Workshop on Universal Access

1
Workshop on Universal Access Service (UAS)
Broadband Development

• World Bank
• 23 November 2009, Washington D.C.

2
Introductions

• Intelecon Universal Access Service (UAS),
  Regulation, ICT applications Market strategy
• UAS Policies funding strategies advisory
  services for Uganda, Botswana, Malawi,
  Mozambique, Burkina Faso, Peru, India, Nepal,
  Mongolia, Russia, Saudi Arabia
• Private sector advice, incl. Contribution of
  Mobile to Universal Access (GSMA), various
  strategic market due diligence studies
• ICT Applications Mostly recent m-banking for
  Pakistan, Mobile Money User Study for IFC
• www.inteleconresearch.com
• Consultants present
• Andy Dymond Managing Director
• Steve Esselaar Principal Telecommunications
  Consultant
• Kyle Whiting Senior ICT Consultant

3
ICT Regulation Toolkit Module 4 Universal
Access Service

• Universal Access An overview
• Regulatory reform UAS
• Overview of approaches to UAS
• UAS Policy
• Financing UAS
• UAS Programme Development Prioritization
• Competing for UAS Subsidies
• Technologies for UAS

http//www.ictregulationtoolkit.org

• Includes
• 50 page Executive Summary
• Practice Notes with case examples
• Online Reference documents

4
Outline of Workshop
5
Definitions

• Universal access (UA) ubiquitous access to
  service
• e.g., at a public place,
• also called public, community or shared access
• Universal service (US) every individual or
  household can have service, using it privately
• at home or increasingly, carried with the
  individual through wireless devices such as
  mobile phones or PDAs
• Universal access and service (UAS) the generic
  term when referring to both UA US or the
  concept
• Developing countries targeting both UA and US to
  voice
• US to voice and UA to Internet in same program

6
UAS Concepts
With increasing focus on the Internet and
broadband, awareness and ability probably need to
be added awareness of services and benefits
ability to use computers, navigate the Internet
use ICT services
7
Objectives targets
8
Importance of QoS Saudi example

• In mid/late 2008, two leading operators reached
• 39.5 of geographical area with low outdoors
  signal
• 31.5 with medium quality outdoor signal
• Population coverage
• 98 with med. Quality outdoor signal
• 96 with indoor signal
• Around 2,000 of 15,000 villages without service
• Demand survey showed 22 of villagers with
  service have poor QoS
• Therefore target indoor service

2008 mobile coverage scenarios
9
UAS targets - examples
10
Gap model theoretical framework for UAS

• Over last few years operators have bridged the
  market efficiency gap for voice
• The smart subsidy zone has narrowed
• The true access gap is typically last 2-5
  population

11
What are the key UAS trends?

• Much more ambitious goals towards e-inclusion
• Target dates compressing
• Internet more closely aligned with voice
• More experience with various approaches
• More complex interactions with other policies
• Greater interest in reaching the poor by
  commercial companies
• We will address/illustrate these throughout
  presentation

12
Much more ambitious goals

• Driven by mobile success
• Countries are achieving UA for voice and move to
  US goals for voice as mobile phone penetration
  rises
• Migration to 3G increases Internet expectation
• Household penetration more important for Internet

13
Much more ambitious goals (2)

• However, in parts of sub-Saharan Africa, voice
  access is still an issue for a considerable part
  of population

Coverage gap av. Less than 2 of population
Source Africa Infrastructure Country Diagnostic
WB study, 2008
14
Much more ambitious goals (3)

• Internet UAS objectives require broadband,
  but still a long way to go
• Focus shifts away from simple access to
• Bandwidth/speed
• ICT capacity/ ability
• Applications/services
• UAS goals will continue to rise with
  technology service development towards
  e-inclusion

15
UAS integration with other programmes

• Education
• Vanguard user to be targeted under UAS
• First priority demand the emerging generation
• Education Ministry responsible for the computer
  strategy
• e-Government / e-governance
• ICT improves administration, services, health,
  etc.
• Accountability
• Electricity
• Raises the potential for ICT demand
• Reduces the complexity cost of infrastructure
  build-out
• Microfinance and m-banking
• Allied initiatives with pro-rural and pro-poor
  direction
• m-banking regulated under Central bank but
  reliant on increasing ICT reach telecom
  operator innovation

16
Trend to e-Inclusion- ICT all sectors

• EU-centric term but is the trend globally.
• Includes both ICT and the use of ICT to achieve
  wider inclusion objectives.
• The Riga Declaration (June 2006) stresses actions
  in the following areas
• Improve digital literacy competencies
• Reduce geographical digital divides
• Use ICT to promote cultural diversity
• Promote inclusive e-government
• Use ICT to address the needs of older workers
  elderly
• Enhance e-accessibility ICT usability for
  people of all abilities, gender social
  standing.

