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Title: 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)

66
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)

67
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.?

68
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

69
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)
70
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
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