difficult to combine all the back-end engineering together.

‘So, we will give the customers the SIM card to carry on in a parallel way going forward. Eventually, it will be merged together.

‘The guys are working behind the scenes mapping it out, testing, testing, testing.’

‘We are doing a lot of planning on paper first. We don’t want to put it into action yet because if something does go wrong you could have all the subscribers out of contact. It’s daunting and a lot of caution needs to be taken.’

Engineers

Patel says PNG DataCo and bmobile-Vodafone have ‘some of the best engineers in the country’ but he says the challenges are exacting.

‘The guys are working behind the scenes mapping it out, testing, testing, testing, because when we are out there, and have a huge number of subscribers, there is no room for error.’

‘It will take time because the terrain of Papua New Guinea is not the easiest.’

Patel says the roll out has begun in Mt Hagen, Madang and Lae, but the aim is to do it across the country.

Satellite technology

‘It is easy to get into the major centres. But we have got to realise we are a state-owned enterprise. Our service is not only to the major centres. We have got an obligation to go right down to the settlement level, to the village level.

‘It is tougher because there is a smaller population base. At some point we may have to realise there may not be a return on investment in a population of 500 people living in a remote area.

‘It will take time because the terrain of Papua New Guinea is not the easiest. We have got mountain top towers, helicopter hire is required, there are sometimes landowner issues. It’s quite a major task.’

New equipment

Patel says the 4G equipment is ‘mostly all new’. He says one reason for the merger was the need to co-locate the different technology on existing masts.

‘You do not want a tower built by bmobile-Vodafone and a tower built by PNG Telikom by the same shareholder.

‘At the moment we have got a 100-200,000 subscriber base. PNG is a country of eight million.’

‘So what we are looking at is using a single tower with different electronics on the tower. That is done worldwide.’

Efficiencies

Patel says the merger should also lead to efficiencies by combining operations like call centres and enterprise resource planning (ERP) systems.

Ultimately, though, he tells ‘Business Advantage Boardroom‘ his aim is to find new customers.

‘At the moment we have got a 100-200,000 subscriber base. PNG is a country of eight million. The opposition [Digicel PNG] has got a couple of million. So there is another six million untapped.’

‘Legacy assets, equipment have not been renewed.’

‘Each of the three entities were struggling for capital expenditure. Our motto is not to keep asking the shareholder, the government, for handouts.

‘How do we milk the assets, how do we run it as a private entity, self-finance it? And how do we provide a dividend for the government?’

Patel acknowledges that PNG Telikom has a patchy record of performance. He notes that sabotage has been a consistent problem and says the technology has sometimes been neglected.

‘Legacy assets, equipment have not been renewed. So, over the last four years we have been slowly fixing that up.’

Mahesh Patel will be a guest speaker at the Papua New Guinea Investment Conference, to be held on 7 and 8 September 2017 at the Shangri-La Hotel, Sydney.

‘Business Advantage Boardroom’ is a quarterly co-production of Business Advantage International and PNG’s national TV network, EMTV. It is broadcast as part of EMTV’s ‘Business PNG’ program.

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Which are Papua New Guinea’s favourite websites? While it’s no surprise that Google and Facebook dominate, Business Advantage PNG‘s analysis of web rankings data suggests local content is holding its own.

Search engine giant Google owns the three websites most visited by Papua New Guinea web users: google.com, google.com.pg and youtube.com. Two other Google services feature in the top 25 sites visited in PNG, according to current data from web ranking service, Alexa.

Alotau born, US-based PNG hip hop artist Jay Lieasi ranks high on Facebook

Given this, it’s not surprising to learn that Google is in the process of installing its own caching engine in Port Moresby, with the aim of speeding up its services for PNG users.

Next, in fourth place, comes Facebook, the world’s largest social network—a service as many as 370,000 Papua New Guineans now access, thanks in part to data-free deals from their mobile carrier.

(And PNG’s most popular Facebook page? That of Alotau-born, US-based hip hop artist Jay Lieasi, according to Social Bakers.)

Other major global players to appear in PNG’s top 10 are: Yahoo, Wikipedia and LinkedIn.

PNG’s top website

It’s a surprise, perhaps, to see one PNG website in the top 5. It’s not BSP, the Post-Courier, PNG Loop or even the PNG Electoral Commission (which is understandably experiencing a surge of traffic at present), although all these appear in PNG’s overall top 20.

‘Business network LinkedIn features in PNG’s top 10.’

Rather, Alexa says PNG’s top local website is that of Divine Word University. Fellow tertiary institution Unitech is close behind at No.10. One wonders how many countries in the world have places of learning as their most popular local websites. It’s quite encouraging.

These two aren’t the only way web traffic in PNG differs from Alexa’s global rankings. Business network LinkedIn features in PNG’s top 10, but globally ranks only number 25. By way of contrast, globally Twitter is the 12^th most popular website, but only just makes it into PNG’s top 50.

Local competition

There are also some interesting local match-ups, according to Alexa.

Its data suggests The Post-Courier website (No.15) is slightly more popular than that of The National (No.24); employment website pngworkforce.com is slightly more popular than pngjobseek.com; ANZ’s website is more popular than Westpac’s (although both fall well behind BSP), while Nasfund’s website is currently busier than Nambawan Super’s.

‘There is the darker side of the internet.’

There are some clear category winners, too. Most popular source of overseas news? The BBC. Most popular real estate website? Hausples.com.pg. Most popular sporting website? Nrl.com, of course!

And then there is the darker side of the internet. It’s no surprise to see illegal file sharing, gambling and porn are popular in PNG, but the prevalence of the myway.com virus, which is controlling a lot of web traffic in PNG, is quite alarming. If you’re struggling with it on your PC, you’re clearly not alone.

Rankings

Finally, it’s worth pointing out that web rankings like Alexa’s—which base their results on web traffic over the past three months—are not a predictor of future popularity but rather of past success.

Sites will rise and fall in the rankings depending on all sorts of factors—what services are deployed on a site, the emergence of competition, improvement in web speeds (PNG’s relatively slow download speeds encourage the use of a site like Savefrom.net, for example), seasonal factors, and even changes to search engine algorithms.

So, feel good if your site is up in the rankings, but don’t feel too good. The job of keeping it up there has already begun.

Top 20 PNG-related websites (source: Alexa web rankings, July 2017)

1. Divine Word University (education)
2. Loop PNG (media)
3. Lae University of Technology (education)
4. Bank South Pacific (financial services)
5. The Post-Courier (media)
6. The PNG Electoral Commission (government)
7. The National (media)
8. PNG Facts (media)
9. Telikom PNG (telecommunications)
10. PNG Blogs (politics/opinion)
11. PNG Workforce (recruitment)
12. ANZ Bank (financial services)
13. Air Niugini (transport and tourism)
14. EMTV (media)
15. PNG Job Seek (recruitment)
16. Nasfund Savings and Loan Society (financial services)
17. Investment Promotion Authority (government)
18. Department of Finance (government)
19. Digicel (telecommunications)
20. Westpac (financial services)

The post What are Papua New Guineans looking at on the Internet? appeared first on Business Advantage PNG.

