Management of USAFs: Detailed Analysis of Operating USAFs

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This is the presentation for the second session of a workshop CTO developed on the Management of Universal Service Access Funds (USAFs), held in Cameroon. It analyses the operations of USAFs.

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Management of USAFs: Detailed Analysis of Operating USAFs

  1. 1. Management of Universal Access Funds for Telecommunications Regulatory Board of Cameroon Module Two: Detailed Analysis of Operating USAFs 7 – 9 February 2011
  2. 2. Countries Studies <ul><li>Latin America </li></ul><ul><li>Peru </li></ul><ul><li>Colombia </li></ul><ul><li>Chile </li></ul><ul><li>Africa </li></ul><ul><li>South Africa </li></ul><ul><li>Uganda </li></ul><ul><li>Nigeria </li></ul><ul><li>Ghana </li></ul><ul><li>Kenya </li></ul>
  3. 3. In Context: Status of Africa Country GDP per capita (current US$) Fixed Line penetration Mobile Penetration Time of USAF Establishment 2009 Time of USAF Establishment 2009 Time of USAF Establishment 2008 South Africa 3,593 (1996) 5,789 10.10% (1996) 8.62% 2% (1996) 92% Uganda 232 (2001) 490 0.22% (2001) 0.71% 1% (2001) 27% Nigeria 504 (2003) 1,118 0.66% (2003) 0.96% 2% (2003) 42% Ghana 489 (2005) 1,098 1.47% (2005) 1.12% 13% (2005) 50%
  4. 4. PERU
  5. 5. Context of the Peruvian ICT Sector <ul><li>Teledensity in 1994 for fixed lines was 3.21% and mobiles was 0.22% </li></ul><ul><li>Liberalising the telecommunications market started in 1991 and completed in 1999 </li></ul><ul><li>Peru has two interrelated mechanisms for ICT development </li></ul><ul><ul><li>the Fund for Investment in Telecommunications (FITEL) </li></ul></ul><ul><ul><li>the Projects Office of the Vice Ministry of Communications of the MTC </li></ul></ul><ul><li>Government held a contract with Telefónica de Perú (incumbent) since 1994 although it benefitted cities rather than rural areas </li></ul><ul><li>TdP’s share of investments declined from 1998 (80%) to 2000 (50%) </li></ul>
  6. 6. FITEL: El Fondo de Inversión en Telecommunicaciones Rurales (Rural Telecommunication Investment Fund) <ul><li>Background </li></ul><ul><li>Established in 1993 to provide equity finance for telecommunications in rural areas and projects of social interest </li></ul><ul><ul><li>in the interest of the rural communities </li></ul></ul><ul><ul><li>contributing to their socio-economic development </li></ul></ul><ul><ul><li>have the greatest social benefit </li></ul></ul><ul><li>Legislation: Texto Único Ordenado of the Communications Law – “telecommunications are provided under the principle of service with equity (article 5), whereby all have the right to use telecommunications services (article3). The right to their use covers the entire country promoting the integration of areas at great distances from urban centres (article 5)” (MTC, 1993) </li></ul><ul><li>Regulation: Regulation of Law No. 28 900 and approved by Supreme Decree N0 010-2007-MTC </li></ul>
  7. 7. FITEL: El Fondo de Inversión en Telecommunicaciones Rurales (Rural Telecommunication Investment Fund) <ul><li>Fund administered at the beginning was OSIPTEL, regulatory agency </li></ul><ul><li>In 2006 the fund was transferred out of OSIPTEL and became separate entity under the Transport and Communications Sector. </li></ul><ul><li>The fund aims to: </li></ul><ul><ul><li>Reduce the gap in access to telecommunications services in rural areas and places of preferential social interest. </li></ul></ul><ul><ul><li>Promote social and economic development of rural areas and places of preferential social interest, ensuring access to telecommunications services and training of people in the use of information technology. </li></ul></ul><ul><ul><li>Encourage private sector participation in providing telecommunications services in rural areas and places of preferential social interest. </li></ul></ul><ul><li>Universal access defined as access to a set of essential services that includes voice telephony, fax and data, and free emergency calls. </li></ul>
  8. 8. FITEL: El Fondo de Inversión en Telecommunicaciones Rurales (Rural Telecommunication Investment Fund) <ul><li>Funding </li></ul><ul><ul><li>1% of total annual gross revenues billed and collected by operators </li></ul></ul><ul><ul><li>Interest income generated by FITEL </li></ul></ul><ul><ul><li>Donations and contributions </li></ul></ul><ul><ul><li>For Financial Year 2008, FITEL’s budget was USD 32.8 million </li></ul></ul><ul><ul><li>FITEL resources, end of Financial Year 2008, were estimated at USD 246.9 million </li></ul></ul><ul><ul><li>The Treasury holds the allocated funds </li></ul></ul><ul><ul><li>Though collection of funds started in 1994 the first project was not funded until 1998 </li></ul></ul>
  9. 9. FITEL: El Fondo de Inversión en Telecommunicaciones Rurales (Rural Telecommunication Investment Fund) <ul><li>Intervention methodologies </li></ul><ul><ul><li>Originally used out-based aid (OBA) approach with a minimum subsidy tender </li></ul></ul><ul><ul><li>Now use competitive bidding to distribute subsidies </li></ul></ul><ul><ul><li>Since 2004 small operators can request for subsidies for self initiated projects </li></ul></ul><ul><ul><li>A list of projects eligible for subsidies determined by the greatest social benefit has been created </li></ul></ul><ul><ul><li>FITEL cannot allocate funds to areas that already have access </li></ul></ul><ul><ul><li>Priority localities to receive FITEL funding include: </li></ul></ul><ul><ul><ul><li>rural towns (with a population of more than 400 inhabitants and less than 3,000 inhabitants) </li></ul></ul></ul><ul><ul><ul><li>district capitals </li></ul></ul></ul><ul><ul><ul><li>towns in high social interest areas </li></ul></ul></ul><ul><ul><ul><li>(as determined by the government) </li></ul></ul></ul>
