Western cape broadband strategy (industry briefing)


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Presentation by Nirvesh Sooful, Technical Advisor. Presented at the Western Cape Government briefing to ICT industry stakeholders on the Western Cape Broadband Programme (March 2012), President Hotel, Bantry Bay, Cape Town

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Western cape broadband strategy (industry briefing)

  1. 1. Western Cape Broadband strategyand planIndustry BriefingMarch 2012
  2. 2. Why we are here “Zille promises 100Mbit/s broadband for Capetonians” “Zille reveals ‘game-changing’ plans for Western Cape” “Broadband boost for Western Cape”“Ambitious plans to make W Cape technology hub” “Zille’s plan for Cape to ‘go live’”“Affordable broadband on cards for rural SA”
  3. 3. Economic Development is at the centre of the provincial strategy,“Economic development is key to addressing the many challenges facing the Province. Strategiesadopted must subscribe to the paradigm that there cannot be development without economic growth”1. Increasing opportunities for growth and jobs2. Improving education outcomes3. Increasing access to safe and efficient transport Cost Efficiency4. Increasing wellness5. Increasing safety6. Developing integrated and sustainable humansettlements Increased Effectiveness &7. Mainstreaming sustainability and optimising improved Governmentresource-use efficiency8. Increasing social cohesion Service Delivery9. Reducing poverty10. Integrated service delivery for maximum impact11. Increasing opportunities for growth and Economic and Socialdevelopment in rural areas Development12. Building the best-run regional government inthe world
  4. 4. Broadband stimulates economic growthWorld Bank - in low- and middle-income countries every 10% increase inbroadband penetration accelerates economic growth by 1.38%—more than inhigh-income countries.Similar studies by McKinsey & Company and Booz & CompanyThe development of an inclusive information society is a key part of ournational growth and development strategy “However, concern with the slow pace of South Africa’s transition to the information society is growing. South Africa continues to slide relatively rapidly down most global indices relating to ICT or related information society issues raising serious alarm bells about current approaches and strategies.”
  5. 5. Staggering growth in number of Internet users in the rest of world (1991 – 2010) There is growing evidence that the diffusion of ICT is seen as an accelerator of economic growth in a country. The growth and productivity enhancing effects of well-implemented investments in ICTs can lead to increased trade and to more and better employment (OECD). In the animation, the redder a country is, the higher the Internet penetration is. White means there is nodata from the World Bank,or it’s less than 1 Internet user per 100 people.
  6. 6. ContextLast year, the Premier announced that a plan was being formulatedThe Western Cape economy is moving from one based principally aroundthe production and distribution of physical goods to one driven primarily bythe production and application of knowledge.As such, the Western Cape is currently characterised by many initiatives inthe ICT/ Knowledge economy space.In many of these initiatives, the presence of a well functioning, robust andaccessible telecommunications infrastructure is a prerequisite. “A growing economy must connect people through transport and technology. We have to learn from places like Kenya where an ICT revolution is driving strong economic growth. To emulate this, we are developing a telecommunications strategy, based on a fibre optic network infrastructure that connects government, citizens and the economy to improve productivity and access to new markets. The World Bank has calculated that the economy of a developing country grows by 1.38% for every 10% increase in broadband penetration. We cannot afford to get left behind.” Premier Helen Zille, State of the Province Address, 2011.