Smartphone technology can transform the economy, futurist Mark Pesce told the Business Advantage Papua New Guinea Investment Conference in Sydney earlier this month. He painted a long-term picture in which digital technology will allow the country to reap the benefits of the post-industrial era.

Futurist Mark Pesce. Source: Business Advantage International

Pesce’s  goal, in a wide-ranging hour-long talk, was to show how PNG could raise its GDP per capita four-fold, to that of a medium-developed country, by 2050.

‘The smartphone is the most important tool since the invention of the metal axe handle, a few thousand years ago,’ said Pesce, who spent six months researching his presentation in collaboration with conference organiser, Business Advantage International.

‘It is a universal tool. A smartphone can be used for communication, for commerce, for education, for community, for culture. We’ve only just started to scratch the surface.’

Pesce said there should be a policy to drive up the rates of smart phone ownership.

‘The solution is to allow telcos to go into banking.’

As of January, nearly 40 per cent of Papua New Guineans owned a mobile. It’s likely that a bit more than half of these folks would own a smartphone. So, that’s a smartphone ownership rate of around maybe 25 per cent.’

The target over the next five years, he said, should be to drive the rate of smartphone ownership to 85 per cent of the population.

The increased global use, 2010-2020, of smartphones (blue) and PCs (orange). Source: Mark Pesce

Infrastructure

Pesce said it would be necessary to build up mobile infrastructure so that the entire nation has mobile coverage and mobile broadband capacity.

‘That’s a significant investment in telecoms.’

To get an adequate return on their investment, telcos would need to find revenue lines that do not primarily rely on charging heavily for minutes and data, Pesce contended.

The solution is to allow PNG’s telcos to go into banking, and banks into telecommunications. ‘Mobile money is already offered in Papua New Guinea—and it can be a powerful accelerant to the economy.

‘‘It turns money into something that is fully digital—and secure.’

‘Mobile money brings the unbanked into the banking system, and provides a pervasive payments platform for both individuals and businesses. It also creates an audit trail—which is great for the tax collector.

‘The outcome will be some of the most interesting businesses in the world, that understand both banking and communications.

‘By prioritising the infrastructure that supports sharing, and placing value on the kinds of sharing that improve the capacities and resilience of the nation, you can create a cycle of positive reinforcement that gets people and businesses doing the right thing because it does right by them.’

Innovations

Pesce said mobile money is already available, but he believes it is only in its infancy. He pointed to emerging forms of digital money such as ‘distributed ledgers, or blockchains or cryptocurrencies.’

‘It turns money into something that is fully digital—and secure. No worries about counterfeiting or cooked books. Plus, it provides a complete audit trail of all transactions.

‘Digital technology will also transform logistics in PNG.’

‘For the last several years many central banks—including some very close to Papua New Guinea—have been developing their own digital currencies. They popped up at the same time as the smartphone.

‘Individuals and businesses will be free to trade as never before. There will be no question about access to the banking system. It will all be about access to capital.’

Drones

An artists’ impression of cargo drones in action.

Pesce said that digital technology will also transform logistics in PNG over coming decades, pointing to the development ‘high capacity autonomous drones, capable of carrying several hundred kilograms.’ He said they fly themselves, are electric and are easy to operate. Prototypes are already in development, he noted.

‘The marginal cost of moving goods across Papua New Guinea will drop to a fraction of its current cost, opening up even more opportunities for trade. An autonomous drone is a smartphone with propellers.’

Farming will also be transformed in the longer term, through the use of robotics. ‘The farming robot is more than just a dumb tool. It is connected and intelligent. And it brings that intelligence to every farmer.

‘It makes the farmers smarter farmers—and more productive ones. And because it is built from off-the-shelf parts, including a smartphone, it’s not expensive.’

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Mahesh Patel, the chairman of Kumul Telikom, told the Business Advantage Papua New Guinea Investment Conference that the newly formed entity is urgently looking to build an undersea fibreoptic cable to Sydney. He said the aim is to reduce telecommunications wholesale prices by two-thirds.

Kumul Telikom’s Mahesh Patel. Source: Business Advantage International

‘It has been a bee in my bonnet since I have been Chairman,’ Patel said of the need to upgrade PNG’s oldest connection to the worldwide web, currently sited at Ela Beach in Port Moresby (a second, more modern connection, is sited in Madang).

‘We should have done it four years ago but that is water under the bridge now. We have chugged along over the last four years looking at various options.

‘It has come at a time when the economic situation is looking pretty bad. Funds have dried up, so we need to look at various options.

‘Four years ago, we could have funded it ourselves. We had the capability and capacity financially.’

Options

Patel said ‘there is huge urgency to get it started—yesterday’. The funding, he said, could come from different sources.

Representatives of PNG’s two superannuation funds, Nambawan Super and Nasfund, told the conference they would be interested in investing in the cable.

‘We have the option of private sector participation,’ Patel said. ‘The expectations of returns are obviously very high there.

‘We have the World Bank, who are keen to fund it—it is a slow process, but cheap money.

‘Sydney is very well connected, and we can get it done very quickly.’

‘We have got other private financial institutions who are looking at “build, lease and transfer”. Again, an expensive model but it can be done quickly. All three options are on the table.

‘We are looking at going to the Cabinet as early as in the next couple of weeks with a proposal to proceed.’

Pacific

Patel said the focus will be on connecting PNG directly, rather than through other Pacific Islands—one model previously being considered.

‘The most logical route always has been—it is the advice we have had from Telstra— to go directly to Sydney. Sydney is very well connected, and we can get it done very quickly.’

He said the cable would only be connected to Port Moresby. ‘The inter-island submarine cable will then connect to all the other ports [in PNG]. ‘

According to telecommunications sources, it should take a minimum of 18 months for a new cable to be operational once the project is given the green light.

Funding

Patel believes Kumul Telikom will have an improved ability to fund the project, following the government’s decision to bring all state-owned telcos—PNG Dataco, Telikom and bmobile Vodafone—under a single board.

Fibre optic cable

‘Four years ago, we had a very clean balance sheet. All the assets sat in the one box and we could go out and commercially borrow, and it could be serviced with the revenues we had.

‘But, with the split up of all the entities, it just got messier. Once we have all the assets in one box, I am sure we can go out and borrow, but it is just not happening fast enough.’

Exposure

Patel said Bmobile’s commercial relationship with Vodafone UK had been useful. Telikom’s engineers are ‘excellent’ but they ‘lack exposure to international standards’.

‘Aligning ourselves with an international operator (like Vodafone) will help our people,’ he said.

‘As soon as the undersea cable is in we will have the capacity to drop the price to the standards that they get in Australia.’

‘All we need to do is see what is happening in the rest of the world: you are talking about e-commerce, mobile apps, e-education, e-health, a whole bunch of these can be moved on to the platforms.

‘As soon as the undersea cable is in, we will have the capacity to drop the price to the standards that they get in Australia.’

Patel estimates that wholesale prices should drop by two-thirds. But to reduce the price to consumers it will be necessary to create more ISPs and ‘more retail focus’.

‘Four years ago, we had poor quality internet and people were paying 200 kina per gigabyte; today the rate is 25 kina and I think that can go down further.’

