ECONOMIC GROWTH AND REVENUE GENERATION THROUGH DIGITAL3rd Internet Working Group 20 November 2019

The Voice of the Private Sector to the Government and the People of Papua New Guinea

By 2022, the Business Council of Papua New Guinea intends to have progressively

addressed most of the priorities in the Dashboard for Development, contained in its Development Priorities for 2017-2022 Report

Delivering Against Priorities

2017

2018

2019

2020

2021

2022

Working groups created

Focus on Agriculture, Innovation and Productivity & Employment

Launching of BCPNG

Development Priorities

2017-2022

Focus on Internet Pricing, PEP Participation, SDG

Dashboard, FIRA and Tax Submissions

1st Year to monitor, evaluate and improve

Papers on various key priorities completed

Measure impact of key priorities and explore areas

for further improvement

2nd Year to monitor, evaluate and improve

Working Groups

Energy Internet AgricultureGovernment & Regulation

Innovation

Sustainable Development Goals

Productivity & Employment

Creative Fiscal

Provision of Infrastructure & Basic Services Broadening the Industry Base

Our Focus Today

Internet Innovation Fiscal

The Voice of the Private Sector to the Government and the People of Papua New Guinea

INTERNET WORKING GROUP

Internet Working Group

BCPNG PROGRESS IN WORKING GROUP

Coral Sea Cable System set to be completed early 2020

Kumul Domestic Submarine Cable to improve capacity in 15 coastal provincial capitals

SubCom to lay an undersea internet cable connecting PNG

to Australia and Hong Kong

Focus on internet pricing

Study recently undertaken on internet pricing

modelsStudy results

to be released shortly

Business Council to advocate affordable

internet pricing with Government

TO DEVELOP STRATEGIES TO IMPROVE AND EXPAND TELECOMMUNICATIONS SYSTEMS AND SERVICES IN PNG

INTERNET INDUSTRY HIGHLIGHTS

Potential to reduce wholesale data prices by up to 80% when the cable

network systems come online

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Recommendations from Business Council initiated study

Retail Internet Prices in PNG

1. Increase Competition in Retail Markets

•PNG needs a third well-funded privately controlled company to compete against the current two operators

•Government should actively promote and pursue the entry of a new mobile operator

2. Restructure Bmobileand Telikom

•Restructure and strengthen both companies with private capital so that Board of Directors and day-to-day management and operations are privately controlled

3. Restructure Wholesale Market

•To ensure that maximum capacity is given to the retail operators at the lowest possible cost:oRestructure DataCo so

as to have private/public participation; oCoral Sea Sub Cable

should also be structured having private/public participation in the same fashion as proposed above for DataCo

4. Other Recommendations

•Government should undertake an aggressive investment program to extend and maintain the road network and the power grid, beyond the urban centers, and close the existing gap with peer countries• NICTA needs a

functioning Universal Access Program, to fund investment in rural area on access networks, and trunk/backbone segments (fibre and microwave)

Source: Retail Internet Prices in PNG – Analysis and Recommendations Presentation (Alpha Economics LLC), May 2019

Source: Retail Internet Prices in PNG – Analysis and Recommendations Presentation (Alpha Economics LLC), May 2019

Retail Internet Prices in PNG

Likely impact if recommendations are

implemented

• Retail Internet prices will decline by 50% on average by 2022

• Mobile broadband penetration is expected to increase to around 70 subscribers per 100 inhabitants from approximately 18 in 2018 (year end)

Projections of Mobile Broadband Subscribers per 100 Inhabitants

Source: Retail Internet Prices in PNG – Analysis and Recommendations Presentation (Alpha Economics LLC), May 2019

Retail Internet Prices in PNG

Likely impact if recommendations are

implemented(continued)

• Based on the prior projections, per capita GDP is expected to grow significantly, doubling the current IMF projections in the period 2020-2022

Impact on Real per Capita GDP Growth

The Voice of the Private Sector to the Government and the People of Papua New Guinea

INNOVATION WORKING GROUP

Innovation Working Group

BCPNG PROGRESS IN WORKING GROUP

Focus on

providing

business and

investment

priorities

MSMEs supportive

of digital

transformation –

added value post

APEC 2018

Realignment

of SME

Policy to a

digital focus

Deloitte to

promote

Innovation

Agenda

TO DEVELOP AN INNOVATION DEVELOPMENT FRAMEWORK

INNOVATION HIGHLIGHTS

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Significant focus on encouraging innovation in the MSME space through