  10. 10. FITEL: El Fondo de Inversión en Telecommunicaciones Rurales (Rural Telecommunication Investment Fund) <ul><li>Achievements </li></ul><ul><ul><li>By January 2005, over 6,500 rural villages had at least one public phone </li></ul></ul><ul><ul><li>Subsidised payphone access for 6,500 out of 10,000 population centres. Telefonica installed the rest under its UA obligations or on its own initiative </li></ul></ul><ul><ul><li>FITEL has disbursed: </li></ul></ul><ul><ul><ul><li>US$ 18,800 subsidy per locality in 1998 </li></ul></ul></ul><ul><ul><ul><li>US$ 5,700 subsidy per locality in 1999 </li></ul></ul></ul><ul><ul><ul><li>US$ 12,100 subsidy per locality in 2000 </li></ul></ul></ul><ul><ul><li>Collected a total of $143,063,602 and disbursed $45,076,256 (32%) </li></ul></ul><ul><ul><li>Provided subsidies to rural health networks, agrarian information systems, community telecommunications network projects etc </li></ul></ul><ul><ul><li>In 2008 and 2009, FITEL awarded subsidies for </li></ul></ul><ul><ul><li>Broadband services to rural areas. </li></ul></ul>
  11. 11. The Projects Office of the Vice Ministry of Communications <ul><li>The objective of the MTC communication projects is to promote democratisation of communication services and ICTs </li></ul><ul><li>Projects are financed by state resources, which are funds often greater than those available to FITEL </li></ul><ul><li>Projects implemented by the MTC Office up to 2004 include: </li></ul><ul><ul><li>Communal Communication Support Project – 757 systems installed for television through satellite reception and low power television broadcasting </li></ul></ul><ul><ul><li>Radio Spectrum Control Project </li></ul></ul><ul><ul><li>Implementation of Rural Telecommunications Project – Rural Internet </li></ul></ul><ul><ul><li>Peruvian Communication Platform project </li></ul></ul><ul><ul><li>Rural TIC Settlement Project </li></ul></ul>
  12. 12. Out-Based Aid (OBA) <ul><li>A minimum subsidy auction with an output-based disbursement schedule. </li></ul><ul><li>The operator takes on the service delivery and the government pays them a subsidy where the disbursement schedule is linked closely to the outputs delivered. </li></ul><ul><li>Adopts competitive tendering so that the initial investment and start-up costs are covered by the subsidy but recurring costs are covered by the commercial market. </li></ul><ul><li>OBA allows for some payments to be specifically deferred for disbursement at predefined periods of time. </li></ul><ul><li>The mechanism provides leverage for the fund to enforce deployment requirements because continuing payments are based on satisfactory performances. </li></ul>
  13. 13. Sources for Further Information on Peru <ul><li>http://propoor-ict.net/content/pdfs/03_UNDP_Report_3_4-Peru.pdf </li></ul><ul><li>http://www.fitel.gob.pe/ </li></ul><ul><li>http://giswatch.org/sites/default/files/GISW_Peru.pdf </li></ul><ul><li>http://www.inteleconresearch.com/pdf/intelecon%20paper%20-%20ua%20%26%20rur.pdf </li></ul><ul><li>http://www.inteleconresearch.com/pages/documents/UASFFunds2009update-Oct2009.pdf </li></ul><ul><li>http://www.inteleconresearch.com/pdf/ua%20funds%202004%20update.pdf </li></ul><ul><li>http://propoor-ict.net/content/pdfs/03_UNDP_Report_3_4-Peru.pdf </li></ul><ul><li>http://irispublic.worldbank.org/85257559006C22E9/All+Documents/85257559006C22E9852570A0005E1F14/$File/Universal0Acce1mmunications0and0ICT.pdf </li></ul>
  14. 14. COLOMBIA
  15. 15. Context of the Columbian ICT sector <ul><li>Introduced liberalisation in 1991 </li></ul><ul><li>Since 1997 telecommunications sector registered the second highest level of investments (22%) </li></ul><ul><li>Competition increased in 2003 when the government privatised the state-owned National Telecommunications Company </li></ul><ul><li>Through increased competition Columbia has gained reasonably modern telecom infrastructure but one which primarily serves higher populated areas </li></ul><ul><li>This has increased the imbalance between urban and rural areas </li></ul><ul><li>Colombia ICT programmes consist of Connectivity Agenda, Compartel and Computers for Education </li></ul>
  16. 16. Fondo de Comunicaciones (COMPARTEL) <ul><li>Background </li></ul><ul><li>Established in 1994 but started operations only in 1999 </li></ul><ul><li>The fund’s programme is called COMPARTEL, which auctions social telephony projects </li></ul><ul><li>Based upon the Chilean UA model </li></ul><ul><li>Fund administered by the Ministry of Information Technologies and Communications </li></ul><ul><li>Supports community telephones, community Internet access centres and Internet access at government facilities (schools, hospitals, city halls, military) </li></ul><ul><li>The Program guarantees the operation and maintenance of the telephones for 10 years. </li></ul>
  17. 17. Fondo de Comunicaciones (COMPARTEL) <ul><li>Policy Objectives </li></ul><ul><ul><li>Provide telecommunications services to as many communities as possible that do not have access to telecommunications services, in order for the communities to achieve the national coverage.  </li></ul></ul><ul><ul><li>Improve the coverage of telecommunications services in those towns throughout the country where the provision of these services are inadequate, through community telecommunications solutions. </li></ul></ul><ul><ul><li>Promote the development of telecommunications services in rural areas to increase the competitiveness of regions. </li></ul></ul><ul><ul><li>Facilitating the access of ethnic minorities and the disabled population of the country's telecommunications services </li></ul></ul>
  18. 18. Fondo de Comunicaciones (COMPARTEL) <ul><li>Funding </li></ul><ul><ul><li>5% of gross revenues of national and international long distance and mobile services and a percentage of net revenues from fixed telephone, VAS and trunking </li></ul></ul><ul><ul><li>Contributions from license fees </li></ul></ul><ul><ul><li>Contributions from the government </li></ul></ul><ul><li>Intervention methodologies </li></ul><ul><ul><li>Originally used out-based aid (OBA) approach with a minimum subsidy tender </li></ul></ul><ul><ul><li>Now use competitive bidding - Winning bidders are selected based on meeting technical requirements with the smallest subsidy requested. </li></ul></ul>