The post Kumul Telikom urgently looking to build undersea cable to Sydney, says Chairman appeared first on Business Advantage PNG.

Papua New Guinea businesses should expect income streams from October, as momentum builds towards the APEC Summit in November 2018. The Director-General of the APEC PNG 2018 Coordination Authority, Sir Charles Lepani, told the Business Advantage Papua New Guinea Investment Summit in Sydney that towns outside Port Moresby will also benefit.

Artist’s impression of APEC Haus, currently being constructed near Ela Beach in Port Moresby.

According to Lepani, hotels, small business suppliers and the informal sector should, by October, start to benefit from preparations for next year’s APEC Leaders’ Summit in Port Moresby.

Sir Charles Lepani talking about APEC 2018. Source: Business Advantage International

Lepani said the authority needed to manage expectations, noting that it would not change PNG overnight. But he said it would establish a foundation for stronger growth, bringing in much-needed foreign exchange, and raising PNG’s profile.

Already, hotels have been paid for senior delegates’ accommodation.

‘We intend to go to tender, or look for, PNG women around the country who make bilums. Each province will make bilums, but not flags, as APEC does not use flags because they are political. We hope to get about 15,000 bilums made by women for each delegate.

‘Not plastic, which would be thrown away afterwards, but real bilums that they can take home with them as gifts.’

Regional and business benefits

Where APEC Leaders will hold their summit.

Regional centres will also benefit, said Lepani, because delegates will make day trips to other parts of PNG, including Alotau and Goroka.

Airlines will also benefit, he said, with Air Niugini earning about K40–50 million moving delegates.

Engineering and building firms will benefit, he said; APEC Haus being ‘the classic example’.

Three Carnival cruise ships are being hired to provide accommodation. Wharf berth renovations will be undertaken for these liners and this will provide long-term infrastructural benefit.

‘The APEC Authority expects 15,000 delegates to attend the 2018 meetings.’

Theme

The proposed theme for the summit is ‘Creating Inclusive Opportunities, Embracing the Digital Future’.

It’s a theme, he said, that reflects the twin aims of APEC—trade liberalisation and improving infrastructure.

‘There is a call for urgent attention to social inclusion within the wealth creation and growth APEC economies,’ he said.

PNG police motorcyclist escorts in training. Credit: PNG Loop

The summit, and the ministerial and working group meetings in the lead-in, will concentrate on four key areas: extractive industry policies, tourism, structural adjustment, and how digital technology can help medium and small businesses. Agriculture, financial inclusion and women in the economy will also be topics.

Lepani said the APEC Authority expects 15,000 delegates to attend the 2018 meetings, with 9000 attending the Leaders’ Summit itself.

Thirteen Pacific Island leaders will be invited to attend the summit as observers and will have the opportunity to meet with APEC leaders. The Pacific Islands Forum will organise these meetings.

Climate change, fishing and downstream processing are other possible topics for discussion.

Staffing

Lepani said by the time of the summit the APEC Authority will reach its full strength of around 290 people. ‘We now have only 28 at the APEC Authority,’ he said.

Five VIP aircraft, including the US President’s plane, will be housed at Jacksons Airport. Talks are underway to have some official aircraft located at Cairns, ‘paid for at commercial rates’. Three hundred buses will be used to take delegates to and from their meetings.

Most media will be accommodated at the Pacific Games Village, which will be renovated, even though it is only two years old.

Key official APEC meetings in the lead-up to the summit are:

6-8 October 2017: APEC Transport Ministers’ meeting. This will be based at the Stanley Hotel and delegates will visit Alotau in Milne Bay on October 8.

5-6 December 2017: First Senior Officials Meeting

29 January–10 February 2018: Senior Officials Meeting.

23 April–5 May 2018: Senior Officials Meeting

13-28 August 2018: Senior Officials Meeting

12-18 November: Leaders’ Summit

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Papua New Guinea has the opportunity to take the lead in blockchain technologies, says the former Chief Information Officer at Kina Securities, Aaron Bird. Blockchain, he says, could be used in PNG for much more than cryptocurrencies like bitcoin.

Even if you aren’t in the technology field, you would have had to be living under a rock to have not heard anything about blockchain. Blockchain is the ‘ledger’ that enables cryptocurrencies like bitcoin to be bought and sold, and is increasingly being investigated for use in other financial types of transactions.

Aaron Bird

In the case of Papua New Guinea, it is being looked at as a method to bank the unbanked.

Eighty per cent of Papua New Guineans do not use banking facilities: some by choice, some by virtue that they don’t need it, and some just because they have no way of even getting to a bank.

There is also the requirement for banks and financial institutions to perform significant due diligence on their customers with the primary starting point being KYC (Know Your Customer).

When you open a bank account, you must have some form of approved identification, and that’s just the first hurdle. What happens when you have regionalisation of registries (e.g. births), but you have moved location?

‘Eighty per cent of people in PNG may not have access to any clear form of identification’

What if you happen to have more than one name? Or have been married in accordance with tribal or religious beliefs, but never registered that marriage—but taken another name?

Identification

Eighty per cent of people in PNG may not have access to any clear form of identification, making the governing principles of simply opening a bank account extremely difficult for the majority.

Yes, there are other forms of obtaining identification. One is the ‘vouch for’ system (highly dubious at best). There are statutory declarations but just because a Commission of Oaths has signed and stamped it doesn’t make it true.

The superannuation funds could provide a single source of ID. However they too are only just capturing the formal sector and only companies registered with the funds. Some smaller companies don’t have to contribute to super and, as we well know, SMEs are generally the backbone of any nation.

‘The National ID program was set up to resolve some of these issues.’

So, any financial inclusion program to get the unbanked banked is going to have to address how to correctly identify Papua New Guineans.

At the moment, driver licences, birth certificates and passports are the main IDs. The National ID program was set up to resolve some of these issues, but ultimately is a siloed system and it doesn’t change the PNG identity system.

It doesn’t make it easy for banks, it doesn’t make it easy for anyone.

Blockchain

I think blockchain represents a lost opportunity for PNG. The focus is certainly around financial inclusion, and the Bank of Papua New Guinea is driving a program to investigate monetary transfers via blockchain.

But we already have lots of methods to transfer monies; some have failed and some are succeeding. The Bank of Papua New Guinea-led National Payment Gateway is going to create more and more choice.

‘At its heart, blockchain is a record and customer management tool.’

Adding another choice may create more confusion for people. Unless we look seriously at internet/computer literacy we could be opening ourselves to plenty of other issues.

At least with the formal banks and microfinancing units, people have a place to point the finger if things go wrong.

At its heart, blockchain is a record and customer management tool. If we were building a new National ID system today, and using blockchain principles, the following agencies and sectors could use it:

1. Births, Deaths & Marriages
2. Customs
3. Inland Revenue Commission
4. Immigration
5. Passport Control and Issuing
6. Drivers Licensing
7. Superannuation Member ID
8. Credit Bureau
9. Finance
10. Banking
11. Telecommunication Companies
12. Companies Office
13. Elections
14. Health

It could create a single source of truth, a vehicle to allow real-time, verified payments integrating banks to customers.

IT investment

Users could apply for a passport online, because they are NID verified. They could vote in national elections with an NID authorised mobile app.

