Business Help Desk: DATACO answers to questions about wholesale prices on the Internet

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Explain or confirm the reduction.

Since acquiring Telikom’s wholesale business in August 2018, PNG DataCo has reduced internet wholesale prices over the years.

It is PNG DataCo’s intention to ensure that our employees and the marketplace are able to access affordable internet to meaningfully participate in this digital age.

PNG DataCo has continued to lower its prices for wholesale services over the years since acquiring Telikom’s wholesale business in August 2018. Across the various wholesale services that DataCo currently offers, including (1) WIS, (2) P2P Metro, (3) P2P Longhaul, and (4) International P2P, PNG DataCo has reduced wholesale service prices by over 66% as in shown in the table below.

The following wholesale price trend applies to the period in between July 2018 to January 2022.

Overall price reduction between July 2018 and January 2022
PRODUCT BANDWIDTH CAPACITY GROWTH PRICE REDUCTION
(Mbps) (%) 10Mbps 100Mbps
(K/Mbps) % (K/Mbps) %
Internet wholesale 2,645-27,000 921% 1,250-309 75% 1,250-270 78%
Point to point subway 105-479 356% 1,066-748 95% 748-34 95%
Point to point long haul 1,802-6,032 235% 1,266-400 68% 886-300 66%
International private rental agreement 496-1,665 236% 1,900-380 80% 1,900-214 89%

Who are the beneficiaries (wholesale customers) and how do the provided bandwidths and prices compare before and after the reduction?

As PNG DataCo is a digital wholesale service provider, DataCo currently offers wholesale services to the following group of customers:

  1. 1. Retail Service Provider (Telcos, Mobile Network Operators, Internet Service Providers (ISPs), Broadcast Service Providers, etc.) duly licensed by NICTA under the Individual Operator Licensing category.
  2. 2. Large companies duly licensed by NICTA under the Operator Class Licensing category.
  3. 3. Providers of key priority public services in the areas of health and education as part of the CSO program
  4. 4. Government Agencies and their connectivity program under the Digital Government program as part of DataCo’s CSO program.
  5. PRODUCT BANDWIDTH CAPACITY GROWTH
    (Mbps) (%)
    Internet wholesale 2,645-27,000 921%
    Point to point subway 105-479 356%
    Point to point long haul 1,802-6,032 235%
    International private rental agreement 496-1,665 236%
  6. What is the difference between Wholesale Internet Service, Point-to-Point Metro, Point-to-Point Longhaul and International Private Lease and who are the direct beneficiaries? Practical examples to explain this would be greatly appreciated.
  1. The table below shows the difference between the various fiber optic based wholesale products that PNG DataCo currently offers.
  2. Who should consumers contact if they claim that the discount is not translated?
  3. Currently, the sector-specific regulator is the National ICT Authority (NICTA), so anyone hurt by retail prices can raise their issues with NICTA. Notwithstanding this, the ICCC is the general regulator responsible for competition issues as well as a consumer watchdog and therefore any matter affecting consumer rights and concerns can also be raised with the ICCC.
    • Does DataCo Still Control ISP Pricing?

    DataCo has no direct control over the prices that retail service providers, including ISPs, offer to retail customers, other than the fact that DataCo sets the wholesale prices, which are a cost input to the prices of the retail services, provided that the ISP purchases wholesale services by DataCo.

    If that particular retail service provider purchases its wholesale services from an international vendor other than DataCo, then DataCo’s wholesale service pricing will have no indirect impact on the retail service prices offered by the retail service provider.

    • Will there be further cuts and when?

    The wholesale services provided and listed above are all declared services and therefore DataCo is committed to ensuring price reviews every year.

    Following a price review conducted in late 2021 and submitted to NICTA, PNG DataCo had reduced the prices of two of the products as follows:

    1. 1. Point-to-point Metro service reduced by over 60% and launched in November 2021; and
    2. 2. Prices for wholesale internet services have been reduced by up to 15% in January 2022.

    These price reductions were approved by NICTA in December 2021 as part of the Reference Interconnection Offer (RIO) approval.

    During the construction, management and operation of a fiber optic-based network in PNG with its geographic terrain, transport infrastructure, power infrastructure and general terms and conditions, PNG DataCo will continue to monitor and review the consumption of services that affect the cost of deployment of services and will continue to work with NICTA to ensure we meet government policy goals on accessibility and affordability.

    • How are KSCN and NTN working to facilitate this reduction?

    The NTN is the overall program for connecting all of PNG’s provincial capitals and also connecting strategic points in PNG with international hubs to ensure PNG is connected within and to the rest of the World Wide Web or the Internet.

    The KSCN is part of the NTN, which connects all coastal provincial capitals previously served only by satellite. The fiber connectivity to these sites enabled by KSCN has opened up new markets and access to broadband connectivity. The growth in demand and usage due to KSCN and other domestic connectivity such as Highlands fiber has enabled and allowed DataCo to drive down internet and wholesale prices.

    From the internet price drop graph below, you can see that the price drops are triggered by the completion of various elements of the NTN, including the KSCN.

    • With Coral Sea Cable now under DataCo, will customers expect further improvements in the quality of service provided by ISPs to end users?

    The Coral Sea Cable System (CS2) is an integral part of NTN’s overall program to connect PNG to the rest of the world. The CS2 only connects Kila Barracks in Port Moresby with Paddington in Sydney. The benefits of CS2 cannot be realized without the rest of the NTN and the other connectivity and procurement of the upstream internet in Sydney along with domestic transmission in Port Moresby and other parts of PNG via the KSCN, Highlands Fiber and the rest of the NTN to where the majority of the PNG population lives.

    General Comments

    In general, PNG DataCo has continued to reduce wholesale prices by over 60% over the past 3-4 years for the prices charged for a range of wholesale services in July 2018 through 2022. PNG DataCo understands that the cost of delivery as retail services has its own cost contributions including wholesale transmission costs. Because DataCo has lowered its prices for wholesale services, it would be incorrect to state that the retail prices charged by retail service providers are high because wholesale prices are high.

    If retail service prices have stayed high for the past 3-4 years, what happened to the cost savings that retail service providers have benefited from due to the wholesale price reductions and increased bandwidth usage triggered by their retail access networks .

    NICTA and ICCC, which are tasked with overseeing pricing as well as consumer welfare, should address this matter and other matters affecting competition to ensure retail service providers are not overcharging customers and cost savings pass on to their customers.

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