OBG talks to Jim Miringtoro, Minister for Communication and Information Technology

Interview: Jim Miringtoro

What key information and communications technology (ICT) reforms are currently under way?

JIM MIRINGTORO: The ICT sector in Papua New Guinea developed slowly in the past since previous governments, policy makers and legislators did not understand its importance. For the last 35 years things were not in order; government departments did not work properly and resources were mismanaged and misspent, negatively impacting ICT infrastructure. Today, priorities have changed and ICT is on the rise. In 2008 the government initiated various reforms to improve all areas within the sector, singling out ICT as a priority for the medium-term development programme. The telecommunications sector is included in all seven major pillars of our national economic development strategy and is paramount in the country’s diversification policies. We are seeing the benefits of our recent corrective policies and we realise the importance of the sector for the future development of PNG.

What infrastructural updates are necessary to improve mobile phone coverage?

MIRINGTORO: PNG has lacked both focus and financing, and infrastructure development requires money. Over the last three years the government began investing in the sector. An important step was deregulation and allowing competition to flourish in the mobile telephony market by breaking the state monopoly of Telikom PNG. Consequently, three mobile companies were established. One has succeeded, one is struggling to compete and the other faded away. Given the low penetration rate of just over 30%, there is clearly great potential mobile telephony growth in PNG.

To what extent has PNG’s limited internet access impeded economic development and investment?

MIRINGTORO: ICT is, of course, a key platform that determines the further development of other economic sectors. If we fail to deliver and maintain an efficient, affordable and modern ICT infrastructure, then outside investors will find it difficult to operate here.

I believe that we are slowly moving in the right direction. Demand for telecommunications is rising, both for mobile and internet services. However, internet infrastructure is poor, and the system needs to be improved with recapitalisation and new investments.

How would the privatisation of Telikom PNG or sector liberalisation affect ICT service provision?

MIRINGTORO: Telikom PNG has been a state-owned enterprise since the country’s independence. Unfortunately, the company failed to compete and grow, and it now operates at a loss and is heavily subsidised by the government. This is similar to many state-run enterprises, not only in PNG, but in other countries as well. Profit maximisation and shareholder value were never a priority because it is a government entity. This government is making changes, developing a public-private partnership framework so that Telikom PNG can look for private stakeholders, particularly from abroad. We have already received enquiries from several interested Asian mobile operators.

How can the ministry address the growing demand for increased competition to lower prices for mobile and internet services?

MIRINGTORO: We responded to the need for competition in the mobile industry by opening it up to contenders. Three companies entered the market, of which only two remain: Digicel and BeMobile. Unfortunately, BeMobile has not penetrated the market effectively and it is underperforming. Digicel is growing rapidly, having captured 30% of the market over the last three years with no slowdown in sight. What we do not want to see is Digicel, through its success, monopolising the field and creating a non-competitive environment. We want to manage this industry prudently, so that even if Digicel dominates the sector, it cannot abuse its position. As the government, we will ensure that prices remain as low as possible.