Papua New Guinea Rural Communications Project

December 2, 2014

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The World Bank

Over 80% of Papua New Guinea’s population lives in rural areas, engaged mainly in subsistence-level activities such as smallholder farming, fishing, and informal work. Overall, gaps in income between urban and rural areas, and among regions, remain high, and nearly all socio-economic indicators are significantly worse in rural areas than in the cities. One of the main barriers to more equitable growth and development has been the country’s limited infrastructure, which constrains economic activity as well as service delivery.


Challenge

Access to Information and Communication Technology (ICT) infrastructure and services in PNG is among the lowest in the world, particularly in rural and remote areas. The entry of private operators and aggressive competition in the mobile sector has resulted in increased coverage and access to telecommunications services. However, operators continue to roll-out second-generation (2G) mobile services, that is, basic voice and text, in rural areas rather than third-generation (3G) or higher capacity networks that offer faster data transmission (mobile broadband). Thus, access is still limited in many rural communities, and services remain very basic.

 

Fixed broadband penetration is below 1% of the population, and remains far beyond the affordability of average citizens and small businesses. Some of the main constraints to widespread broadband Internet development in PNG include:

  • the high cost of international connectivity, due to capacity constraints as well as regulatory factors; and
  • the lack of high-capacity domestic backbone networks.

 

 

Solution

The Rural Communications Project will improve access to telecommunications infrastructure and services in rural and remote areas of Papua New Guinea.

The project will provide technical assistance to the National Information and Communications Technology Authority (NICTA) to address emerging regulatory challenges and to strengthen the competitiveness of the telecommunications market and to the Department of Communication and Information (DCI) to strengthen ICT policy development. It will help establish a universal access and service (UAS) regime and associated fund to develop regulations and operating procedures. Further, the project will finance two UAS demonstration projects using competitively-bid one-time capital subsidies to stimulate extension of ICT services to unserved and under-served areas of the country. 

 

Results

Under the first UAS demonstration project, Digicel (PNG) Limited is installing telecommunication points of contact in 59 sites across all four regions of the country; providing telecommunications services to nearly 500,000 currently unserved people in rural areas. This one-time subsidy, combined with existing initiatives by mobile operators, is expected to boost total population coverage from about 20% in 2009 to around 93% by the end of 2014.

Currently, the preparation of the second UAS demonstration project is progressing and is expected to be launched by early 2015. This will focus on the provision of broadband Internet network and services to unserved rural communities.

 

Bank contribution

The International Development Association (IDA) has contributed $15 million towards this project.


Partners

The project is being implemented by the PNG National ICT Authority (NICTA).


Moving forward

By August 2017, the project is expected to contribute to many social and economic development objectives in the country. Local businesses will experience:

  • lower communications costs and improved access to information about markets and prices;
  • increased potential for fostering ICT-enabled entrepreneurship, tourism, and establishment of new services such as e-commerce platforms and Internet cafes; and,
  • rural communities will gain easier access to information on health and education services, access to job information, and closer contact with distant family members.
  • As in many previously isolated communities around the world, women are expected to benefit from improved access to communications, including access to income-generating opportunities and to maintain family contacts.




500,000
more people in rural areas have telecommunication services