China fears over Cable to dear to use An Australian taxpayer-funded internet cable to Papua New Guinea is operating at a fraction of its capacity because it is too expensive for private sector providers to use. The Australian can reveal that the PNG section of the $136m, 4700km Coral Sea Cable system has failed to lower internet prices to the country, as promised by the Australian government, because it was handed to a struggling state-owned enterprise that is charging uncompetitive prices. Private internet retailers including the country’s main mobile company, Digicel, are reluctant to use the cable because they can get better prices and service levels from satellite providers. Digicel Pacific — the biggest mobile carrier in PNG, Vanuatu, Fiji, Solomon Islands, Tonga and Samoa — is reportedly being eyed for purchase by state-owned China Mobile, raising security concerns in Canberra. The company, which is carrying significant debt, said on Thursday no approach had been made by China Mobile or any other potential buyers, but it is understood that Digicel would be in a much stronger position if it were able to access the Coral Sea Cable at a competitive price in its biggest regional market. The cable to PNG and Solomon Islands was hastily announced by the Turnbull government in 2018 to prevent “high risk” Chinese telco Huawei building it. Australia funded two-thirds of the build, with PNG and Solomon Islands footing the rest. Foreign Minister Marise Payne said it was a “transformative project” when management of the cable was handed over to both countries last year. Sources told The Australian that PNG’s state-owned Data Co was using the project to cross-subsidise a $274m Chinese debt for a domestic cable delivered by Huawei, in a deal estimated to be 30-50 per cent overpriced. PNG’s National ICT Authority published new pricing in December for the Coral Sea Cable of $US55/megabits per second/ month, but it’s understood Data Co is refusing to pass on the new rates. It is charging wholesale rates of $US350/mbps/month for a 20mbps connection on the Coral Sea Cable, while satellite companies offer broadly equivalent packages for $US250. PNG telecommunications executive Robert Potter said the cable wasn’t delivering competitive prices to internet providers. “(The cable) should be something that is shared with the private sector and managed jointly if they want to get any private sector buy-in,” Mr Potter said. “But we missed the boat on that by only placing it with Data Co.” While satellite internet suffers from millisecond delays in data transmissions known as “latency”, it stacks up well in PNG against the cable service, which has to rely on ageing Huawei infrastructure for the “last mile” in Port Moresby and other cities. Manufacturers Council of PNG chief executive Chey Scovell said Australia had failed to include provisions in the deal to prevent the PNG government “from continually clipping the ticket of the private sector and the citizens”. “It has been a real missed opportunity and is certainly not what was envisaged, of having the internet provided at the most affordable price,” he said. “The whole idea was you were meant to leave it for the market, rather than government, to make money servicing customers.” Lowy Institute Pacific program director Jonathan Pryke said “it’s no secret that PNG’s state-owned enterprises are a mess”. “They are riddled with debt and broken systems of governance, and are victims of routine political interference. As the government is becoming more and more cash-squeezed, it is in turn squeezing the SOEs for every drop of dividends it can get — dividends that come at the cost of service provision and profitability.’’ A Department of Foreign Affairs and Trade spokesman said: “The infrastructure owner, PNG Data Co, is responsible for setting data pricing, in conjunction with the National ICT Authority.” PNG’s finances are in a parlous state, with Australia and other lenders working on a $3.3bn bailout. The Australian/PNGfacts Next : Manning's Statement On Social Media Is 'Sub Judice' : Namah Comments are closed.
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