17
UAS and broadband policies are merging
Demand led
Supply driven
UAS policies migrating to (rural) Broadband
policies
18
Main Approaches to UAS

• Traditional incumbent obligations (USOs)
• Obligation compensation (Historic superseded)
• Regulatory reform
• Several prior measures have fundamental impact on
  the achievement of UAS
• Competitive subsidy distribution (UASFs)
• Licensing and UAS
• Non-Government local community contributions
• Open access, shared facilities ICT backbones

19
Reform first

• Regulatory reform, especially competition,
  accelerates achievement of UAS regulatory
  reform is key first step in UAS policy
• Key elements include
• Modern regulatory framework (addressing
  convergence)
• Effective regulator
• Effective regulation of competition
• Interconnection and pricing
• Spectrum allocation reform
• Technology service neutral licensing
• Open access regulating dominant markets
• Taxes, import duties and fees
• Implementing UAS policies in badly regulated
  markets is highly ineffective (e.g., higher
  subsidy costs)

20
Regulatory /licensing impact on mobile growth

• Comparison for GSMA showed specific impacts of
  regulatory decisions general policy
• New competition entry
• Decision on semi-fixed vs. mobile disputes
• Weight of taxation

21
Licensing UAS

• Countries that reform their licensing regime in
  response to convergence, with technology neutral
  or unified licences, have major opportunity to
  incorporate new UAS targets
• UAS targets more easily accepted in return for
  greater flexibility of new licences
• Even without reform, newly offered licences could
  also include useful territorial and UA
  obligations to Internet broadband
• Important that those conditions are public in
  advance
• South Africas new entrant Neotel has to provide
  broadband connectivity to 5,000 public schools
  and rural medical clinics
• Competition for new spectrum based licenses
  (e.g., 3G, WiMAX)
• Mandatory roll-out targets public and school
  access requirements
• Matching attractive urban with les attractive
  regions - Anatel in Brazil used this approach for
  their 3G frequency auction (Sao Paulo paired with
  state in poor North-East etc.)

22
Enabling regulation for broadband

• Good competitive practice also applies to
  broadband look first at regulation
• Open access to dominant access networks
• Access to international connectivity capacity
• Competition, joint volume purchase or both?
• Liberalization of backbone
• Permission for wholesale
• Enforcement or inducement to sharing
  co-location
• Tax/fiscal incentives to network build-out
• Planning for converged services
• What does IP transition NGN need?
• VOIP and multi-media

23
General recommendations ITU Sept 2008

• Recognize importance of broadband formulate
  national plans, including specific targets
• Award licenses spectrum for wireless broadband
  technologies (3G, WiMAX)
• Open up the broadband market to new operators and
  stimulate competition to lower prices
• Create investment incentives in telecom sector
• Utilize universal access service funds to bring
  broadband to rural and underserved areas
• Promote development of local content
• Encourage convergence and the transition to NGN
  including adoption of regulations allowing the
  use of voice and video over broadband networks.

24
Competing for subsidies UAS Funds

• Competitive subsidy allocation mechanism smart
  subsidy (OBA)
• One-time partial subsidy that leverages
  additional commercial investment
• Subsidy minimized through competitive procedure
• Amount of money required by service provider to
  bring loss-making services to an acceptable rate
  of return over long term
• only shortfall between revenue costs is paid
• exact amount determined by bidders through
  competitive tender
• projects are selected that are commercially
  viable in the long-run after initial subsidy no
  ongoing subsidies

25
Smart subsidy OBA amount

• The amount of money required by an operator to
  bring loss-making services to an acceptable rate
  of return over the long term
• Specific services in a target area e.g.
  payphones, Internet private service in
  specified target areas
• Once-only agreement
• Business sustainable in the medium/ long term