  19. 19. Fondo de Comunicaciones (COMPARTEL) <ul><li>Achievements </li></ul><ul><ul><li>22,242 population centres covered with 5 million people benefiting </li></ul></ul><ul><ul><li>At least one rural community telephone per every 150 inhabitants </li></ul></ul><ul><ul><li>Subsidised installation of Internet Community Access Centres accessible to an estimated 5.2 million people including 2.5 million school children </li></ul></ul><ul><ul><li>Fund has collected US$448,599,640 and disbursed US$165,995,817 (37% of that collected) </li></ul></ul><ul><ul><li>Examples of projects funded between 2007-2009: </li></ul></ul><ul><ul><ul><li>By November 2008, Compartel had connected 15,500 public institutions to the internet of which about 11,000 are in schools. </li></ul></ul></ul><ul><ul><ul><li>In 2009, Compartel offered a maximum of US$ 28.5 million to install a fibre cable to connect San Andres island to the mainland. Energia Integral Andina won the least-cost auction with a request for US$ 27.0 million. </li></ul></ul></ul>
  20. 20. Sources for Further Information on Colombia <ul><li>http://lcweb2.loc.gov/frd/cs/profiles/Colombia.pdf </li></ul><ul><li>http://giswatch.org/en/country-report/civil-society-participation/colombia </li></ul><ul><li>http://www.crcom.gov.co/index.php?option=com_content&view=article&id=594&Itemid=191&lang=en </li></ul><ul><li>http://archivo.mintic.gov.co/mincom/faces/index.jsp?id=2971 </li></ul><ul><li>http://www.inteleconresearch.com/pdf/ua%20funds%202004%20update.pdf </li></ul><ul><li>http://irispublic.worldbank.org/85257559006C22E9/All+Documents/85257559006C22E9852570A0005E1F14/$File/Universal0Acce1mmunications0and0ICT.pdf </li></ul><ul><li>http://www.ictregulationtoolkit.org/en/PracticeNote.aspx?id=3147 </li></ul>
  21. 21. CHILE
  22. 22. Context of the Chilean ICT sector <ul><li>Privatisation and competition in the telecom sector introduced in 1988 </li></ul><ul><li>Fixed line teledensity in 1992 was 9.5 %. This increased on average by 15.1% between 1994-1998 </li></ul><ul><li>Mobile telephony penetration in 1992 was only 0.8%. Prepaid services commercially launched in 1997 has led to higher growth </li></ul><ul><li>In 1991 the percentage contribution of telecommunications to the GDP was 1.8% </li></ul><ul><li>In 1994 competition was improved, interconnection charges were fixed and the law introduced carrier and multicarrier service </li></ul>
  23. 23. Fondo de Desarrollo de las Telecommunications <ul><li>Background </li></ul><ul><li>Established in 1994 </li></ul><ul><li>Fund Administrator – Subtel, regulatory agency </li></ul><ul><li>Funding </li></ul><ul><ul><li>Government’s budgetary contributions </li></ul></ul><ul><ul><li>Between 1995 and 2000 FDT provided US$22 million out of a total of US$161 million invested in universal access projects by rural telecom operators </li></ul></ul><ul><ul><li>FDT has disbursed $29,981,000 (100%) of funds (2006) </li></ul></ul><ul><li>  </li></ul>
  24. 24. Fondo de Desarrollo de las Telecommunications <ul><li>Intervention methodologies: </li></ul><ul><ul><li>All operators are eligible to receive funds </li></ul></ul><ul><ul><li>Projects are requested/proposed by the community, the municipality or by an operator/entrepreneur </li></ul></ul><ul><ul><li>The fund administrator then reviews, evaluates and develops for funding process </li></ul></ul><ul><ul><li>Originally used out-based aid (OBA) approach with a minimum subsidy tender </li></ul></ul><ul><ul><li>Subsidies are now distributed through competitive bidding. The bid evaluation emphasizes the lowest proposed subsidy for a particular project combined with a commitment to shortest delivery time. </li></ul></ul>
  25. 25. Fondo de Desarrollo de las Telecommunications <ul><li>Achievements </li></ul><ul><ul><li>Met the target to provide public telephone service to about 6,000 unserved localities during the period from 1995-1999. </li></ul></ul><ul><ul><li>After that achievement, refocused on telecentres projects plus backbone, broadband and mobile network expansion. </li></ul></ul><ul><ul><li>25,000 payphones have been installed in around 8,000 population centres (2006) </li></ul></ul><ul><ul><li>By 2006 less than 150,000 (1% of population) was without basic telephone access </li></ul></ul><ul><ul><li>Internet access for rural schools </li></ul></ul><ul><ul><li>Projects and programs financed by the fund during 2007 – 2009 include: </li></ul></ul><ul><ul><ul><ul><li>fibre optic backbone extension </li></ul></ul></ul></ul><ul><ul><ul><ul><li>WiMAX installation </li></ul></ul></ul></ul><ul><ul><ul><ul><li>rural broadband </li></ul></ul></ul></ul>
  26. 26. Sources for Further Information on Chile <ul><li>http://www.itu.int/ITU-D/ict/papers/2002/SCM/TK.pdf </li></ul><ul><li>http://giswatch.org/sites/default/files/Chile.pdf </li></ul><ul><li>http://www.inteleconresearch.com/pdf/ua%20funds%202004%20update.pdf </li></ul><ul><li>http://www.inteleconresearch.com/pages/documents/UASFFunds2009update-Oct2009.pdf </li></ul><ul><li>http://www.eclac.org/drni/noticias/noticias/7/26637/Christian%20Nicolai.pdf </li></ul>
  27. 27. SOUTH AFRICA
  28. 28. Context of the South African ICT sector <ul><li>Even after the end of apartheid the digital divide by the colour was pronounced. In 1994 national teledensity was 60% but blacks had less than 1% access </li></ul><ul><li>One incumbent fixed line operator – Telkom - and two mobile operators in 1993 – Vodacom (owned 50% by Telekom) and MTN, with Cell C introduced in 2001 </li></ul><ul><li>ISPs and Value Added Network Services (VANS) were fully liberalised </li></ul><ul><li>By 1993-94 period there were 3.66 million main telephone subscribers and about 50,000 public telephones </li></ul><ul><li>By 1995 there were 300,000 mobile subscribers </li></ul>
