The Prime Minister of Australia, Malcolm Turnbull and the Prime Minister of Papua New Guinea, Peter O’Neill have announced they will be working together to lay a new undersea high speed telecommunications cable from Australia to Port Moresby. The move is expected to contribute to closer economic integration between the two neighbouring countries.

Prime Minister Malcolm Turnbull (L) and Prime Minister Peter O’Neill (R) Source: ABC

Australia is offering to deliver and majority fund the undersea cable, with a financial co-contribution from Papua New Guinea. The Australian government is in discussions with an experienced Australian telecommunications infrastructure specialist.

An underseas cable to replace the existing ageing APNG-2 cable at Port Moresby’s Ela Beach has been badly needed for some time, both to deal with PNG’s growing internet traffic and to provide redundancy for PNG’s only other international gateway, PPC-1, sited in Madang.

The Australian government has also been having close discussions with the Solomon Islands Government about laying a similar undersea cable from Australia to Honiara.

Welcome development

Jonathan Pryke, Director of the Lowy Institute’s Pacific Islands Program estimates that the cost is likely to be about US$100 million (K321 million) for a 3000-kilometre cable between Port Moresby and Sydney.

He says the move is a ‘very welcome development’ that will be a big positive for business in PNG.

‘It was getting to the point where the private sector was talking about chipping in themselves.’

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‘The private sector must be very happy to finally see this actually get done. There has been discussion about this cable for so long.

‘There have been various funding options on the table. The World Bank at one stage put up a loan opportunity and China was sniffing around as well.

‘It was getting to the point where the private sector was talking about chipping in themselves to put it together because it was so desperately needed. But hopefully this just short circuits all of that. Hopefully, this will expedite it faster than any of the other options.’

Goodwill

The Lowy Institute’s Jonathan Pryke

Pryke says that the PNG government has not had ‘the fiscal breathing room’ to put in the cable.

‘I would expect this funding to be in addition to the substantial aid program that we already give to the Pacific and Solomon islands. Because that funding has already been allocated.

‘It would be pretty disruptive to carve out a massive chunk of it for the cable. That is my one concern. It should be new money from Australia.’

Pryke says the move ‘ should build a huge amount of goodwill with the private sector’. He adds that both that ‘both governments in PNG and Solomon Islands desperately want’ the technology.

Strategic implications

It also has geo-strategic implications for Australia.

‘From an Australian perspective it secures our national security concerns that we have about some of the other options on the table with definitely the Solomon Islands but also PNG,’ says Pryke.

‘Now we are making this deal we are re-establishing ourselves as a partner of choice.’

‘We didn’t want Huawei to come in and build a cable from either of these countries and connect them to critical infrastructure in Australia—our fibre network. We said as much to the Solomons Island prime minister, that we would veto the Huawei cable from Solomon Islands coming into Sydney.

Undersea cable map of PNG and the region. The existing APNG-2 and PPC-1 cables are shown in bright green. The grey lines indicate planned cables. Source: Telegeography

‘There could have been a scenario where Huawei could have come back and said: “Well, let’s just send it all to Indonesia.” It might be more expensive but that was still an option.

‘Now we are making this deal we are re-establishing ourselves as a partner of choice and it won’t be a loan. If you are the PNG government or Solomons Island and you are fiscally stretched you will take the free money. I think it is a win-win all round.

‘Most businesses in PNG have to rely on satellite and on 3G networks.’

‘When it rains in Solomon Islands the internet stops. It is just a huge hand brake on the private sector.’

Infrastructure

Pryke says it is not just the cable that is needed, the domestic infrastructure also needs to be improved. ‘It will just provide as a starting point, but the bandwidth to the capital city will be something they have not seen before.

‘The [APNG-2] cable in Port Moresby has about 5 per cent of the capacity of a modern cable. And the demand is certainly there.

‘Most businesses in PNG have to rely on satellite and on 3G networks, which are more reliable than the landline network. But the cost is just so prohibitive.

‘There are many challenges in doing business in PNG but this really seems like a low hanging fruit. It’s great that Australia has come in and done something about it.’