  7. 7. Process Map – a fast-track 12 month programme Consolidated Strategic Implementation Strategy & Ratifi- Project Initiation Implementation Framework Plan cation Plan  Problem statement  30 year strategic  Terms of reference for  Consolidation of all  Preparation of defined outlook and projection appointment of service findings and cabinet  Prepare TOR  Vision-statement for the providers recommendations of submission  Appoint Technical western cape province  Service providers to business cases  Distribution of Advisor  Identification of short, undertake Business  Key recommendations approvedKey actions  Develop Draft Position medium and long term case development for unpacked strategy and Paper interventions prioritised interventions  Stakeholder buy-in and implementation  Establish Provincial  Prioritisation  Costing and operating support from industry, plan Steering Committee methodology models municipalities and  Launch of  Identify stakeholders –  Project definition  Additional research provincial steering strategy reports for top 6 - 8 where necessary committee industry, municipalities, NGOs interventions  Stakeholder  Establish Industry  Engagements with consultation (ongoing) Advisory Forum municipalities  Oversight of service  Stakeholder providers and consultation (ongoing) researchers  Draft Position Paper  Strategic framework  Detailed business  Consolidated telecoms  Approved developed and prioritised projects cases of prioritised infrastructure strategy cabinetOutputs  Review of provincial  Cabinet approval of interventions and submission policies, activities final position paper and  Stakeholder buy-in  Immediate projects  Planning for  Stakeholder database strategic framework identified for implementation  Stakeholder  High-level analysis of implementation phase Consultation interventions  Steercom TOR Note: Workstreams will overlap
  8. 8. An idea of the GapIndicators: South Africa & Africa
  9. 9. Strategic Framework Connected Government  INFRASTRUCTURE  READINESS (SKILLS, APPLICATIONS, ETC)  USAGE The vision is that of a Co-ordinated and Integrated Western Cape where every Action (Catalytic citizen in every town and Telecoms Environment) village has access to affordable Connected Connected high speed broadband Citizens Economy infrastructure and services, has the necessary skills to be able to effectively utilise this infrastructure and is actively utilising this in their day to day lives.
  10. 10. High level Western Cape broadbandinfrastructure milestonesInfrastructure development is a key catalyst and that Government’s role has to be tofacilitate and drive the development of telecommunications infrastructure in theprovince. • 70% government buildings & 100% of public schools connected. • All communities have access to public ICT facilities (in every ward) 2014 • Large government buildings and specific targeted industries in the metropolitan area are connected via “fibre to the premises”. • Pilot wireless mesh network deployed in Khayelitsha, Mitchell’s Plain and Greater Saldanha Bay as alternate last mile access infrastructure. • Every citizen in every town and village has access to affordable 2020 broadband infrastructure. • Citizens in the metropolitan area have access to affordable broadband infrastructure at network speeds in excess of 100Mbps. National Targets • Universal broadband access by 2020 • Public ICT Access within a 2 km radius of anyone by 2019 2030 • Every citizen in every town and village has access to affordable broadband infrastructure in accordance with internationally accepted speeds and standards.
  11. 11. Six core projects Connected Government Connecting Connecting Government Leadership Connecting Co-ordinated Connecting Communities and Integrated to the World Action (Catalytic Telecoms Environment) Connected Connected Citizens Economy Connecting Connecting Households Business
  12. 12. Connecting LeadershipThe objectives of the project are to have integrated and complementary initiatives betweengovernment and the private sector, harnessing limited investment for maximum impact.Key deliverables include:• Set up and manage a Broadband Advisory Council/ Leadership forum which will drive the strategic direction and on-going investment in the broadband environment in the Western Cape.• Setup and operationalise the Broadband Programme Office to manage and direct the entire programme ensuring integration and synergy between projects. This includes responsibility for advocacy and lobbying, securing and managing of funding, commissioning activities needed by the various projects, monitoring & evaluation, etc.• Evaluate and setup of an appropriate institutional model for the long term success of the Western Cape Broadband Programme (SPV/ PP discussed later).• Setup and manage a Way-leave Co-ordination Office to standardise and fast track way leave applications, co- ordinate infrastructure development projects and encourage the sharing of passive infrastructure like ducts, trenches, towers, etc.
  13. 13. Connecting Government2 Core programmes• Part 1: Building a Provincial backbone (Mainly fibre)• Part 2: Connect government facilities (via building municipal infrastructure - mainly wireless, tactical quick wins)Part 1: Build Provincial backbone• Phase 0 (Planning & initial setup)• Phase 1 (District Municipalities – 132 km & 5 POPs) – start in Year 2. 7 months.• Phase 2 (862 km & 26 POPs – fibre backbone to all LGs) . - Start in Year 2, complete in year 3 (approx. 13 months).• Phase 3 (1553 km) - Extend communications to other communities and build redundancy. Requires private sector buy-in and funding contributionsPart 2: Connect Government facilities• Key Provincial Government buildings to be connected to City fibre (already underway).• Connect all schools• Extend school network footprint to connect all government building in the vicinity, with the objective of creating a single government network – reducing cost and facilitating integration of services to citizens.• Build links to backbone
  14. 14. Synthesis: Conceptual design part #1 – Backbonecomponent
  15. 15. Synthesis: Conceptual design part #2 – Municipalcomponent Connectivity to provincial network Local Municipality HQ Other LM buildings in Schools, hospitals same town etc. in same town LM’s fibre optic and/or microwave backbone Other Other towns towns in LM in LM
  16. 16. Synthesis: Conceptual design part #1 & part #2
  17. 17. Phase 1, 2 and 3 overlaid over PGWC sites • Medium term (3 – 10 year) Provincial Fibre Backbone • Phase 1 (District Municipalities – 132 km & 5 POPs) – start in Year 2. 7 months. • Phase 2 (862 km & 26 POPs – fibre backbone to all LGs) • Phase 3 (1553 km) - Extend communications to other communities and build redundancy.