  29. 29. Context of the South African ICT sector <ul><li>Telecommunications Green Paper 2005 to consult with the public </li></ul><ul><li>Key telecom policy objectives of the Government </li></ul><ul><ul><li>achievement of universal service </li></ul></ul><ul><ul><li>economic empowerment of historically disadvantaged South Africans </li></ul></ul><ul><ul><li>provision of a wide range of telecommunications services to stimulate and support economic growth </li></ul></ul><ul><ul><li>effective use of telecommunications for social and infrastructural development </li></ul></ul><ul><li>Progress from universal access to universal service </li></ul><ul><li>The policy identified internal (affordability, legislative/regulatory frameworks etc) and external (technology changes, convergence etc) drivers of change </li></ul>
  30. 30. Context of the South African ICT sector <ul><li>Adopted policy and regulatory strategies </li></ul><ul><ul><li>Imposing public service obligations for community access and setting different rates accordingly </li></ul></ul><ul><ul><li>Assign tariff differentials for targeted groups </li></ul></ul><ul><ul><li>Segmenting services market and open for competition </li></ul></ul><ul><ul><li>Regulate network and service provision, interconnection, quality of service, frequency spectrum </li></ul></ul><ul><ul><li>Facilitation of flow of investment funds </li></ul></ul><ul><ul><li>Carry out of various public consultation processes </li></ul></ul>
  31. 31. Context of the South African ICT sector <ul><li>South Africa set Universal Service targets </li></ul><ul><ul><li>Telekom’s fixed rollout target in 1996: </li></ul></ul><ul><ul><ul><li>2.7 million new lines </li></ul></ul></ul><ul><ul><ul><li>1.7 million lines in underserved areas </li></ul></ul></ul><ul><ul><ul><li>120,000 pay phones </li></ul></ul></ul><ul><ul><ul><li>Access for 20,246 priority customers in 3,204 villages </li></ul></ul></ul><ul><ul><li>Mobile: </li></ul></ul><ul><ul><ul><li>Vodacom (1993) -22,000 </li></ul></ul></ul><ul><ul><ul><li>MTN (1993) – 7,500 </li></ul></ul></ul><ul><ul><ul><li>Cell C (2001) – 52,000 </li></ul></ul></ul><ul><ul><li>High speed Internet access to 2,500 public schools and 2,500 rural clinics </li></ul></ul><ul><ul><li>Problems with the specified targets was market uncertainty, potential error in network growth predictions, lack of flexibility, and the operator’s inability to comply creatively </li></ul></ul>
  32. 32. Universal Service Access Agency of South Africa (USAASA) <ul><li>Background </li></ul><ul><li>Established under the Consolidated Telecommunications Act 1996 as the administrator of the Universal Service Fund </li></ul><ul><li>One of the objectives of the Act  (a) promote the universal and affordable provision of telecommunication services </li></ul><ul><li>Objectives: </li></ul><ul><ul><li>promote the goal of universal service </li></ul></ul><ul><ul><li>encourage, facilitate and provide guidance in respect of any universal access scheme </li></ul></ul><ul><li>The funds were to be utilised to fund access by needy persons, extension of telecom services by license holders, internet access for schools, access for community access points etc. </li></ul>
  33. 33. Universal Service Access Agency of South Africa (USAASA) <ul><li>Funding </li></ul><ul><ul><li>0.2% of all operators’ revenues (2009) </li></ul></ul><ul><ul><li>The 2001 Telecommunications Amendment Bill limited annual contributions to the fund to 0.5% of revenue </li></ul></ul><ul><ul><li>At current levels, annual contributions are in the range of US$ 18.4 – 23.5 million </li></ul></ul><ul><ul><li>From 1998 to 2008, total operator’s contributions were US$ 81.8 million </li></ul></ul><ul><ul><li>Total appropriations or money budgeted for specific use in the same period was US$29.2 million </li></ul></ul>
  34. 34. Universal Service Access Agency of South Africa (USAASA) <ul><li>Intervention Methodologies </li></ul><ul><ul><li>Initially supported telecentres and public payphones, today extends to E-school cyberlabs, ICT telecontainers and community digital hubs </li></ul></ul><ul><ul><li>By 2008, 155 telecentres have been established. Today focus on replacing obsolete equipment </li></ul></ul><ul><ul><li>Now focus on Under-served Area Licenses (USALs) licensed to provide voice and data services in under-served rural districts (less than 5% teledensity). Each USAL for the 27 identified areas was to receive a US$ 735,000 subsidy from the Fund spread over 3 years. Seven companies have been awarded USALS by 2009 </li></ul></ul><ul><ul><li>In May 2007, ICASA the regulator merged the USALs and issue one Provincial Under-Serviced Area Network Operator (PUSANO) license per province. </li></ul></ul>
  35. 35. Universal Service Access Agency of South Africa (USAASA) <ul><li>Intervention Methodologies </li></ul><ul><ul><li>Telecentres provide a number of services and have diverse ownership and governance structures of individuals, enterprises, NGOs and CBOs </li></ul></ul><ul><ul><li>Multi-Purpose Community Centres (MPCCs) </li></ul></ul><ul><ul><li>School Cyberlabs – school based facilities (with 30 computers, photocoping machine, printer and sometimes a fax machine) in under-served areas to provide ICT access and computer literacy training, owned and maintained by the school in the long-term </li></ul></ul><ul><ul><li>Community Digital Hubs – advanced ICT facilities to provide human capacity building and technical support to remote Telecentres and Cyeberlabs </li></ul></ul><ul><ul><li>Today Broadcasting is a part of the Fund’s mandate under the National Broadband Policy </li></ul></ul>