They could pay their taxes automatically; apply for finance without needing to see someone; connect a mobile phone number to the NID; and of course be able to open a bank account via a mobile phone.

There is a lot of hot air about blockchain, not only in PNG. No one wants to reinvent the wheel, especially when they have already spent millions on API (application program interface, or software protocols ) to allow integration.

The challenge is to make these companies see that IT investment, especially in technology like blockchain, isn’t a cost—it’s a priority to ensure their business is going to be around in the future.

Papua New Guinea is in a unique situation, having jumped the PC generation.  It can take advantage of technologies such as blockchain to create an integrated government/commercial record system that would be the envy of the world.

The rest of us are playing catch up. PNG has an opportunity to take the lead.

Aaron Bird is former Chief Information Officer at Kina Securities. A version of this article was first published on kiwiexpat.com and is published here by kind permission of the author.

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The Prime Minister of Australia, Malcolm Turnbull and the Prime Minister of Papua New Guinea, Peter O’Neill have announced they will be working together to lay a new undersea high speed telecommunications cable from Australia to Port Moresby. The move is expected to contribute to closer economic integration between the two neighbouring countries.

Prime Minister Malcolm Turnbull (L) and Prime Minister Peter O’Neill (R) Source: ABC

Australia is offering to deliver and majority fund the undersea cable, with a financial co-contribution from Papua New Guinea. The Australian government is in discussions with an experienced Australian telecommunications infrastructure specialist.

An underseas cable to replace the existing ageing APNG-2 cable at Port Moresby’s Ela Beach has been badly needed for some time, both to deal with PNG’s growing internet traffic and to provide redundancy for PNG’s only other international gateway, PPC-1, sited in Madang.

The Australian government has also been having close discussions with the Solomon Islands Government about laying a similar undersea cable from Australia to Honiara.

Welcome development

Jonathan Pryke, Director of the Lowy Institute’s Pacific Islands Program estimates that the cost is likely to be about US$100 million (K321 million) for a 3000-kilometre cable between Port Moresby and Sydney.

He says the move is a ‘very welcome development’ that will be a big positive for business in PNG.

‘It was getting to the point where the private sector was talking about chipping in themselves.’

‘The private sector must be very happy to finally see this actually get done. There has been discussion about this cable for so long.

‘There have been various funding options on the table. The World Bank at one stage put up a loan opportunity and China was sniffing around as well.

‘It was getting to the point where the private sector was talking about chipping in themselves to put it together because it was so desperately needed. But hopefully this just short circuits all of that. Hopefully, this will expedite it faster than any of the other options.’

Goodwill

The Lowy Institute’s Jonathan Pryke

Pryke says that the PNG government has not had ‘the fiscal breathing room’ to put in the cable.

‘I would expect this funding to be in addition to the substantial aid program that we already give to the Pacific and Solomon islands. Because that funding has already been allocated.

‘It would be pretty disruptive to carve out a massive chunk of it for the cable. That is my one concern. It should be new money from Australia.’

Pryke says the move ‘ should build a huge amount of goodwill with the private sector’. He adds that both that ‘both governments in PNG and Solomon Islands desperately want’ the technology.

Strategic implications

It also has geo-strategic implications for Australia.

‘From an Australian perspective it secures our national security concerns that we have about some of the other options on the table with definitely the Solomon Islands but also PNG,’ says Pryke.

‘Now we are making this deal we are re-establishing ourselves as a partner of choice.’

‘We didn’t want Huawei to come in and build a cable from either of these countries and connect them to critical infrastructure in Australia—our fibre network. We said as much to the Solomons Island prime minister, that we would veto the Huawei cable from Solomon Islands coming into Sydney.

Undersea cable map of PNG and the region. The existing APNG-2 and PPC-1 cables are shown in bright green. The grey lines indicate planned cables. Source: Telegeography

‘There could have been a scenario where Huawei could have come back and said: “Well, let’s just send it all to Indonesia.” It might be more expensive but that was still an option.

‘Now we are making this deal we are re-establishing ourselves as a partner of choice and it won’t be a loan. If you are the PNG government or Solomons Island and you are fiscally stretched you will take the free money. I think it is a win-win all round.

‘Most businesses in PNG have to rely on satellite and on 3G networks.’

‘When it rains in Solomon Islands the internet stops. It is just a huge hand brake on the private sector.’

Infrastructure

Pryke says it is not just the cable that is needed, the domestic infrastructure also needs to be improved. ‘It will just provide as a starting point, but the bandwidth to the capital city will be something they have not seen before.

‘The [APNG-2] cable in Port Moresby has about 5 per cent of the capacity of a modern cable. And the demand is certainly there.

‘Most businesses in PNG have to rely on satellite and on 3G networks, which are more reliable than the landline network. But the cost is just so prohibitive.

‘There are many challenges in doing business in PNG but this really seems like a low hanging fruit. It’s great that Australia has come in and done something about it.’

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IT analysts and industry insiders tell Business Advantage PNG that the Papua New Guinea Government’s decision to merge bmobile and PNG DataCo under a Telikom PNG renamed Kumul Telikom is likely to increase competition and innovation. But the move will not be without challenges.

The merger of bmobile and DataCo with Telikom PNG, outlined in our interview with Kumul Telikom Chairman Mahesh Patel last week, will realise cost savings and harness the synergies among the three telcos, according to Public Enterprises and State Investments Minister Charles Abel.

Taragai Advisory’s Russell Woruba.

Local industry insiders appear generally optimistic about the move, with some caveats.

Independent, Port Moresby-based IT specialist Russell Woruba, of Taragai Advisory, believes the restructure will reduce prices, and observes telcos now need to provide attractive bundled services in order to be competitive.

Carriers must offer enterprises and customers not only voice and data, but media content, ICT services, such as cloud options, as well as professional services, he tells Business Advantage PNG.

He notes, however, that to modernise Telikom to meet the current technological climate it may be necessary to involve outside partners who have the skill set and capital.

He also observes that Digicel PNG not only has market share but undisputed market power.

‘It is now digging into Telikom’s core fixed business through its service offerings.

‘By consolidating its assets, Telikom, DataCo and bmobile can compete effectively and create synergies for operational efficiency.’

Masalai Communications’ Emmanuel Narokobi.

Masalai Communications’ IT specialist, Emmanuel Narokobi, sounds a note of caution about the restructure.

‘There is a huge cultural shift that needs to take place internally within all the organisations,’ he told Business Advantage PNG.

‘Personally, from our work with them we have tried to push shared services across the various companies but they still do not recognise the strategic benefits of such exercises.’

Reduced duplication

The merger is supported by a recent report issued by Singapore-based BMI Research, a subsidiary of the global ratings agency Fitch.

‘The transferring of the country’s main fixed-line and gateway assets into one entity, DataCo—which will provide backbone services and international connectivity to operators—will be positive for the market,’ says to the report’s author, Telecommunications Analyst Vanessa d’Alancon.

After DataCo’s plans to upgrade and run the National Transmission Network are completed, expected this year, she says internet service providers (ISPs) and businesses in Papua New Guinea will have access to wholesale capacity.

This will provide a boost to bandwidth and encourage market competition. That competition, she says, should reduce prices over the medium-term for consumers.