26
How UASF OBA competition is administered

• UASF Fund Manager initially estimates the 5 or 10
  year revenues costs, and estimates the
  financial gap (Max. allowable subsidy)
• Bidders (operator-investors) make their own
  estimate - at or below the maximum allowable
  subsidy
• The total agreed subsidy will be distributed to
  the lowest bidder over a limited period (e.g. the
  first 2-3 years) and will not need to be
  repeated. The operator accepts a 5-10 year (or
  permanent) licensed obligation to provide the
  minimum level of service, but is also expected to
  expand and serve private demand in the target
  areas
• Internet Broadband less certain finances than
  voice tend to allow subsidies gt 100 of Capex
  costs

27
Use of UAS Funds

• Funds have been used for
• Meeting regional and rural service targets for
  telephony and Internet services
• Broadband and backbone development
• Supporting key users - rural schools and health
  clinics, to access the Internet
• Supporting national and local content, services
  and applications development that stimulate
  Internet take-up and usage
• ICT capacity building
• Supporting various activities related to
  regionally balanced network and service
  development, such as the creation of Internet
  Exchange Points (IXPs) and regional Internet
  points of presence (POPs)
• Around 50 countries have UASFs.

28
UAS Funds best practice advantages

• Key principles elements of best practice UASFs
• Transparent and fair means of allocating subsidy
  all operators pay proportionally equal amount
  and technology-neutral tenders give all equal
  chance to win (vs. mandating USO)
• Provides incentives for innovation and
  cost-minimization (vs. re-imbursing USO providers
  their costs)
• Pay or play in practice operators can choose
  if they want to particpate
• UASF programs developed with industry
  stakeholder consultation
• Focus on ongoing sustainability
• Independent of Government, audited publicly
  reported

29
Examples of UASF successes

• Overall too few evaluation/ impact studies on
  UASFs
• Peru, Colombia and Chile 1st generation
• Uganda - 1st in Africa leveraged mobile
• (practice note)
• Mongolia Highly successful in achieving
  operator collaboration voice broadband
• (practice note)
• India Cumbersome but transforming tower
  sharing
• Pakistan Professional successful in mobile
  and broadband projects

30
UASF total experience to date Hmmm!

• Some funds have not been allocated in a
  technology-neutral manner (e.g. India, Russia)
• Some funds have accumulated money and not
  disbursed or too little
• E.g., Malaysia, Brazil India
• In some cases, UAS programme planning and
  implementation too slow overtaken by market
  development
• No fund has been capable of distributing more
  than 2 of sector revenue

31
Key lessons - future rural broadband development

• Strong focus on improving regulation
• Technical Assistance should include assisting the
  UAS policy adoption process and the passing of
  necessary legislation and regulation as this is
  an area of delay
• Otherwise UAS projects need to be developed for
  implementation in 2-3 years and require update
  shortly before implementation
• Levies should be limited to 1-2 and allowed to
  reduce over time as UAS targets are achieved
• UASFs need stronger capacity building element and
  efficiency also explore company models
  e.g., Pakistan
• Competitive mechanism collaborative approach
  with industry can work well

32
NGO community initiatives (1)

• Bottom up approaches (vs. top-down policy driven
  initiatives)
• Most successful example are micro-finance
  entrepreneurial village phone initiatives
• Community networks
• fairly recent and few established examples
  usually small scale (i.e., solving the problem in
  one community, not nation-wide) depend on local
  leadership/champion
• Too complex for effective national programs
• Telecentres
• wide range of models mixed record but
  successful if there is a network of telecentres,
  financing model that secures ongoing
  sustainability
• good Internet connectivity essential best to
  follow UAS infrastructure projects

33
NGO community initiatives (2)

• Community radio or local radio
• Local radios connected to the Internet are
  successful intermediaries in community to
  overcome issues of pre-literacy, lack of ICT
  training and language barriers
• Co-operatives
• Only thrive in handful of countries require
  certain conditions
• Regional or rural operators
• Limited experience (e.g., Nigeria, South Africa)
  difficult -require special/strong regulation to
  be protected from bigger players
• Temporary phenomenon become national operators
  (through acquisition or own drive to grow)
• Possible tool to introduce more competition
  also for broadband cover rural area first and
  then be allowed to provide national service

34
Backbone development open access

• Important because
• Limited ICT access if backbone does not reach all
  parts of country
• Challenge with single backbone access for all
  at reasonable cost-based prices
• Increased demand for bandwidth capacity
  investment costs for NGNs can potentially create
  bottlenecks
• Increased attention on backbone
  development some UASFs have financed backbone
  transmission extensions (e.g., Chile,
  Pakistan, Nigeria)