  36. 36. Universal Service Access Agency of South Africa (USAASA) <ul><li>Challenges </li></ul><ul><ul><li>Affordability of services </li></ul></ul><ul><ul><li>Difficulties in forging partnerships </li></ul></ul><ul><ul><li>Need monitoring and evaluation </li></ul></ul><ul><ul><li>Need more effective relationships with stakeholders </li></ul></ul><ul><ul><li>Better coordination of operators’ USOs </li></ul></ul><ul><ul><li>Stronger agency at provincial levels </li></ul></ul><ul><ul><li>Not in line with national priorities </li></ul></ul><ul><ul><li>Need stronger image </li></ul></ul><ul><li>Key Success Factors </li></ul><ul><ul><li>Bottom-up strategy </li></ul></ul><ul><ul><li>Research </li></ul></ul><ul><ul><li>Multi-stakeholder partnerships </li></ul></ul><ul><ul><li>Networking for scaling up </li></ul></ul><ul><ul><li>Technology </li></ul></ul><ul><ul><li>Developmental planning </li></ul></ul>
  37. 37. Sources for further information on South Africa <ul><ul><li>http://www.ictportal.org.za/documents/d00031/Universal_Service_Access_Lewis_Nov2006.pdf </li></ul></ul><ul><ul><li>http://www.polity.org.za/polity/govdocs/green_papers/telecomms.html </li></ul></ul><ul><ul><li>http://www.internet.org.za/telecoms_act.html#Universal_Service_Fund </li></ul></ul><ul><ul><li>http://www.info.gov.za/acts/1996/a103-96.pdf </li></ul></ul><ul><ul><li>http://www.internet.org.za/telecoms_act.html#Establishment_and_control_of_Universal_Service_Fund </li></ul></ul><ul><ul><li>http://www.ictportal.org.za/index.php </li></ul></ul><ul><ul><li>http://www.itu.int/ITU-D/afr/events/FTRA/2009/docs/FTRA%20-UniversalAccessFunds.pdf </li></ul></ul><ul><ul><li>http://www.cprsouth.org/wp-content/uploads/2010/12/Policy-brief_Calandro_Moyo_Policy_brief-FINAL.pdf </li></ul></ul><ul><ul><li>http://www.itu.int/ITU-D/afr/events/FTRA/2009/docs/Sepulveda_Report_USFs.pdf </li></ul></ul><ul><ul><li>http://www.inteleconresearch.com/pdf/ua%20funds%202004%20update.pdf </li></ul></ul><ul><ul><li>http://www.inteleconresearch.com/pages/documents/UASFFunds2009update-Oct2009.pdf </li></ul></ul><ul><ul><li>http://www.usaasa.org.za/ </li></ul></ul><ul><ul><li>http://www.ictportal.org.za/documents/d00017/SA_2004_Review.pdf </li></ul></ul><ul><ul><li>http://www.internet.org.za/telecoms_act.html#Objects_of_Act </li></ul></ul>
  38. 38. Uganda
  39. 39. Context of the Ugandan ICT sector <ul><li>Penetration rates by 2001 </li></ul><ul><ul><li>Fixed Line 0.22% </li></ul></ul><ul><ul><li>Mobile 0.1% </li></ul></ul><ul><ul><li>Internet 0.02% </li></ul></ul><ul><li>  In 2001 there were two fixed line operators; Uganda Telecom & MTN Uganda with one Mobile operator; Celtel Uganda </li></ul><ul><li>Communications Act 1997 introduced liberalisation with the following sector specific policy objectives: </li></ul><ul><ul><li>Establish an independent regulator </li></ul></ul><ul><ul><li>Increase teledensity from 0.28% to 2.0% by 2002 </li></ul></ul><ul><ul><li>Improve communication facilities and quality of service </li></ul></ul><ul><ul><li>add a variety of new communications services. </li></ul></ul><ul><ul><li>Serve the unmet customer demand </li></ul></ul><ul><ul><li>Increase the geographical distribution and coverage of the services throughout the country.   </li></ul></ul>
  40. 40. Context of the Ugandan ICT sector
  41. 41. Rural Communications Development Fund (RCDF) <ul><li>Background </li></ul><ul><li>Established in 2001 while implementation of programmes began in 2002 </li></ul><ul><li>Administered by Uganda Communications Commission </li></ul><ul><li>RCDF Board set up in 2002 to oversee management </li></ul><ul><li>Uganda is the first African country to develop USF covering ICTs and not just basic telephony </li></ul><ul><li>Operators were obliged under their licences to declare what areas they would reach by July 2002 </li></ul><ul><li>UCC carried out a baseline study on ‘Policies and strategies best suited for rural communications in Uganda’ which led to: </li></ul><ul><ul><li>Rural Communications Development Policy </li></ul></ul><ul><ul><li>An operating manual for the UAF addressing </li></ul></ul><ul><ul><li>A Universal Access Fund Manuscript </li></ul></ul>
  42. 42. Rural Communications Development Fund (RCDF) <ul><li>Legislation: The Uganda Communications Act 1997 states that the “The functions of the Commission shall be .... (aa) to establish and administer a fund for rural communications development” </li></ul><ul><li>UCC policy for the Rural Communications Development Fund (2001) states that the RCDF is essentially intended to act as a means of intervention to ensure that basic communication services of acceptable quality are accessible, at affordable prices, and at reasonable distances, by all people in Uganda. </li></ul><ul><ul><li>To provide access of a reasonable distance to basic communications </li></ul></ul><ul><ul><li>To ensure effective utilisation of the fund </li></ul></ul><ul><ul><li>To promote the use of ICT </li></ul></ul>
  43. 43. Rural Communications Development Fund (RCDF) <ul><li>Funding </li></ul><ul><ul><li>1% levy on all sector participants including telecom operators, the postal service, couriers and ISPs. </li></ul></ul><ul><ul><li>All players who are likely to benefit from the fund contribute equally in proportion to their revenues </li></ul></ul><ul><ul><li>Government contributions </li></ul></ul><ul><ul><li>World Bank has made contributions as well </li></ul></ul><ul><ul><li>ITU has also supported projects e.g. pilot MTC project in Nakeseki </li></ul></ul><ul><ul><li>In addition there had been funding from other multilateral and bilateral agencies </li></ul></ul>
  44. 44. Rural Communications Development Fund (RCDF) <ul><li>Intervention methodologies </li></ul><ul><ul><li>Use ‘smart subsidies’ / reverse auction. This emerged as a best practice as it prevents long-term dependency on subsidy </li></ul></ul><ul><ul><li>Funds are only available to areas where service provision is not feasible or unlikely to be provided by operators within the next 1-2 years without subsidy </li></ul></ul><ul><ul><li>Every service in every area was subjected to a viability test to calculate the maximum one-time subsidy </li></ul></ul><ul><ul><li>Internet access in schools is also subsidised by RCDF </li></ul></ul><ul><ul><li>RCDF generally finance projects that provide telephony, internet POPs, internet exchange points, internet cafes, telecentres, public payphones and interestingly content development </li></ul></ul><ul><ul><li>For fiscal year 2008-2009, the RCDF levy generated USD 4.0 million and development partners contributed an additional USD 2.0 million </li></ul></ul>