TechLabs and other forums

Improved digital connectivity

will provide significant opportunities for digital-

related innovation in PNG

Emphasis on Innovation

Expos, incubators and hubs

across a range of industries

Increased opportunities for use of big data and

AI for improved business outcomes

74% use

Facebook<5% useTwitter, YouTube & Instagram

Innovation in a Digital Age

90% of internet usage is via mobile devices

Coral Sea Cable will deliver 1000 times our current capacity

Low % with access to Bank accounts, electricity andidentity docs

Low literacy rates andlittle digital information in tok pisin or tok ples

PNG has the opportunity to leapfrog into the digital era

10% of population has access to the internet

The Opportunity

High cost of data and unreliable connectivity

Where are we now?

Opportunitiesfor Mobile Social, Cloud, eCommerce, eGovernment and capacity development

SPOTLIGHT

Innovation in a Digital AgeMobile Social

Need to view initiatives through a ‘mobile first’ lens

Mobile and social must be key elements of any digital strategy

Social technologies can be leveraged for workplace productivity and collaboration

eCommerce

New opportunities for eCommercecapability

Trust in technology will need to increase

Must address logistics and despatch challenges

Develop new capabilities around digital marketing, online branding and search engine optimisation

Digital Capability

Must quickly build digital capability and knowledge to leverage the new era

Shortage of people with digital capacity currently employed in the economy

Leveraging the tech-savvy youth population to support business, government, health and education

GovernmentCloud

Reduced costs compared to licencing and infrastructure solutions

Strategic value in reduced time to market, scalabilityand innovationand agility in service offerings

Levels the playing field, paying only for what and when you need

Online portals and transactions will have a significant impact on cost and productivity

Improved interactions between Government and its citizens

Strong policy underpinning digital will be essential

A Call to Action – Immediate Focus Areas

Maximise the benefits of the digital era by ensuring data prices fall in line with increased capacity and reliability

Embrace the use of digital by Government when interacting with staff and citizens

Leverage digital as part of the education system, in accessing educational materials and resources, and building digital capability in students and teachers

Innovation in a Digital Age

With the digital era dawning in Papua New Guinea, a new world of opportunity awaits and the benefits will accrue to those who take action.

The Voice of the Private Sector to the Government and the People of Papua New Guinea

FISCAL WORKING GROUP

Fiscal Working Group

BCPNG PROGRESS IN WORKING GROUP

New working

group to advance

Quarterly

Business Report

Roundtable

Specific

alignment with

fiscal policy

issues,

particularly tax

Issues divided

into Tax Policy,

Administration

and Technical

Facilitate meetings

and draft outcomes

to DoT, and roll out

advocacy to relevant

platforms

KEY POLICY HIGHLIGHTS

Removal of GST zero-rated

status for supplies to resource companies

Tax Administration Act (TAA) gazetted in 2018 remains subject to the

provisions of the existing Tax Acts

An increase in the personal

income tax-free threshold

2019 revenue is principally funded from

tax revenues

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TO BUILD ON THE QUARTERLY BUSINESS REPORT ROUNDTABLE, ALIGNING WITH FISCAL POLICY ISSUES AND TAX

EMPOWERPEOPLE through BSP’s Savings and Budgeting Training across PNG

Financial Inclusion

Business Devskills tailored for micro (SME) environment

Since 2014 BSP trainers have trained up to

120,953participants

2019 Launch

e-Book on Instagram

Need INFRASTRUCTURE

Needreliable electricity to utilise technology

to reach rural and remote communities

130 CERTIFIED TRAINERS throughout all BSP Branches in PNG.

Key Challenges

Facilitated Training is

FREE

SPOTLIGHT

The Voice of the Private Sector to the Government and the People of Papua New Guinea

CONCLUSION

Collective actions for moving forward

Where to from here?

INTERNETGovernment to implement reforms to increase affordability and access to internet across Papua New Guinea

1INNOVATIONEconomic participation of MSMEs, private sector business and government players increased through enhanced access to digital

FISCALImproved opportunities for revenue collection for Government through increased number of active participants in the economy

2 3

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