35
Backbone development open access (2)

• Opening networks of dominant operators to
  wholesale service provision non-discriminatory
  access pricing
• Through price regulation (least invasive) to
  functional, operational or structural separation
  (costly and complex)
• Backbone extensions via competitive UASF bid
• Many UASF projects already included backbone
  extensions and open access policies (Nigeria,
  Uganda, Mongolia)
• Alternative network options
• If not already liberalized, license alternative
  network operators (electricity, gas, railway) and
  allow existing operator to sell excess capacity
• Building new wholesale backbone-only networks
• Have been considered, few existing examples
  (Canada, EU) best operated independent of
  existing operators, wholesale only and open access

36
Backbone development open access (3)

• Infrastructure sharing form of open access
• Indias USOF identified locations for 11,000
  rural mobile infrastructure towers, buildings
  power supply (passive infrastructure) to be
  shared by multiple operators
• Consulted with the industry and secured broad
  support
• Competition for 5 year subsidy was successful and
  bids were below the reserve price mostly bid
  by independent tower operation companies
• Separate competition for 3 mobile operators to
  use each tower was overwhelmingly successful
  negative bids (no net subsidy required)

37
Tower sharing for broadband deployment

• Much of the voice telephony needs in rural areas
  met by mobile service
• Digital Backbone links all sites
• Fibre or microwave
• Can be developed for broadband
• Initial demand for Internet services mostly in
  vicinity of small towns district centres,
• Use GSM EDGE, CDMA, 3G, Wi-Fi, WiMAX type
  wireless from same towers
• How far will broadband reach?
• Smaller operating radius (lt5Km)
• Need more sites? (depends on Min Bandwidth
  specification)
• Open Access to towers a key UAS policy tool

38
Voice Internet situations Saudi case
39
Financing UAS broadband

• Government aid for ICT infrastructure has
  diminished
• e.g., OECD USD 1.2 billion in 1990 to 200
  million in 2002
• However, some major broadband investments now
  underway USA, UK, Finland
• In developing countries, mainly private sector
  funded UAS achievement
• through commercial drive
• through UASFs
• Through philanthropic/commercial/NGO initiatives
  (e.g., GSMA Development Fund, Grameen Phone)
• Donor focus on policy regulatory support, ICT
  service applications and capacity development
• Will this be enough for broadband development?

40
Issues of cost versus speed / bandwidthFactors
emerging in Saudi UAS consultation

• Broadband coverage dependent on
• Bandwidth required
• Capacity usage demand per cell
• Frequency of wireless signal
• Targeting 512 kbps could cost 3x 128 kbps due to
• Technical Options - 2G (e.g., EDGE) versus 3G
  (HSPA)
• Frequency Spectrum policy
• Thus broadband UAS could depend on spectrum
  policy
• 900 MHz versus 1800/2100 MHz
• GSM only versus technological neutrality
• Whether WiMAX licensing opportunity is leveraged
  to achieve rural roll-out

41
Financing UAS broadband (2)

• Compared to telecom, more money is also needed
  for
• Providing public Internet/broadband centres
  throughout the country
• Improving PC penetration through PC loan/ grant
  programs to increase broadband subscriptions
• ICT capacity building campaigns
• Accelerating e-gov services for rural/ poor
  population (possibly initially through mobile
  SMS)
• But remember some e-applications (e.g.,
  m-money) are not necessarily bandwidth hungry

42
Philippines hindrance is demand applications
Major operator financials 2008 Similar capex
amounts for 2009

• Finance supply capacity not the issues in this
  case GSM coverage is 99 of population could
  be leveraged
• However, broadband uptake mainly hindered by
• Computers (USD 292) not affordable for large
  majority but could afford to pay over 2 years
  could afford usage
• Government not advanced with own connectivity
  (e.g., only now connecting all high schools to
  Internet)
• Government not advanced with implementing e-gov
  services for the general population
• Challenges are affordability of Internet access
  device ICT capacity useful applications
  services

43
Broadband e-applications

• Broadband benefits
• Review of broadband issues challenges
• Overview of broadband strategy options
• Best practice responses
• Country case examples

44
Broadband e-applications

• What has changed with the advent of broadband?
• The need for speed new digital divide