  45. 45. Rural Communications Development Fund (RCDF) <ul><li>Achievements </li></ul><ul><ul><li>In 2004 Uganda completed first countrywide tender process to have a public telephone in each of its approximately 900 rural sub-counties </li></ul></ul><ul><ul><li>By August 2008, the fund had financed the installation of: </li></ul></ul><ul><ul><ul><li>15 telecentres </li></ul></ul></ul><ul><ul><ul><li>computer labs in 106 rural schools </li></ul></ul></ul><ul><ul><ul><li>1,704 payphones </li></ul></ul></ul><ul><ul><ul><li>54 internet cafes </li></ul></ul></ul><ul><ul><ul><li>52 Internet POPs </li></ul></ul></ul><ul><ul><ul><li>55 basic ICT training centres </li></ul></ul></ul><ul><ul><ul><li>78 district web portals </li></ul></ul></ul>
  46. 46. Rural Communications Development Fund (RCDF) <ul><li>RCDP’s second policy development process </li></ul>
  47. 47. Rural Communications Development Fund (RCDF) <ul><li>Future Plans </li></ul><ul><li>A new 5-year plan for the fund, “RCDF II”, was released in 2009. It has used a SWOT analysis and aims to use business models for delivery of services </li></ul><ul><li>The analysis has identified as challenges lack of awareness, low literacy, lack of access & affordability, energy sustainability, quality of services </li></ul><ul><li>The new plan aims to install one payphone per 500 people in rural areas and establish one community information centre per rural district </li></ul><ul><li>In order to accomplish these objectives, the UCC estimates that it will need funding of US$ 17.2 million per year. </li></ul>
  48. 48. Sources for Further Information on Uganda <ul><li>http://www.giswatch.org/country-report/2008/uganda </li></ul><ul><li>http://www.itu.int/ITU-D/univ_access/mcts/ </li></ul><ul><li>http://www.ict.go.ug/ </li></ul><ul><li>http://www.ictregulationtoolkit.org/en/PracticeNote.aspx?id=3144 </li></ul><ul><li>http://www.ijcir.org/specialissue2009/article5.pdf </li></ul><ul><li>http://www.idrc.ca/en/ev-86250-201-1-DO_TOPIC.html </li></ul><ul><li>http://www.ucc.co.ug/rcdf/rcdf-Policy.pdf </li></ul><ul><li>http://allafrica.com/stories/201012020087.html </li></ul><ul><li>http://www.inteleconresearch.com/pdf/ua%20funds%202004%20update.pdf </li></ul><ul><li>http://www.inteleconresearch.com/pages/documents/UASFFunds2009update-Oct2009.pdf </li></ul><ul><li>http://www.itu.int/ITU-D/afr/events/FTRA/2009/docs/Sepulveda_Report_USFs.pdf </li></ul><ul><li>http://www.ucc.co.ug/ucaCap106LawsOfUganda.pdf </li></ul>
  49. 49. NIGERIA
  50. 50. Context of the Nigerian ICT sector <ul><li>Penetration rates by 2003 </li></ul><ul><ul><li>Fixed Line 0.66% </li></ul></ul><ul><ul><li>Mobile 2.35% </li></ul></ul><ul><ul><li>Internet 0.04% </li></ul></ul><ul><ul><li>Internet users 0.56% </li></ul></ul><ul><li>The Nigerian Communications Commissions Act was enacted in 1992 and the Nigeria Communications Commission (NCC) was created in 1993 </li></ul><ul><li>  </li></ul>
  51. 51. Universal Service Provision Fund (USPF) <ul><li>Background </li></ul><ul><li>Established in 2003 </li></ul><ul><li>Fund administered by the Universal Service Provision Fund Board </li></ul><ul><li>World Bank assessment (2005) of demand, preferences and affordability, status of the telecom sector, outlook and prospects for coverage, </li></ul><ul><ul><li>and identified regional challenges and the required size of the programme of intervention </li></ul></ul><ul><li>The World Bank designed the project, processes of disbursement, and helped tendering and licensing first pilot project </li></ul><ul><li>The fund’s initial focus was on community communications centres and mobile network expansion. </li></ul>
  52. 52. Universal Service Provision Fund (USPF) <ul><li>Preferred operating model was public-private-community-partnerships </li></ul><ul><ul><li>public sector contribute fiscal incentives </li></ul></ul><ul><ul><li>private sector the primary driver for implementation and sustainability </li></ul></ul><ul><ul><li>operated by operators, government and donors </li></ul></ul><ul><li>The USPF has a widely representative Board </li></ul><ul><ul><li>high officials from the line ministry and the regulatory authority </li></ul></ul><ul><ul><li>four eminent private sector stakeholders. </li></ul></ul><ul><li>The board supervises policy directions and the management of the fund </li></ul>
  53. 53. Universal Service Provision Fund (USPF) <ul><li>Policies </li></ul><ul><li>ensure that the USPF serves public interest in the provision of ICT applications and services </li></ul><ul><li>creates an enabling environment to improve use of ICTs </li></ul><ul><li>assures accessibility and availability of telecommunications and ICT infrastructure and services </li></ul><ul><li>facilitates provision of infrastructural development </li></ul><ul><li>promotes technological innovation & competition </li></ul><ul><li>provides access for business to improve their development </li></ul><ul><li>adopts methods of attaining greater Universal Access and Universal Service. </li></ul>
  54. 54. Universal Service Provision Fund (USPF) <ul><li>Legislation </li></ul><ul><li>Nigerian Communications Act 2003 states “112 (1) Subject to subsection (2) of this section, the Commission shall consider, design and determine a system which shall promote the widespread availability and usage of network services and applications services throughout Nigeria by encouraging the installation of network facilities and the provision for network services and applications services to institutions in unserved, underserved areas or for underserved groups within the community” </li></ul><ul><li>  </li></ul>
