Telikom Missing Link: Speech by Sir Mekere

“Missing Link No Longer Missing”: Speech by Rt Hon Mekere Morauta KCMG MP
Minister for Public Enterprises, to mark the completion of the Lae-Madang optical fibre telecommunications link, July 19 2012…

Ladies and Gentlemen, Madang is about 300 kilometres from Lae. The trip takes just under an hour, by Bird of
Paradise.

Light travels at about 300,000 kilometres per second. So the light signal that carries our messages between the
two cities over the new fibre-optic cable that we will switch on tomorrow takes 1 millisecond to complete the
journey.

In reality that is too short to make any sense at all to the ordinary man or woman such as you and I. No normal
person would notice the passing of such a brief moment in time – the journey might as well be instantaneous.
What we will notice, however, is a big improvement in our telecommunications, in particular internet access
speeds and mobile phone communications.

The activation of this cable is part of a transformation of the social and economic landscape of Papua New
Guinea – the telecommunications revolution.

Much of what is happening is a result of some visionary work done by my Government between 1999 and 2002.
My decision to introduce competition into the telecommunications sector opened the door to Digicel, and that one
decision has changed our world forever.

The take-up of mobile phones and internet services since then has revolutionized our personal and business
interactions.

Our relationship with the rest of the world and to each other will never be the same owing to our new and broad-based ease of access to knowledge and ideas, to money and resources, to new organisations and interest groups, to different cultures.

And the change is not only limited to our major cities, where in the past it has tended to be confined for very long
periods. The telecommunications revolution, most visible in the form of mobile phone towers, is spreading into
some of the most remote parts of the country.

But we could have done so much better had more reforms been undertaken, rather than being blocked or thrown
out by the Somare regime. In the past 10 years little of significance has been undertaken to repair and extend
our national physical and economic infrastructure.

Our Public Enterprises, charged with delivering some of our most important services, have been left under-funded and without policy direction; they have been abused and manipulated for political purposes, and they
have been treated as a personal fiefdom.

They have lacked the skills, the political leadership and the capital to make serious progress on providing
affordable, reliable and effective services to the people.

National development has stagnated.

My reforms since becoming Minister in August last year have focussed on giving IPBC and Public Enterprises a
strong framework on which to provide those services.

I have concentrated my efforts on giving them clear and consistent direction from government, on making sure
they are fully accountable and transparent, and that they operate on fully commercial terms.

The SOEs have now developed annual business plans and budgets and these have been approved by the IPBC
Board and National Executive Council for the very first time.

The Annual Plans and Budgets entrench within IPBC and Public Enterprises a continuous review and
improvement cycle that focus on financial efficiency and commercial discipline, good governance and due
process, and reaching acceptable levels of customer service.

Ladies and gentlemen, I hope this project is an example of how the incoming government will do business – it
clearly now has the tools to provide critical national infrastructure and affordable, reliable and efficient services.

In August last year the O’Neill-Namah Government identified this project as a priority and the IPBC board
approved the funding. At K5.6 million, the project is not big, but its impact will be very significant indeed.

It fills in what is known as the “Missing Link” in our telecommunications system between here and Madang,
where the international submarine cable comes ashore.

It uses an existing PNG Power optical fibre built to support the Ramu electricity transmission system. It involved
installing various pieces of power and telecommunications equipment and constructing support facilities along
the route.

Providing the link will allow the expansion of high-speed internet, data and voice services to private and
corporate customers across the nation.

It will also allow Telikom to go ahead with overdue repairs to the APNG international submarine
telecommunications cable, which has been operating at 50 per cent capacity for some time.
And most importantly for the future, the optical fibre link will form part of the National Transmission Network,
which IPBC recently began work on.
Revamping the national telecommunications network will make a significant contribution to national economic
development and to improved delivery of services, especially to rural and remote areas.
The National Transmission Network is essentially an integrated optical fibre, satellite and microwave network to
be controlled by a new company called DataCo, which was recently set up as part of the NTN plan.
DataCo will own and operate the network as a wholesale provider of telecommunications. It will initially consist
of:

  • Telikom’s existing domestic microwave, satellite and optical fibre network, with the international gateways (Port Moresby and Lae) and optical fibre submarine cable international links;
  •  PNG Power’s Optical Fibre Ground Wire throughout Papua New Guinea (of which this Madang link is part) and;
  •  The Government’s interest in a 750-kilometre optical fibre cable being built to support the PNG LNG project.

Other elements will include upgrades of existing telecommunications infrastructure and investment in new
infrastructure.
A feasibility study into how DataCo will manage the system has already begun.
Telikom PNG will be restructured and refinanced to become a national telecommunications retail service
provider. This role will become increasingly important given the need to provide strong competition to Digicel,
and to meet growing mobile phone demand in rural and remote areas.
It is estimated that capital funding of K500 million will be required under the NTN plan to cover the cost of assets
owned by Telikom and PNG Power, repair and maintenance of existing infrastructure, the building of new
infrastructure and the restructuring and recapitalising of Telikom.
K5 million of that funding has already been supplied by IPBC to get this K5.6 million Missing Link project
completed. Telikom did not have the funds to pay, so IPBC paid, in order to complete this much-needed link.

DataCo will be required to meet Community Service Obligations, for which a policy is being developed, and
funding may be needed to cover the CSO-driven extension of telecommunications services into areas of the
country that may not be profitable.

I am hopeful that the incoming Government will see the wisdom and enormous benefit of providing some of the
total K500 million required for the NTN through the Sovereign Wealth Fund, through a funding cell created to
recapitalise and rehabilitate SOEs, a concept I developed and recommended to the Government with exactly this
sort of application in mind.

This plan represents a new start for telecommunications, which is one of the most important drivers of national
development.

Telecommunications has been an obstacle to growth and prosperity, and the NTN plan is a way to remove that
obstacle and spur new growth.

It should be seen in the context of several other nationally significant projects that IPBC and its Public
Enterprises have, all of them much bigger than this Lae-Madang telecommunications link.

Work began two months ago on the K740-million expansion of Lae’s port capacity, with completion expected in
2015. Planning work has also begun on the relocation of the Port Moresby wharves, which is a K1 billion-plus
project.

Substantial repairs and maintenance to the Yonki power station are expected to be finished this year, and the
expansion of output through a new mini-hydro power station at the foot of the Yonki dam is expected next year.

A final feasibility study is under way for a proposed K2 billion expansion of the entire Ramu hydro scheme.
IPBC has also received approval from National Executive Council to go ahead with feasibility and planning
studies for a number of new power schemes, including the Purari River scheme.

Finally, we are at an advanced planning and feasibility stage for a significant upgrade of the Port Moresby
sewerage system.

All of these schemes are of great national significance, as well as being important to cities such as Port Moresby
and Lae.

They have the capacity to transform national, regional and local economies, providing the stimulus for economic
growth, wealth generation and a broad improvement in the quality of life of all Papua New Guineans.
I hope that turning on this small but highly significant link marks the start of a new era in national development
and service delivery to the people.

ENDS

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