More competition for Digicel?

‘Telikom has already begun rolling out 4G at discounted rates in 2017 to encourage take-up and will be in a stronger position to compete with Digicel,’ says d’Alancon.

She warns, however, that it will be difficult for Telikom to take market share from Digicel given that operator’s strong presence in the mobile market. Digicel has been successful in the market since 2007 and has brought mobile penetration in PNG from 1.6 per cent in 2006 to around 45.5 per cent in 2016.

That said, there are still many areas where internet services are unavailable and most rural areas only have 2G services, providing significant growth opportunities.

Digicel’s view

Digicel PNG’s Brett Goschen.

Digicel’s CEO, Brett Goschen, told Business Advantage PNG that Digicel fully supports an environment where all operators have access to all forms of wholesale transmission capacity.

‘We believe it is fundamental to growing and improving a competitive, open market: prices decrease, service offerings increase and the consumer benefits tremendously.

‘It is clear that the Government’s original communication model involving the transfer of transmission assets to DataCo would go some way toward achieving that.’

That said, Goschen says, however, he is not convinced the new structure will achieve the original intentions of government, namely ‘to create a competitive, open communication industry that augurs growth and value, whilst encouraging innovation’. From the limited public information provided, he noted the new merger does not appear to promote competitive outcomes to the benefit of the consumer, such as reducing the cost of accessibility.

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Kumul Telikom Chairman Mahesh Patel says the telco is building its 4G network across Papua New Guinea, to deliver faster data speeds for both business and consumers. He tells ‘Business Advantage Boardroom’, which aired last week on national broadcaster EMTV, that the merger of bmobile-Vodafone, PNG DataCo and Telikom PNG is necessary to create efficiencies and manage technological challenges.

Kumul Telikom’s Mahesh Patel. Source: EMTV

Patel says the 4G core network is being built and the company has already started a soft introduction into the market. It should deliver significantly faster data speeds across Telikom’s telecommunications network.

‘We had a very old system, which was the CDMA system. That is being voided around the world,’ says Patel.

‘So, we have done a straight swap for the CDMA customers and the response has been tremendous. People are streaming videos and people are downloading things faster but we are still building up that network.

‘It will very soon be ready for launch and it will give a whole new experience to the customer. It will be a true 4G.’

Roll out

Patel says ‘in time’ Telikom’s service will also be rolled over to bmobile-Vodafone customers (bmobile and fellow state-owned wholesaler PNG Dataco are both now part of Telikom).

‘Right now, it will be difficult to combine all the back-end engineering together.

‘So, we will give the customers the SIM card to carry on in a parallel way going forward. Eventually, it will be merged together.

‘The guys are working behind the scenes mapping it out, testing, testing, testing.’

‘We are doing a lot of planning on paper first. We don’t want to put it into action yet because if something does go wrong you could have all the subscribers out of contact. It’s daunting and a lot of caution needs to be taken.’

Engineers

Patel says PNG DataCo and bmobile-Vodafone have ‘some of the best engineers in the country’ but he says the challenges are exacting.

‘The guys are working behind the scenes mapping it out, testing, testing, testing, because when we are out there, and have a huge number of subscribers, there is no room for error.’

‘It will take time because the terrain of Papua New Guinea is not the easiest.’

Patel says the roll out has begun in Mt Hagen, Madang and Lae, but the aim is to do it across the country.

Satellite technology

‘It is easy to get into the major centres. But we have got to realise we are a state-owned enterprise. Our service is not only to the major centres. We have got an obligation to go right down to the settlement level, to the village level.

‘It is tougher because there is a smaller population base. At some point we may have to realise there may not be a return on investment in a population of 500 people living in a remote area.

‘It will take time because the terrain of Papua New Guinea is not the easiest. We have got mountain top towers, helicopter hire is required, there are sometimes landowner issues. It’s quite a major task.’

New equipment

Patel says the 4G equipment is ‘mostly all new’. He says one reason for the merger was the need to co-locate the different technology on existing masts.

‘You do not want a tower built by bmobile-Vodafone and a tower built by PNG Telikom by the same shareholder.

‘At the moment we have got a 100-200,000 subscriber base. PNG is a country of eight million.’

‘So what we are looking at is using a single tower with different electronics on the tower. That is done worldwide.’

Efficiencies

Patel says the merger should also lead to efficiencies by combining operations like call centres and enterprise resource planning (ERP) systems.

Ultimately, though, he tells ‘Business Advantage Boardroom‘ his aim is to find new customers.

‘At the moment we have got a 100-200,000 subscriber base. PNG is a country of eight million. The opposition [Digicel PNG] has got a couple of million. So there is another six million untapped.’

‘Legacy assets, equipment have not been renewed.’

‘Each of the three entities were struggling for capital expenditure. Our motto is not to keep asking the shareholder, the government, for handouts.

‘How do we milk the assets, how do we run it as a private entity, self-finance it? And how do we provide a dividend for the government?’

Patel acknowledges that PNG Telikom has a patchy record of performance. He notes that sabotage has been a consistent problem and says the technology has sometimes been neglected.

‘Legacy assets, equipment have not been renewed. So, over the last four years we have been slowly fixing that up.’

Mahesh Patel will be a guest speaker at the Papua New Guinea Investment Conference, to be held on 7 and 8 September 2017 at the Shangri-La Hotel, Sydney.

‘Business Advantage Boardroom’ is a quarterly co-production of Business Advantage International and PNG’s national TV network, EMTV. It is broadcast as part of EMTV’s ‘Business PNG’ program.

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Which are Papua New Guinea’s favourite websites? While it’s no surprise that Google and Facebook dominate, Business Advantage PNG‘s analysis of web rankings data suggests local content is holding its own.

Search engine giant Google owns the three websites most visited by Papua New Guinea web users: google.com, google.com.pg and youtube.com. Two other Google services feature in the top 25 sites visited in PNG, according to current data from web ranking service, Alexa.

Alotau born, US-based PNG hip hop artist Jay Lieasi ranks high on Facebook

Given this, it’s not surprising to learn that Google is in the process of installing its own caching engine in Port Moresby, with the aim of speeding up its services for PNG users.

Next, in fourth place, comes Facebook, the world’s largest social network—a service as many as 370,000 Papua New Guineans now access, thanks in part to data-free deals from their mobile carrier.

(And PNG’s most popular Facebook page? That of Alotau-born, US-based hip hop artist Jay Lieasi, according to Social Bakers.)

Other major global players to appear in PNG’s top 10 are: Yahoo, Wikipedia and LinkedIn.

PNG’s top website

It’s a surprise, perhaps, to see one PNG website in the top 5. It’s not BSP, the Post-Courier, PNG Loop or even the PNG Electoral Commission (which is understandably experiencing a surge of traffic at present), although all these appear in PNG’s overall top 20.

‘Business network LinkedIn features in PNG’s top 10.’

Rather, Alexa says PNG’s top local website is that of Divine Word University. Fellow tertiary institution Unitech is close behind at No.10. One wonders how many countries in the world have places of learning as their most popular local websites. It’s quite encouraging.