  55. 55. Universal Service Provision Fund (USPF) <ul><li>Funding </li></ul><ul><ul><li>Main funding source is 50% of annual operator’s levy </li></ul></ul><ul><ul><li>Appropriations by the National Assembly </li></ul></ul><ul><ul><li>Contributions from the NCC </li></ul></ul><ul><ul><li>Income from its operations and investments </li></ul></ul><ul><ul><li>Donations, loans and grants </li></ul></ul><ul><ul><li>Fund is professionally managed by an independent investment management firm </li></ul></ul><ul><li>Intervention methodologies </li></ul><ul><ul><li>Use both top-down and bottom-up processes for project initiation </li></ul></ul><ul><ul><li>Funds allocated though competitive bidding </li></ul></ul><ul><ul><li>Often includes minimum subsidy auctions in the competitive bidding process </li></ul></ul>
  56. 56. Universal Service Provision Fund (USPF) <ul><li>Achievements </li></ul><ul><ul><li>USPF has subsidized 47 wireless base stations, internet connections for 109 schools in 2007 and 365 schools in 2008 </li></ul></ul><ul><ul><li>In April 2008, the fund had US$ 64.6 million in total resources </li></ul></ul><ul><ul><li>Fund plans to </li></ul></ul><ul><ul><ul><li>subsidize ICT facilities for a further 550 schools </li></ul></ul></ul><ul><ul><ul><li>establish 109 Community Communications Centres </li></ul></ul></ul><ul><ul><ul><li>accelerate the expansion of mobile coverage through subsidies of passive sharing of infrastructure such as towers and generators in 2009 </li></ul></ul></ul>
  57. 57. Sources for further information on Nigeria <ul><li>http://www.inteleconresearch.com/pdf/ua%20funds%202004%20update.pdf </li></ul><ul><li>http://www.inteleconresearch.com/pages/documents/UASFFunds2009update-Oct2009.pdf </li></ul><ul><li>http://www.ncc.gov.ng/interconnection/Legislative-Guidelines%20on%20Interconnection.pdf </li></ul><ul><li>http://www.ncc.gov.ng/RegulatorFramework/Nigerian%20Communications%20Act,%202003.pdf </li></ul><ul><li>http://www.ictregulationtoolkit.org/en/Publication.1437.html </li></ul><ul><li>http://www.ncc.gov.ng/ </li></ul><ul><li>http://www.uspf.gov.ng/ </li></ul><ul><li>http://www.itu.int/ITU-D/ict/index.html </li></ul>
  58. 58. GHANA
  59. 59. Context of the Ghanaian ICT sector <ul><li>Fixed line penetration has been declining since 2004. </li></ul><ul><li>Huge recent mobile growth with high level of competition </li></ul><ul><li>In 2004 there were 5 wireless network providers, 4 of which were mobile operators </li></ul><ul><li>Two major fixed line service providers in 2005 </li></ul><ul><li>Polices and legislation pertaining to USAFs </li></ul><ul><ul><li>National Communications Authority Act 769 of 2008, </li></ul></ul><ul><ul><li>National ICT4AD Policy, 2003, </li></ul></ul><ul><ul><li>Electronic Communications Act, 2008, Act 775 </li></ul></ul><ul><ul><li>National Communications Regulations 2003, L.I. 1719. </li></ul></ul><ul><ul><li>Electronic Transactions Act 772, 2008 </li></ul></ul><ul><ul><li>National Telecommunications Policy, 2005 (NTP-05) </li></ul></ul>
  60. 60. Context of the Ghanaian ICT sector <ul><li>Penetration Rates (in 1000s) </li></ul><ul><li>  </li></ul>
  61. 61. Ghana Investment Fund for Telecommunications (GIFTEL) <ul><li>Background </li></ul><ul><li>Established in 2005 </li></ul><ul><li>Administered jointly by the government and the private sector through the GIFTEL Board of Trustees </li></ul><ul><li>An investment fund that collects money from telecommunications sector licensees and through licenses defines obligations to achieve UA and US </li></ul><ul><li>The policy goal was to achieve Universal Access to telecommunications to all regions and communities by 2010 and expand penetration to at least 25% of the population (including 10% in rural areas) </li></ul>
  62. 62. Ghana Investment Fund for Telecommunications (GIFTEL) <ul><li>Funding </li></ul><ul><ul><li>1% of fixed operators’ net revenues </li></ul></ul><ul><ul><li>Funds allocated by the Parliament </li></ul></ul><ul><ul><li>Money accrued from the Fund’s investments </li></ul></ul><ul><ul><li>Grants, donations etc. </li></ul></ul><ul><li>  Intervention methodologies </li></ul><ul><ul><li>Allocated on a competitive basis through competitive bidding </li></ul></ul><ul><ul><li>Public-private-partnerships used in allocation process </li></ul></ul><ul><ul><li>Requires a minimum number of bidders </li></ul></ul><ul><ul><li>Provides initial capital investments and start-up costs </li></ul></ul><ul><ul><li>May seek supplementary funding for a particular project </li></ul></ul><ul><ul><li>Assess long-term financial sustainability and meeting the policy objectives </li></ul></ul><ul><ul><li>Multi-purpose Community Telecentres (MCTs) a priority </li></ul></ul>
  63. 63. Ghana Investment Fund for Electronic Communications (GIFEC) <ul><li>Background </li></ul><ul><li>Established in 2005 </li></ul><ul><li>Similar USAF policies to GIFTEL but has a broader mandate in communications </li></ul><ul><li>Encompasses all electronic communications rather than only telecommunications thus covering provision of basic telephony, internet, multimedia, and broadband </li></ul>
  64. 64. Ghana Investment Fund for Electronic Communications (GIFEC) <ul><li>Funding </li></ul><ul><ul><li>Contributions from operators and service providers </li></ul></ul><ul><ul><li>Funds provided by the Parliament </li></ul></ul><ul><ul><li>Monies that may accrue to the Fund from investments </li></ul></ul><ul><ul><li>Donations, grants and gifts </li></ul></ul><ul><ul><li>Any other monies that may become lawfully payable to the Fund </li></ul></ul>
