High Internet Prices Are Affected PNG's Economy, NRI Report Finds

2013 report ranks country 163 out of 169 in Internet infrastructure

By Melisha Yafoi

PORT MORESBY, Papua New Guinea (PNG Post-Courier, ) – High prices are affecting PNG's economy, said Deloitte manager Todd Mclnnis yesterday in Port Moresby when presenting the National Research Institute’s latest report on why internet rates are high in Papua New Guinea.

The report identified key issues that have caused high prices of internet rates which includes infrastructure, wholesale, regulation, retail and competition and PNG specific issues.

McInnis said that despite considerable improvements in PNG’s technological architecture including competitions, PNG’s internet infrastructure appears to be reaching its limits and remains among the lowest in the world.

According to a 2013 report by the International Telecommunication Union PNG is ranked 163 out of 169 countries in terms of internet infrastructure.

The findings however revealed that PNG had an entry level fixed broadband package estimated to cost a high 266 per cent of gross national income per capita.

"Since that time internet prices have fallen markedly," McInnis said.

"In 2014 NICTA estimated that the price of a 1GB (Gigabyte) package ranges from around 20-80 per cent of GNI per capita while current estimates suggest a 1GB package can be obtained for 10 per cent per capita.

These dramatic price reductions are likely to be driven by a number of factors, including reductions in the wholesale price which has fallen by 70 per cent over that time and increased competition in the retail market," he said.

McInnis revealed that maintenance and capital costs for internet infrastructure in PNG are considerably higher than in other countries, though by how much, still remains unclear.

"The internet market is a system, so we have looked at the issues and provided a summary. You can’t look at one issue without looking at the others. They’re all interlinked and work together."

"It’s very costly to do business in PNG due to a number of reasons and the high infrastructure maintenance costs which are a direct impact to higher prices," he said.

McInnis added that another issue is reliability or the lack of it which does not have a direct impact to prices but all contribute to a higher cost environment which obviously leads to higher prices.

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