These two aren’t the only way web traffic in PNG differs from Alexa’s global rankings. Business network LinkedIn features in PNG’s top 10, but globally ranks only number 25. By way of contrast, globally Twitter is the 12^th most popular website, but only just makes it into PNG’s top 50.

Local competition

There are also some interesting local match-ups, according to Alexa.

Its data suggests The Post-Courier website (No.15) is slightly more popular than that of The National (No.24); employment website pngworkforce.com is slightly more popular than pngjobseek.com; ANZ’s website is more popular than Westpac’s (although both fall well behind BSP), while Nasfund’s website is currently busier than Nambawan Super’s.

‘There is the darker side of the internet.’

There are some clear category winners, too. Most popular source of overseas news? The BBC. Most popular real estate website? Hausples.com.pg. Most popular sporting website? Nrl.com, of course!

And then there is the darker side of the internet. It’s no surprise to see illegal file sharing, gambling and porn are popular in PNG, but the prevalence of the myway.com virus, which is controlling a lot of web traffic in PNG, is quite alarming. If you’re struggling with it on your PC, you’re clearly not alone.

Rankings

Finally, it’s worth pointing out that web rankings like Alexa’s—which base their results on web traffic over the past three months—are not a predictor of future popularity but rather of past success.

Sites will rise and fall in the rankings depending on all sorts of factors—what services are deployed on a site, the emergence of competition, improvement in web speeds (PNG’s relatively slow download speeds encourage the use of a site like Savefrom.net, for example), seasonal factors, and even changes to search engine algorithms.

So, feel good if your site is up in the rankings, but don’t feel too good. The job of keeping it up there has already begun.

Top 20 PNG-related websites (source: Alexa web rankings, July 2017)

1. Divine Word University (education)
2. Loop PNG (media)
3. Lae University of Technology (education)
4. Bank South Pacific (financial services)
5. The Post-Courier (media)
6. The PNG Electoral Commission (government)
7. The National (media)
8. PNG Facts (media)
9. Telikom PNG (telecommunications)
10. PNG Blogs (politics/opinion)
11. PNG Workforce (recruitment)
12. ANZ Bank (financial services)
13. Air Niugini (transport and tourism)
14. EMTV (media)
15. PNG Job Seek (recruitment)
16. Nasfund Savings and Loan Society (financial services)
17. Investment Promotion Authority (government)
18. Department of Finance (government)
19. Digicel (telecommunications)
20. Westpac (financial services)

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Smartphone technology can transform the economy, futurist Mark Pesce told the Business Advantage Papua New Guinea Investment Conference in Sydney earlier this month. He painted a long-term picture in which digital technology will allow the country to reap the benefits of the post-industrial era.

Futurist Mark Pesce. Source: Business Advantage International

Pesce’s  goal, in a wide-ranging hour-long talk, was to show how PNG could raise its GDP per capita four-fold, to that of a medium-developed country, by 2050.

‘The smartphone is the most important tool since the invention of the metal axe handle, a few thousand years ago,’ said Pesce, who spent six months researching his presentation in collaboration with conference organiser, Business Advantage International.

‘It is a universal tool. A smartphone can be used for communication, for commerce, for education, for community, for culture. We’ve only just started to scratch the surface.’

Pesce said there should be a policy to drive up the rates of smart phone ownership.

‘The solution is to allow telcos to go into banking.’

As of January, nearly 40 per cent of Papua New Guineans owned a mobile. It’s likely that a bit more than half of these folks would own a smartphone. So, that’s a smartphone ownership rate of around maybe 25 per cent.’

The target over the next five years, he said, should be to drive the rate of smartphone ownership to 85 per cent of the population.

The increased global use, 2010-2020, of smartphones (blue) and PCs (orange). Source: Mark Pesce

Infrastructure

Pesce said it would be necessary to build up mobile infrastructure so that the entire nation has mobile coverage and mobile broadband capacity.

‘That’s a significant investment in telecoms.’

To get an adequate return on their investment, telcos would need to find revenue lines that do not primarily rely on charging heavily for minutes and data, Pesce contended.

The solution is to allow PNG’s telcos to go into banking, and banks into telecommunications. ‘Mobile money is already offered in Papua New Guinea—and it can be a powerful accelerant to the economy.

‘‘It turns money into something that is fully digital—and secure.’

‘Mobile money brings the unbanked into the banking system, and provides a pervasive payments platform for both individuals and businesses. It also creates an audit trail—which is great for the tax collector.

‘The outcome will be some of the most interesting businesses in the world, that understand both banking and communications.

‘By prioritising the infrastructure that supports sharing, and placing value on the kinds of sharing that improve the capacities and resilience of the nation, you can create a cycle of positive reinforcement that gets people and businesses doing the right thing because it does right by them.’

Innovations

Pesce said mobile money is already available, but he believes it is only in its infancy. He pointed to emerging forms of digital money such as ‘distributed ledgers, or blockchains or cryptocurrencies.’

‘It turns money into something that is fully digital—and secure. No worries about counterfeiting or cooked books. Plus, it provides a complete audit trail of all transactions.

‘Digital technology will also transform logistics in PNG.’

‘For the last several years many central banks—including some very close to Papua New Guinea—have been developing their own digital currencies. They popped up at the same time as the smartphone.

‘Individuals and businesses will be free to trade as never before. There will be no question about access to the banking system. It will all be about access to capital.’

Drones

An artists’ impression of cargo drones in action.

Pesce said that digital technology will also transform logistics in PNG over coming decades, pointing to the development ‘high capacity autonomous drones, capable of carrying several hundred kilograms.’ He said they fly themselves, are electric and are easy to operate. Prototypes are already in development, he noted.

‘The marginal cost of moving goods across Papua New Guinea will drop to a fraction of its current cost, opening up even more opportunities for trade. An autonomous drone is a smartphone with propellers.’

Farming will also be transformed in the longer term, through the use of robotics. ‘The farming robot is more than just a dumb tool. It is connected and intelligent. And it brings that intelligence to every farmer.

‘It makes the farmers smarter farmers—and more productive ones. And because it is built from off-the-shelf parts, including a smartphone, it’s not expensive.’

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Mahesh Patel, the chairman of Kumul Telikom, told the Business Advantage Papua New Guinea Investment Conference that the newly formed entity is urgently looking to build an undersea fibreoptic cable to Sydney. He said the aim is to reduce telecommunications wholesale prices by two-thirds.

‘It has been a bee in my bonnet since I have been Chairman,’ Patel said of the need to upgrade PNG’s oldest connection to the worldwide web, currently sited at Ela Beach in Port Moresby (a second, more modern connection, is sited in Madang).

‘We should have done it four years ago but that is water under the bridge now. We have chugged along over the last four years looking at various options.

‘It has come at a time when the economic situation is looking pretty bad. Funds have dried up, so we need to look at various options.

‘Four years ago, we could have funded it ourselves. We had the capability and capacity financially.’

Options

Patel said ‘there is huge urgency to get it started—yesterday’. The funding, he said, could come from different sources.

Kumul Telikom’s Mahesh Patel. Source: Business Advantage International

Representatives of PNG’s two superannuation funds, Nambawan Super and Nasfund, told the conference they would be interested in investing in the cable.

