ICT expert: Internet prices may not drop

Source: The National, Wednesday, April 3,  2013

By MALUM NALU

INTERNET expert and former Telikom acting chief executive officer Noel Mobiha says there is no guarantee that internet rates will be going down, despite Telikom reducing wholesale charges by 68%.
Mobiha, a former University of Technology academic who was the first administrator for the PNG internet names registry and one of a handful of people responsible for the introduction of Internet, said it was very encouraging to hear of Telikom board chairman Mahesh Patel and CEO Charles Litau’s immediate response to drop the price by 68% – from 9t to 3t per megabyte (MB).

 Noel Mobiha

However, he added, this did not mean that users would necessarily be paying lower prices to Internet service providers (ISPs).
“It is similar to paying for water that is consumed in a house as metred by the water metre,” Mobiha explained, “or similar to paying for power as per the EsiPay power metre.
“Now, with the new rate of 3t, ISPs will be paying a lease price for a pipe size (bandwidth) connecting them and Telikom PNG.
“The issue here is: What is the condition of that contract for the bandwidth lease?
“If the lease is for a bandwidth that is going to be utilised 100% of the time, then the ISPs and subsequently the users will be the losers on this deal as they will be paying more.
“How is this so, one may ask?
“This is because statistically the ISPs download pattern averages around 30% from Telikom in a month.
“If Telikom does not consider the download patterns of the ISPs and imposes a 100% price for a bandwidth that is 30% utilised, simple math would show that the new cost would be closer to 10t per megabyte.
“This would be more expensive than what it is right now at 9t per MB.
“If, however, Telikom charges an allocated bandwidth at an utilisation factor of 30% range with an upgrade option once reached, then the rates would be as announced of 3t per MB as wholesale to the ISPs, resulting in a much cheaper rate to the end users.
“It is also important that ISPs must reflect the savings to the end users.”
Mobiha said Patel, the board, Litau and Telikom management knew that there were technical and economic issues that need addressing within Telikom.
“These issues, which are internal, must be addressed immediately so that it will improve service delivery, significantly increase speed of internet to users in PNG and subsequently give Telikom the savings to reduce costs even further,” he said.
Mobiha, who has held several key telecommunications positions since leaving Unitech in 2002, is now a freelance ICT consultant.