Case Study on the Role of Services Trade in Global Value Chains: Telecommunications in Papua New Guinea, APEC Policy Support Unit, September 2016. Read the full report here: Download 'Telecommunications in Papua New Guinea'
THIS report by the Asia-Pacific Economic Cooperation forum (APEC) examines the effects of the deregulation of Papua New Guinea’s mobile telecommunications sector, a process which began in 2007.
The Papua New Guinean government’s decision in the lead up to 2007 to end the monopoly of state-owned telecommunications provider Telikom resulted in rapid increases in mobile coverage and subscriber numbers, and sharp decreases in costs to consumers.
The improved availability and affordability of mobile phones in PNG since 2007 has brought significant social and economic changes. Hundreds of thousands of people now have access to telecommunications for the first time, and can keep in touch with friends and family.
Health benefits have also followed, as people are better able to access emergency advice and assistance. Farmers and entrepreneurs can now access new economic opportunities and face reduced information costs. Companies now benefit from significantly lower communication costs, helping to spur economic growth and promote integration into global value chains.
Alongside these benefits, the advent of widely available mobile phones has also triggered concerns. Some believe that mobile phones could encourage marital infidelity, and consumption of pornography. There is also a common perception that criminal gangs may use mobile phones to coordinate robberies.
On balance, however, most agree that access to mobile phones has largely represented a positive development in PNG.
Mobile telecommunications operators (Digicel, bmobile-vodafone and any future entrants) should continue to address network black spots, and progressively upgrade rural networks to provide internet access. Improved services will increase opportunities for economic connectivity and drive better health outcomes. Government policy settings should be optimised to encourage and enable this process.
The government should ensure healthy competition in the mobile telecommunications sector. This may involve reducing barriers to entry for additional operators. New entrants may be able to reach agreement with incumbent network operators on renting bandwidth, rather than building a parallel mobile network.
The recently announced PNG Data Co – a state-owned enterprise that will be responsible for PNG’s international submarine cables and overall telecommunications infrastructure – is considering policies that may promote cooperation between telecommunications operators, and reduce network duplication.
The government should also prioritise electrification projects in remote parts of PNG. International donors – including the World Bank – could support these efforts, as the benefits of electrification go further than just the ability to recharge mobile phones.
Donors should also consider technical assistance initiatives to support the capacities of PNG government officials to effectively promote and enable the mobile telecommunications sector. Equally important – if PNG industries are to gain the full benefits of improved communication capabilities – is continued investment in transport infrastructure.
A peripheral recommendation for the national government – and specifically for the Bank of PNG – that has been identified during the writing of this report is to increase the publication of official economic data. Better data coverage will enable useful comparisons with other economies at a similar stage of development, and will allow the government to identify initiatives that have the best chance of contributing to positive change