‘We have the option of private sector participation,’ Patel said. ‘The expectations of returns are obviously very high there.

‘We have the World Bank, who are keen to fund it—it is a slow process, but cheap money.

‘Sydney is very well connected, and we can get it done very quickly.’

‘We have got other private financial institutions who are looking at “build, lease and transfer”. Again, an expensive model but it can be done quickly. All three options are on the table.

‘We are looking at going to the Cabinet as early as in the next couple of weeks with a proposal to proceed.’

Pacific

Patel said the focus will be on connecting PNG directly, rather than through other Pacific Islands—one model previously being considered.

‘The most logical route always has been—it is the advice we have had from Telstra— to go directly to Sydney. Sydney is very well connected, and we can get it done very quickly.’

He said the cable would only be connected to Port Moresby. ‘The inter-island submarine cable will then connect to all the other ports [in PNG]. ‘

According to telecommunications sources, it should take a minimum of 18 months for a new cable to be operational once the project is given the green light.

Funding

Patel believes Kumul Telikom will have an improved ability to fund the project, following the government’s decision to bring all state-owned telcos—PNG Dataco, Telikom and bmobile Vodafone—under a single board.

Fibre optic cable

‘Four years ago, we had a very clean balance sheet. All the assets sat in the one box and we could go out and commercially borrow, and it could be serviced with the revenues we had.

‘But, with the split up of all the entities, it just got messier. Once we have all the assets in one box, I am sure we can go out and borrow, but it is just not happening fast enough.’

Exposure

Patel said Bmobile’s commercial relationship with Vodafone UK had been useful. Telikom’s engineers are ‘excellent’ but they ‘lack exposure to international standards’.

‘Aligning ourselves with an international operator (like Vodafone) will help our people,’ he said.

‘As soon as the undersea cable is in we will have the capacity to drop the price to the standards that they get in Australia.’

‘All we need to do is see what is happening in the rest of the world: you are talking about e-commerce, mobile apps, e-education, e-health, a whole bunch of these can be moved on to the platforms.

‘As soon as the undersea cable is in, we will have the capacity to drop the price to the standards that they get in Australia.’

Patel estimates that wholesale prices should drop by two-thirds. But to reduce the price to consumers it will be necessary to create more ISPs and ‘more retail focus’.

‘Four years ago, we had poor quality internet and people were paying 200 kina per gigabyte; today the rate is 25 kina and I think that can go down further.’

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Papua New Guinea businesses should expect income streams from October, as momentum builds towards the APEC Summit in November 2018. The Director-General of the APEC PNG 2018 Coordination Authority, Sir Charles Lepani, told the Business Advantage Papua New Guinea Investment Summit in Sydney that towns outside Port Moresby will also benefit.

Artist’s impression of APEC Haus, currently being constructed near Ela Beach in Port Moresby.

According to Lepani, hotels, small business suppliers and the informal sector should, by October, start to benefit from preparations for next year’s APEC Leaders’ Summit in Port Moresby.

Sir Charles Lepani talking about APEC 2018. Source: Business Advantage International

Lepani said the authority needed to manage expectations, noting that it would not change PNG overnight. But he said it would establish a foundation for stronger growth, bringing in much-needed foreign exchange, and raising PNG’s profile.

Already, hotels have been paid for senior delegates’ accommodation.

‘We intend to go to tender, or look for, PNG women around the country who make bilums. Each province will make bilums, but not flags, as APEC does not use flags because they are political. We hope to get about 15,000 bilums made by women for each delegate.

‘Not plastic, which would be thrown away afterwards, but real bilums that they can take home with them as gifts.’

Regional and business benefits

Where APEC Leaders will hold their summit.

Regional centres will also benefit, said Lepani, because delegates will make day trips to other parts of PNG, including Alotau and Goroka.

Airlines will also benefit, he said, with Air Niugini earning about K40–50 million moving delegates.

Engineering and building firms will benefit, he said; APEC Haus being ‘the classic example’.

Three Carnival cruise ships are being hired to provide accommodation. Wharf berth renovations will be undertaken for these liners and this will provide long-term infrastructural benefit.

‘The APEC Authority expects 15,000 delegates to attend the 2018 meetings.’

Theme

The proposed theme for the summit is ‘Creating Inclusive Opportunities, Embracing the Digital Future’.

It’s a theme, he said, that reflects the twin aims of APEC—trade liberalisation and improving infrastructure.

‘There is a call for urgent attention to social inclusion within the wealth creation and growth APEC economies,’ he said.

PNG police motorcyclist escorts in training. Credit: PNG Loop

The summit, and the ministerial and working group meetings in the lead-in, will concentrate on four key areas: extractive industry policies, tourism, structural adjustment, and how digital technology can help medium and small businesses. Agriculture, financial inclusion and women in the economy will also be topics.

Lepani said the APEC Authority expects 15,000 delegates to attend the 2018 meetings, with 9000 attending the Leaders’ Summit itself.

Thirteen Pacific Island leaders will be invited to attend the summit as observers and will have the opportunity to meet with APEC leaders. The Pacific Islands Forum will organise these meetings.

Climate change, fishing and downstream processing are other possible topics for discussion.

Staffing

Lepani said by the time of the summit the APEC Authority will reach its full strength of around 290 people. ‘We now have only 28 at the APEC Authority,’ he said.

Five VIP aircraft, including the US President’s plane, will be housed at Jacksons Airport. Talks are underway to have some official aircraft located at Cairns, ‘paid for at commercial rates’. Three hundred buses will be used to take delegates to and from their meetings.

Most media will be accommodated at the Pacific Games Village, which will be renovated, even though it is only two years old.

Key official APEC meetings in the lead-up to the summit are:

6-8 October 2017: APEC Transport Ministers’ meeting. This will be based at the Stanley Hotel and delegates will visit Alotau in Milne Bay on October 8.

5-6 December 2017: First Senior Officials Meeting

29 January–10 February 2018: Senior Officials Meeting.

23 April–5 May 2018: Senior Officials Meeting

13-28 August 2018: Senior Officials Meeting

12-18 November: Leaders’ Summit

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Papua New Guinea has the opportunity to take the lead in blockchain technologies, says the former Chief Information Officer at Kina Securities, Aaron Bird. Blockchain, he says, could be used in PNG for much more than cryptocurrencies like bitcoin.

Even if you aren’t in the technology field, you would have had to be living under a rock to have not heard anything about blockchain. Blockchain is the ‘ledger’ that enables cryptocurrencies like bitcoin to be bought and sold, and is increasingly being investigated for use in other financial types of transactions.

Aaron Bird

In the case of Papua New Guinea, it is being looked at as a method to bank the unbanked.

Eighty per cent of Papua New Guineans do not use banking facilities: some by choice, some by virtue that they don’t need it, and some just because they have no way of even getting to a bank.

There is also the requirement for banks and financial institutions to perform significant due diligence on their customers with the primary starting point being KYC (Know Your Customer).

When you open a bank account, you must have some form of approved identification, and that’s just the first hurdle. What happens when you have regionalisation of registries (e.g. births), but you have moved location?

‘Eighty per cent of people in PNG may not have access to any clear form of identification’

What if you happen to have more than one name? Or have been married in accordance with tribal or religious beliefs, but never registered that marriage—but taken another name?

