Business Help Desk: DATACO Answers to questions about wholesale internet prices

Explain or confirm the discount.

PNG DataCo has slashed wholesale internet prices over the years since taking over Telikom’s wholesale business in August 2018.

PNG DataCo’s intention is to ensure that our employees and the market can affordably access the Internet to participate meaningfully in this digital age.

PNG DataCo has continued to cut prices for its wholesale services over the years since taking over the wholesale business from Telikom in August 2018. Among the various wholesale services DataCo currently offers include (1) WIS , (2) P2P Metro, (3) P2P Longhaul, and (4) International P2P, PNG DataCo reduced the wholesale service price by more than 66%, as shown in the table below.

The wholesale price trend below is for the period between July 2018 to January 2022.

Total overall price reduction between July 2018 and January 2022
(Mbps) (%) 10Mbps 100Mbps
(K/Mbps) % (K/Mbps) %
Wholesale Internet Services 2,645-27,000 921% 1 250-309 75% 1,250-270 78%
Point-to-point metro 105-479 356% 1 066-748 95% 748-34 95%
Long distance point to point 1 802-6 032 235% 1,266-400 68% 886-300 66%
International Private Lease 496-1,665 236% 1,900-380 80% 1 900-214 89%

Who are the beneficiaries (wholesale customers) and what are the comparisons of bandwidth and prices provided before the reduction and after the reduction?

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

  1. 1. Retail Service Providers (Telecoms, Mobile Network Operators, Internet Service Providers (ISPs), Broadcast Service Providers, etc.) that are duly licensed by NICTA under the category of Individual Operator License.
  2. 2. Large companies which are duly licensed by NICTA under the category of Operator Class Licenses.
  3. 3. Providers of key priority public health and education services as part of the CSO program
  4. 4. Government agencies and their connectivity program under the Digital Government program under DataCo’s CSO program.
    (Mbps) (%)
    Wholesale Internet Services 2,645-27,000 921%
    Point-to-point metro 105-479 356%
    Long distance point to point 1 802-6 032 235%
    International Private Lease 496-1,665 236%
  6. What is the difference between wholesale Internet service, point-to-point metro, long-distance point-to-point, and international private lease, and who are the direct benefactors? Practical examples to explain this are highly appreciated.
  1. The table below shows the difference between the different wholesale fiber products that PNG DataCo currently supplies.
  2. Who should consumers contact if it is claimed that the discount is not translated?
  3. Currently, the sector-specific regulator is the National ICT Authority (NICTA) and anyone adversely affected by retail prices can raise their concerns with NICTA. Notwithstanding this, the ICCC is the general regulator responsible for competition matters as well as a consumer watchdog and therefore any matter affecting the rights and concerns of consumers may also be raised with the ICCC.
    • Does DataCo still have control over the rates provided by ISPs?

    DataCo has no direct control over the pricing that retail service providers, including ISPs, offer retail consumers other than that DataCo sets wholesale pricing, which is a cost element of pricing for retail services, provided that the ISP acquires wholesale services. from Data Co.

    If that particular retail service provider acquires its wholesale services from another international provider other than DataCo, then DataCo’s wholesale service pricing has no indirect impact on the retail service pricing offered by the provider. retail services.

    • Will there be further reductions and when?

    The wholesale services provided and listed above are all declared services and therefore DataCo is required to provide price reviews annually.

    Following a price review undertaken at the end of 2021 and submitted to NICTA, PNG DataCo had reduced the price of two of the products as follows:

    1. 1. Point-to-point metro service has been reduced by more than 60% and implemented in November 2021; and
    2. 2. Wholesale Internet service pricing was reduced by up to 15% in January 2022.

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

    As we build, manage and operate a fiber-based network in PNG with its geographic terrain, transportation infrastructure, electrical infrastructure and general business challenges, PNG DataCo will continue to monitor and review the uptake of services that impact the cost of delivering services and will continue to work with NICTA to ensure we meet government policy goals for accessibility and affordability.

    • How do KSCN and NTN work to enable this reduction?

    The NTN is the overarching program to connect all provincial capitals in PNG and also connect strategic points in PNG to international hubs to ensure that 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 the coastal provincial capitals which were previously served only by satellite. Fiber connectivity enabled by KSCN at these locations has opened up new markets and access to broadband connectivity. Growth in demand and usage due to KSCN and other national connectivities such as Highlands Fiber has enabled and enabled DataCo to lower Internet and wholesale prices.

    From the Internet price reduction chart below, you will see that price reductions are triggered by the achievement of various elements of the NTN, including the KSCN.

    • With Coral Sea Cable now under DataCo, will customers expect to see more 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 global program to connect PNG to the rest of the world. The CS2 only connects Kila Barracks in Port Moresby to Paddington in Sydney. The benefits of CS2 cannot be realized alone without the rest of the NTN and other upstream Internet connectivity and sources in Sydney, as well as domestic transmission in Port Moresby and other parts of PNG via the KSCN, the Highlands Fiber and the rest. of the NTN to where the majority of PNG’s population resides.

    General observations

    Generally, PNG DataCo has continued to lower wholesale prices over the past 3-4 years by more than 60% for prices charged for a range of wholesale services in July 2018 through 2022. PNG DataCo understands that the cost of delivering retail services has its own cost inputs, including wholesale transmission costs. Since DataCo has reduced the prices of its wholesale services, it would be incorrect to say that the retail prices charged by the retail service providers are high because the wholesale prices are high.

    If retail service pricing has remained high over the last 3-4 years, then one wonders what happened to the cost savings that retail service providers have enjoyed due to wholesale price reductions. and the increase in bandwidth usage triggered by their retail sale. access networks.

    NICTA and ICCC, which have mandates to monitor pricing as well as consumer welfare, should address this and other issues that affect competition to ensure that service providers retail do not overcharge customers and pass the cost savings on to their customers.

About Timothy Cheatham

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