  65. 65. Ghana Investment Fund for Electronic Communications (GIFEC) <ul><li>Intervention methodologies </li></ul><ul><ul><li>Support rural telecentres (through competitive grants) and public telephony and Internet POPs (by open tender) </li></ul></ul><ul><li>Achievements </li></ul><ul><ul><li>Funding shared mobile operator facilities </li></ul></ul><ul><ul><li>Establish and manage community information centres (CIC) providing videos, computers, internet, photocopiers, fax etc. 120 operational since 2008. </li></ul></ul><ul><ul><li>Rural payphones roll-out in conjunction with MTN </li></ul></ul><ul><ul><li>Rural Business Centres and School Connectivity, but slow implementation </li></ul></ul><ul><ul><li>39 common telecom facilities in 2008 providing access for 273 communities </li></ul></ul><ul><ul><li>Mobile operators are extending networks at a faster rate through competition than GIFEC’s programme roll-out </li></ul></ul>
  66. 66. Sources for further information on Ghana <ul><li>http://www.gifec.gov.gh/ </li></ul><ul><li>http://www.researchictafrica.net/new/images/uploads/SPR20092010/Ghana_ICT_SPR_2009-2010_v02.pdf </li></ul><ul><li>http://www.inteleconresearch.com/pdf/ua%20funds%202004%20update.pdf </li></ul><ul><li>http://www.inteleconresearch.com/pages/documents/UASFFunds2009update-Oct2009.pdf </li></ul><ul><li>http://www.ict.gov.gh/Telecom%20policy/Ghana%20Telecom%20Policy%20Final.pdf </li></ul><ul><li>www.uneca.org/disd/events/accra//Financing/giftel%20presentation.ppt </li></ul>
  67. 67. KENYA
  68. 68. Context of the Kenyan ICT sector <ul><li>Four mobile operators with a total subscription of 20.1 million </li></ul><ul><li>Mobile penetration at 51.2% </li></ul><ul><li>Mobile coverage is at 86% of the population within a signal reach and land coverage of 35% </li></ul><ul><li>7.8 million Internet users </li></ul><ul><li>247,972 Fixed lines </li></ul><ul><li>419,047 Fixed wireless </li></ul><ul><li>18,626 Broadband subscriber </li></ul>
  69. 69. Universal Service & Access Fund - Kenya <ul><li>Baseline study carried out in 2004 assessed the ICT market, evaluated gaps and established the rural demand for ICTs </li></ul><ul><li>Recommended the establishment of a USF for sustainable funding of Universal Access, carrying out of ICT Pilot projects such as at schools and community access points and the provision of relevant content for communities. </li></ul><ul><li>Legislation: Kenya Information and Communications (Amendment) Act No. 1 of 2009 </li></ul>
  70. 70. Universal Service & Access Fund - Kenya <ul><li>USF established in 2010, administered by the Communications Commission of Kenya, the regulator. </li></ul><ul><li>The process was delayed due to a number of factors such as; </li></ul><ul><ul><li>Legislation took too long to be enacted </li></ul></ul><ul><ul><li>Uncertainty as to who should implement the fund and programme </li></ul></ul><ul><ul><li>Indecision on what percentage of levy to impose </li></ul></ul><ul><ul><li>Consultations for industry buy-in </li></ul></ul><ul><ul><li>Political and vested interests </li></ul></ul>
  71. 71. Universal Service & Access Fund - Kenya <ul><li>Proposals for funding </li></ul><ul><ul><li>All licensees to contribute to the fund </li></ul></ul><ul><ul><li>Levy between 0.5% -1% but has to be realistic </li></ul></ul><ul><ul><li>Contributors to the fund to be involved in decision-making </li></ul></ul><ul><ul><li>Independent body to manage the Fund </li></ul></ul><ul><ul><li>Applying smart subsidies </li></ul></ul><ul><li>  Current status </li></ul><ul><ul><li>16 School-based ICT centers established </li></ul></ul><ul><ul><li>Community ICT access points created </li></ul></ul><ul><ul><li>8 ICT centers for secondary schools </li></ul></ul><ul><ul><li>10 eResource centers in rural community public libraries in progress </li></ul></ul><ul><ul><li>Digitization of the secondary school curriculum underway </li></ul></ul><ul><ul><li>Computerization of health facilities in Nairobi underway </li></ul></ul><ul><ul><li>Strategic Plan for 2005-2010 </li></ul></ul>
  72. 72. Comparison of Operating African USAFs Country Funding Source Allocation Process Disbursement South Africa USAASA - 0.2% levy on all operators’ revenues - Currently annual contributions in the range of US$18.4-23.5 million - Initial priority, development of telecentres - Focus has shifted to assisting the recipients of Under-served Area Licenses (USALs) <ul><li>Total disbursement up to 2008 was US$31,718,060 </li></ul><ul><li>By 2008, 155 telecentres had been established </li></ul><ul><ul><li>Each USAL licensee for 27 identified areas receives US$ 735,000 subsidy from the Fund spread over 3 years. </li></ul></ul>Uganda <ul><li>1% levy on all sector participants </li></ul><ul><li>Government, WB, ITU and other multi and bilateral agencies contributes </li></ul><ul><li>Smart subsidies </li></ul><ul><li>Minimum one-time subsidy </li></ul><ul><ul><li>Finance a range of projects </li></ul></ul><ul><li>public telephones in each of approximately 900 rural sub-counties </li></ul><ul><li>installed 15 telecentres, 106 computer labs, 1,704 payphones, 54 internet cafes, 52 Internet POPs, 55 basic ICT training centres and 78 district web portals </li></ul>
  73. 73. Comparison of Operating African USAFs Country Funding Source Allocation Process Disbursement Nigeria <ul><li>- 50% of annual </li></ul><ul><li>operator levy </li></ul><ul><li>Appropriations by the National Assembly </li></ul><ul><ul><li>Contributions from the NCC </li></ul></ul><ul><ul><li>Use both top-down and bottom-up processes for project initiation </li></ul></ul><ul><ul><li>Funds allocated though competitive bidding </li></ul></ul><ul><ul><li>Often includes minimum subsidy auctions in the competitive bidding process </li></ul></ul>- Total resources by April 2008, US$ 64.6 million - subsidized 47 wireless base stations, and internet connections for 374 schools Ghana <ul><li>1% of fixed operators’ net revenues </li></ul><ul><li>Funds allocated by the Parliament </li></ul><ul><li>Allocated through competitive bidding and open tender </li></ul><ul><li>Public-private-partnerships </li></ul><ul><li>Need a minimum number of bidders </li></ul><ul><li>Supports initial capital investments </li></ul><ul><li>Priority MCTs </li></ul>Completed 39 “common telecom facilities” enabling the extension of service to 273 communities

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