Identification

Eighty per cent of people in PNG may not have access to any clear form of identification, making the governing principles of simply opening a bank account extremely difficult for the majority.

Yes, there are other forms of obtaining identification. One is the ‘vouch for’ system (highly dubious at best). There are statutory declarations but just because a Commission of Oaths has signed and stamped it doesn’t make it true.

The superannuation funds could provide a single source of ID. However they too are only just capturing the formal sector and only companies registered with the funds. Some smaller companies don’t have to contribute to super and, as we well know, SMEs are generally the backbone of any nation.

‘The National ID program was set up to resolve some of these issues.’

So, any financial inclusion program to get the unbanked banked is going to have to address how to correctly identify Papua New Guineans.

At the moment, driver licences, birth certificates and passports are the main IDs. The National ID program was set up to resolve some of these issues, but ultimately is a siloed system and it doesn’t change the PNG identity system.

It doesn’t make it easy for banks, it doesn’t make it easy for anyone.

Blockchain

I think blockchain represents a lost opportunity for PNG. The focus is certainly around financial inclusion, and the Bank of Papua New Guinea is driving a program to investigate monetary transfers via blockchain.

But we already have lots of methods to transfer monies; some have failed and some are succeeding. The Bank of Papua New Guinea-led National Payment Gateway is going to create more and more choice.

‘At its heart, blockchain is a record and customer management tool.’

Adding another choice may create more confusion for people. Unless we look seriously at internet/computer literacy we could be opening ourselves to plenty of other issues.

At least with the formal banks and microfinancing units, people have a place to point the finger if things go wrong.

At its heart, blockchain is a record and customer management tool. If we were building a new National ID system today, and using blockchain principles, the following agencies and sectors could use it:

1. Births, Deaths & Marriages
2. Customs
3. Inland Revenue Commission
4. Immigration
5. Passport Control and Issuing
6. Drivers Licensing
7. Superannuation Member ID
8. Credit Bureau
9. Finance
10. Banking
11. Telecommunication Companies
12. Companies Office
13. Elections
14. Health

It could create a single source of truth, a vehicle to allow real-time, verified payments integrating banks to customers.

IT investment

Users could apply for a passport online, because they are NID verified. They could vote in national elections with an NID authorised mobile app.

They could pay their taxes automatically; apply for finance without needing to see someone; connect a mobile phone number to the NID; and of course be able to open a bank account via a mobile phone.

There is a lot of hot air about blockchain, not only in PNG. No one wants to reinvent the wheel, especially when they have already spent millions on API (application program interface, or software protocols ) to allow integration.

The challenge is to make these companies see that IT investment, especially in technology like blockchain, isn’t a cost—it’s a priority to ensure their business is going to be around in the future.

Papua New Guinea is in a unique situation, having jumped the PC generation.  It can take advantage of technologies such as blockchain to create an integrated government/commercial record system that would be the envy of the world.

The rest of us are playing catch up. PNG has an opportunity to take the lead.

Aaron Bird is former Chief Information Officer at Kina Securities. A version of this article was first published on kiwiexpat.com and is published here by kind permission of the author.

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The Prime Minister of Australia, Malcolm Turnbull and the Prime Minister of Papua New Guinea, Peter O’Neill have announced they will be working together to lay a new undersea high speed telecommunications cable from Australia to Port Moresby. The move is expected to contribute to closer economic integration between the two neighbouring countries.

Prime Minister Malcolm Turnbull (L) and Prime Minister Peter O’Neill (R) Source: ABC

Australia is offering to deliver and majority fund the undersea cable, with a financial co-contribution from Papua New Guinea. The Australian government is in discussions with an experienced Australian telecommunications infrastructure specialist.

An underseas cable to replace the existing ageing APNG-2 cable at Port Moresby’s Ela Beach has been badly needed for some time, both to deal with PNG’s growing internet traffic and to provide redundancy for PNG’s only other international gateway, PPC-1, sited in Madang.

The Australian government has also been having close discussions with the Solomon Islands Government about laying a similar undersea cable from Australia to Honiara.

Welcome development

Jonathan Pryke, Director of the Lowy Institute’s Pacific Islands Program estimates that the cost is likely to be about US$100 million (K321 million) for a 3000-kilometre cable between Port Moresby and Sydney.

He says the move is a ‘very welcome development’ that will be a big positive for business in PNG.

‘It was getting to the point where the private sector was talking about chipping in themselves.’

‘The private sector must be very happy to finally see this actually get done. There has been discussion about this cable for so long.

‘There have been various funding options on the table. The World Bank at one stage put up a loan opportunity and China was sniffing around as well.

‘It was getting to the point where the private sector was talking about chipping in themselves to put it together because it was so desperately needed. But hopefully this just short circuits all of that. Hopefully, this will expedite it faster than any of the other options.’

Goodwill

The Lowy Institute’s Jonathan Pryke

Pryke says that the PNG government has not had ‘the fiscal breathing room’ to put in the cable.

‘I would expect this funding to be in addition to the substantial aid program that we already give to the Pacific and Solomon islands. Because that funding has already been allocated.

‘It would be pretty disruptive to carve out a massive chunk of it for the cable. That is my one concern. It should be new money from Australia.’

Pryke says the move ‘ should build a huge amount of goodwill with the private sector’. He adds that both that ‘both governments in PNG and Solomon Islands desperately want’ the technology.

Strategic implications

It also has geo-strategic implications for Australia.

‘From an Australian perspective it secures our national security concerns that we have about some of the other options on the table with definitely the Solomon Islands but also PNG,’ says Pryke.

‘Now we are making this deal we are re-establishing ourselves as a partner of choice.’

‘We didn’t want Huawei to come in and build a cable from either of these countries and connect them to critical infrastructure in Australia—our fibre network. We said as much to the Solomons Island prime minister, that we would veto the Huawei cable from Solomon Islands coming into Sydney.

Undersea cable map of PNG and the region. The existing APNG-2 and PPC-1 cables are shown in bright green. The grey lines indicate planned cables. Source: Telegeography

‘There could have been a scenario where Huawei could have come back and said: “Well, let’s just send it all to Indonesia.” It might be more expensive but that was still an option.

‘Now we are making this deal we are re-establishing ourselves as a partner of choice and it won’t be a loan. If you are the PNG government or Solomons Island and you are fiscally stretched you will take the free money. I think it is a win-win all round.

‘Most businesses in PNG have to rely on satellite and on 3G networks.’

‘When it rains in Solomon Islands the internet stops. It is just a huge hand brake on the private sector.’

Infrastructure

Pryke says it is not just the cable that is needed, the domestic infrastructure also needs to be improved. ‘It will just provide as a starting point, but the bandwidth to the capital city will be something they have not seen before.

‘The [APNG-2] cable in Port Moresby has about 5 per cent of the capacity of a modern cable. And the demand is certainly there.

‘Most businesses in PNG have to rely on satellite and on 3G networks, which are more reliable than the landline network. But the cost is just so prohibitive.

‘There are many challenges in doing business in PNG but this really seems like a low hanging fruit. It’s great that Australia has come in and done something about it.’

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