No fixed UAS speed will constantly increase
(20) (30) (50) (50)
Mbps
Data ITU Sept 2008
45
Benchmarking Study in 2009 for S. Arabia

• Minimum download speed at the customer level in
  rural (UAS) programs
• Consider the incremental costs of bandwidth in
  rural areas (bandwidth versus radius)

46
The benefits of broadband

• Measuring impact of broadband still in early
  phase few quantifiable and internationally
  comparable data
• Currently restricted mostly to developed nations
• However, findings so far support
• ICT sector growth macro-economic multiplier
• Productivity gains, growth in employment, growth
  in businesses
• Transformation of how individuals, companies
  government work, communicate and interact
• Reduction in pollution (due to reduced travel)
• Potential socio-economic impact significant
• Expected benefits especially in education
  health delivery improved governance
  transparency

47
The benefits of broadband (2)

• While specific proof of broadband benefits for
  developing countries and their impact on poverty,
  hunger and sickness still outstanding, countries
  cannot afford to wait as they lack already behind
  in their ICT development
• Options include
• Piloting of broadband ICT e-applications
  projects
• Strategic/tactical use of mobile SMS to introduce
  e-gov services which then can migrate to
  broadband for more complex service
• Example Telehealth in Philippines started with
  computers Internet to district hospitals, but
  there was no need/ demand Doctors who needed
  help were young doctors in really rural and
  marginalized areas, but there was no
  connectivity
• Telehealth program switched to mobile and SMS,
  even e-mail photos using GPRS highly
  successful

48
Key challenges for broadband development

• Physical network infrastructure (or access) at
  the margins
• Rural developing regions
• High costs for establishment service provision
  in non-urban markets
• Operator interest and viability of subsidy
• Lack of competition in service provision?
• Weak demand lack of affordability for Broadband
  service?
• Computer literacy and training
• IT skills, e-applications Desktop PC/internet
  infrastructure needed

49
Four approaches to Broadband Policy

• These address the main obstacles to broadband
  development
• Not necessarily exclusive to one another
• May be pursued in combination

50
Issue (1) Lack of Infrastructure supply

• Challenges
• Lack of network infrastructure at the margins -
  fixed-line copper, fiber wireless
• Poor competition access to existing network
  infrastructure
• High costs of infrastructure operation are
  barriers to investment user uptake in rural
  areas
• Lower populations, distance and geographic
  constraints
• Best Practice responses
• Progressive regulation and open access policies
• Public-Private-Partnerships for network
  establishment
• Subsidies through competitive bidding
• Government purchase and use of bandwidth

51
Issue (1) Infrastructure Smart Subsidies
Competitive Tendering OBA Approach

• Smart Subsidy Approach
• One-time subsidies, non-distortion of markets
• Open to both infrastructure and service providers
  foreign and local
• Stakeholder input into design
• Bundling of Strategic Regions
• Strategies to ensure subsidies are tied to both
  commercially promising and challenging regions
• Competitive Bid Process
• Formulation of bid design with stakeholders
• Clearly outline eligibility criteria
  requirements
• Use of least subsidy or reverse auction approach

52
Issue (1) Infrastructure - Case Example
Province of Alberta Supernet

• Challenge Lack of infrastructure affordability
  in rural areas important resource-based economy
• Approach
• PPP between government consortium of network
  builder (Bell) network operator/reseller
  (Axia) build-operate (BO) type agreement
• USD 157 million government USD 102 million
  private sector with 10 year renewable contract
  for operation
• Axia Open Access Model standard bandwidth price
  for all users
• Government applications health facilities,
  regional offices, schools
• Rural ISP
• Outcomes
• Bandwidth prices same for all ISP ASP company
  similar to urban rates
• Rural network publicly owned operating contract
  renegotiable on term
• Increase from 7 rural ISPs to 100 now

53
Issue (1) Infrastructure - Case ExampleChilean
BackBone Network financed by smart subsidy

• Challenge Lack of open access physical
  infrastructure to reach rural areas Alternative
  approaches required to reach rural areas
• Approach
• Arica to Puerto Montt North South Fibre
  Backbone
• Competitive bidding conducted by Chilean
  Regulator Subtel
• 4.7 million US with 2.6 million US subsidy from
  Telecom Development Fund
• Outcomes
• Awarded July 2007 to 3rd Operator Telefonica del
  Sur (Telsur) requirements for open access
• Innovative agreement established with operators
  Telsur Movistar November 2008
• Favorable roaming arrangements expansion of
  their combined mobile and wireless coverage

