No 60% reduction on wholesale internet tariff

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BY MAXINE KAMUS

The topic of price levels for voice telephony and data services, including Internet access, is always on the agenda for authorities and consumers.

National Information and Communication Technology Authority (NICTA) Chief Executive Officer Kila Gulo-Vui said there was no 60 percent reduction in wholesale Internet tariffs for NICTA.

Mr. Gulo-Vui told this newspaper that overall wholesale price levels were not reduced by 60 percent, however, a tariff affecting subway broadband was reduced by approximately that amount in November 2021 by PNG DataCo, which was confirmed by NICTA has been approved.

“The wholesale prices calculated by PNG DataCo for international capacity are an important determination of retail prices.

However, it is not the only one; It requires effective competition at the retail level to share the reduction in input costs through lower retail prices with customers and end users,” he said.

He said other tariffs have not been moved and the issue of price levels for voice calls and data services (including Internet access) is always on the agenda for NICTA.

“The wholesale price cut is very recent and we have yet to see how it will be processed by the retail chain.

These results are never automatic or immediate as retail market forces are at work,” Mr Gulo-Vui said.

NICTA said the 60 percent reduction doesn’t cover the entire country and not every consumer will benefit because the bulk of the connection or segment is within the metropolitan area and in areas where PNG DataCo fiber optic cable connections are reachable.

“The internet service providers (ISPs) like Digicel, Digitech and bmobile are retailers and unless Digicel buys directly from wholesaler PNG DataCo, it will not pass the reduction on to its consumers and this applies to all other IPS,” NICTA added.

Mr. Gulo-Vui added that NICTA is now finalizing its planning for a major consultation process on retail prices, due to start this month, and more information on key decisions will be released later.

PNG DataCo said DataCo provides wholesale services to retail service providers and the cost of the wholesale services is a cost input to the retail services offered by the retail service providers.

“PNG DataCo has lowered its prices for wholesale services since it acquired Telikom’s wholesale business in 2018. Across product lines, DataCo has reduced wholesale service prices by over 66 percent,” added DataCo.

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

DataCo said the latest price cuts were in product categories for the point-to-point subway service, which was reduced by 60 percent and went into effect in November 2021.

“Prices for wholesale internet services were reduced by up to 15 percent in January 2022.

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

DataCo said they believe the relevant interventions will be addressed at the wholesale level and they hope that with appropriate regulatory interventions in the retail market, retail service providers can pass some of this price reduction on to their customers.

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