54
Issue (1) Infrastructure Case ExampleSri
Lanka National Communications Backbone Network

• Main Challenge Lack of open access to existing
  networks due to incumbent operator positions
• Approach
• Regulator TRC and ICT Authority (ICTA) conducting
  competitive bids using Smart subsidy and
  Output-based Aid approach
• Reformed regulatory framework in areas of
  interconnection, tariffs, infrastructure sharing,
  regulatory fees, and service reselling
• Outcomes
• Subsidy funds drawn from e-Government project
  funding e-Sri Lanka Initiative
• Support for conducting evaluating bids provided
  via Public Private Infrastructure Advisory
  Facility
• Network integrated with Lanka Government Network
  (LGN) e-Government project 325 government
  offices connected including WAN access IT
  capacity skills training for staff

55
Issue (2) Lack of Critical Demand

• Challenges
• Low demand for Broadband considered due to lack
  of common and locally useful broadband
  applications
• Large of internet users dialup, lower demand in
  rural areas
• Lack of broadband traffic constraining public
  exposure market entry by service providers
• Barriers Price point limited applications
  relevant to local circumstances

56
Issue (2) Stimulate Demand for Broadband

• Solutions
• Establish support development of broadband
  applications in government operations and public
  service provision which include
• e-Government applications and networked
  government information system
• e-procurement systems for local businesses
• Subsidize bandwidth and interconnection costs for
  broadband in high cost areas
• Desired outcomes
• Stimulate greater use and interaction of public
  with useful broadband e-Government applications
• Local capacity building institutions, e.g.
  schools and IT-based business incubators, more
  active
• Greater local appreciation and demand for
  broadband

57
Malaysias National Broadband Plan, 2004
Issue (2) Stimulating Demand - Case Example

• Strategy
• Broadband Policy - Key pillar of 2006 National
  ICT Knowledge Society Strategy MyICMs 886
• Critical Mass Approach - Create Tipping Point
  for Demand
• Fund broadband applications to attain critical
  subscriber penetration rates (50 household) or
  1.3 million subscribers by 2010
• Fund public broadband applications to critical
  subscriber level to initiate wide-spread private
  sector uptake
• Government departments (EGNET) hospitals
  clinics public schools (SchoolNet) universities
  and internet community centres
• Implement a 11.3 billion Ringgit national
  broadband network funded (2.4 billion) by the
  Malaysian Government as a PPP

58
Malaysias National Broadband Plan (Contd)
Issue (2) Stimulating Demand - Case Example

• Regulatory measures
• Mandate BB access nationwide, and fund designated
  remote rural areas under UAS program (USP)
• Establish facilitative role of local authorities
  to speed up e-infrastructure projects
• Incentives
• Tax rebates for broadband equipment PCs soft
  loans for ISP rollout
• Support shared use of private networks(MNCs)
• Outcomes
• Achieved increase in household penetration rate
  to current 18
• Updated Broadband Plan due 2008/2009
• Realized plan for the enhanced national broadband
  backbone network
• Sept 2008 the PPP agreement signed between
  Government Telekom Malaysia

59
Issue (3) Lack of Core IT Capacities

• Challenge
• Low demand for Broadband considered problem of
  lack of IT skills basic PC/internet
  infrastructure
• Issues for developing regions and rural areas
• Lack of access to useful applications core IT
  hardware Networked PCs
• Limited IT skills and capacities

60
Building Core IT Capacities for Demand
Issue (3) Lack of Core IT Capacities

• Solutions
• Programs to provide needed IT infrastructure,
  capacity development and training to public and
  community institutions
• Provision of internet-enabled PCs broadband
  connection to public schools and community
  institutions
• Establish e-Government services and applications
  for local needs
• Basic computer and internet skills training and
  capacity development to targeted groups
• Desired outcomes
• Develop IT and internet skills to stimulate
  demand among high-impact users including local
  businesses and youth
• Develop IT capacities and infrastructure at
  public access points businesses e.g. schools,
  community centres chambers of commerce

61
Thailand Building Core Capacities for
Broadband
Issue (3) Core Capacities Case example

• Approaches
• Thailands ICT Directions 2004 Policy - To
  improve ICT skills and access to ICTs for all
  Thais to benefit from information
• Provision of necessary IT hardware internet
  connectivity
• Subsidized PCs software for purchase lowered
  long-distance rates for internet establishment
  of public internet booths with dialup internet
  access
• Encourage telecom operators to expand
  wired/wireless communication services in rural
  areas i.e. rural telephone project
• Provide educational and local content - Tambon
  and Schoolnet projects to provide internet access
  to village groups and public schools
• Outcomes
• Increased PC penetration from 5 in 2001 to 27
  in 2005

62
Issue (4) Regulatory impediments

• Challenges
• Restricted competition
• poor access to incumbent network
• lack of new service providers
• License limitations
• Cost barriers network/spectrum access,
  interconnection fees
• Limited ability to utilize innovative and
  converging technologies e.g., service bundling,
  VOIP, etc.

63
Issue (4) Enabling Regulation

• Best Practice solution improve policy
  regulatory frameworks
• Deregulation - open up service provision to
  multiple operators
• Open access enforcement of RIO,
  interconnection, spectrum allocation
• Progressive Licensing, e.g., unified licensing
• Targeted subsidies for new entrants challenging
  areas
• Establish utilize UAS/government programs

64
Issue (4) Enabling Regulation Case
ExamplePakistan

• Challenges Broadband expansion needs
  opportunities
• Expanded network infrastructure local internet
  content/applications IT capacity development
• Capitalize on dramatic expansion of
  mobile/wireless network
• High tariffs considered main impediment
• Approaches
• Establishment of formal policies i.e., Broadband
  Policy 2004
• Utilize UAS funds for targeted support and
  subsidy
• Encourage entry and growth of new service
  providers
• No restriction on number of broadband providers
  (must meet minimum QOS standards )
• Backhaul facilitation
• Subsidies for intl. bandwidth for startup period
  in project areas services in rural areas, i.e.,
  rural telephone project

65
Issue (4) Enabling Regulation Case Example
Pakistan (Cont.)

• Spectrum management promoting wireless services
• Open auctions for wireless fixed access spectrum
• Regulatory framework for free access to IEEE 802
  bands
• Interconnection strategies
• Reduced primary rate interface charges (PRI) for
  dial-up connection to facilitate future switch to
  broadband
• Promotion of national/regional peering points
  domestic network to reduce use of costly
  international backbone
• Licensing
• New class license available for data providers
  enabling agreements for network local loop
  access with any operators (LDI/LL Licensees)

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Issue (4) Enabling Regulation Case Example
Pakistan (Cont.)

• Outcomes
• Increased broadband connectivity - 132,000
  current subscribers
• Although still marginal (0.8)
• Marked improvement in enabling conditions for
  broadband penetration
• Backhaul network access is now relatively
  inexpensive
• Price of end-user broadband equipment is reducing
• Regulatory frameworks for broadband and new
  wireless applications i.e. Branchless Banking are
  opening new markets
• Recent examples include Wateen Telecom launch of
  WiFi service in December 2007 with 10,000
  wireless broadband subscribers in 4 months
• USF Broadband Pilot Project
• 72,500 private broadband penetration
• 320 community educational access centers
• Two opertors win subsidies (PTCL Wateen)

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Summary of issues

• Broadband e-applications
• Importance of e-applications for broadband uptake
  
• What is different about broadband?
• ICT skills
• Existing versus needed applications
• Awareness
• Access devices for penetration
• More co-ordination with other sectors like
  health, education, tax authorities, e-government
• Discussion on future
• What about PPPs (scarce examples?)
• Can UASF funds be used for broadband?
• Should UASF funds be used for ICT infrastructure
  capital only, or for applications and ICT
  capacity building, computers for all, etc.?

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Philippines - Provinces without fiber-backbone

• Mostly in central and southern regions
• 14 provinces outside Luzon w/o fiber have per
  capita income considerably below national average
• 8 of population
• Most are lowest income province in their region
• But some do/ may have digital microwave
• Fiber not necessarily or absolutely required
• Technical solutions feasible though
  e-applications and ICT diffusion measures required

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Reviewing broadband pricing
Minimum cost for a broadband access device is
PHP 10,000, plus cost for software - the nettop
with Vista starter edition for PHP 12,000 and
1,900 for a wireless dongle at least PHP 14,000
(USD 292)
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Broadband costs as of monthly family income
(USD)
Intelecon analysis data from NSO 2006, CAGR of
7 to est. 2009 HH income Average HH expenditure
on transport communications 8.2 in 2006