  18. 18. Connecting CommunitiesThis is a project to integrate and expand shared public access to ICT facilities to allcommunities in the Western Cape. Public ICT access facilities (e.g. telecentres, Smart Cape,Cape Access, etc.) are a very important tool to provide poor people with access to technology.It is being used extensively in both developing countries and developed countries.A phased approach will be adopted• Phase 1 will ensure that there are public ICT facilities in every ward by 2014. There are 388 wards in the Western Cape, 233 (60%) of which do not currently have public ICT facilities.• Phase 2 will extend the public access footprint to every voting district by 2018. There are currently 1576 voting districts in the Western Cape.• Phase 3 will evaluate the situation post-Phase 2, determine the gap with the national targets at that stage and put in place a strategy to close the gap.Across all three phases, sustainability models for thepublic access facilities (including entrepreneur drivenmodels) will be explored.
  19. 19. Connecting Households• Create a wireless mesh networks as a “last mile” open access network connecting all households in an urban area (Khayelitsha & Mitchells Plein) & a non-urban area (Greater Saldana)• Utilise network for government-related initiatives e.g. connecting offices, schools, CCTV cameras, Public Warning Systems, smart meters, etc. and delivering government services (e-Government, e-Education, e-Health, etc.)• Partner with private sector to make access to broadband services more affordable to recipient communities – must also consider readiness (eg. skills)• Explore partnerships with the private sector to extend and/ or maintain this network while ensuring “open access”.• Deploy over a two year period (services live by Q1 2014• Seeding the environment with low cost computing devices • 10 000 refurbished computers per annum • Pilot 10 000 other low cost computing devices (targeting schools) • E-Waste Centre (in support of the environment) Medium term goal (by 2020) is that every citizen in every town and village has access to affordable broadband infrastructure. It is anticipated that wireless and wireless mesh systems will have a key role meeting these objectives.
  20. 20. Connecting BusinessThis is a pilot project to develop a model fibre to the premises (fttp) infrastructure in the Cityof Cape Town.Key players in this model will be the City of Cape Town, Western Cape Government, abroadband operating company (a SPV/PPP between government and the private sector) andprivate sector telecommunications service providers.• Pilot 1: Fringe Precinct• Pilot 2: Oude Molen (vicinity of planned Cape Health Technologies Park)• Pilot 3: Khayelitsha business nodes linked to the VPUU programme• Supporting identified priority sectors
  21. 21. Connecting to the World (International connectivity)• Reduce international bandwidth costs to the Western Cape by using government as a demand aggregator and an anchor client to obtain dedicated international capacity• Project viable only taking into account Western Cape Government’s needs and will result in significantly reducing the cost of international bandwidth.• Adding CCT needs and the needs of the schools will only strengthen the business case.• Anticipated to be completed by mid-2013, as it is a key enabler for all of the other projects• Spare capacity available (if any), will be made available on a cost basis to the targeted industry sectors/ areas – which should result in these sectors/ areas experiencing a reduction in the price of international connectivity. Example : what Tenet achieved
  22. 22. Broadband Programme commences with key task of establishing PMO with capacity to driveTimeline with significant milestones programme (April 2012). Only interim capacity PMO formally open at this stage. on 2 July 2012 Various activities needed before anything else can happen, tenders, etc. Phase 1 complete Phase 2 complete March 2014 end 10/2014 Connecting Schools starts by mid 2012 Phase 3 complete end 2/2016 Phase 4 (municipalities) on- Schools connected going by March 2014 Connecting Fibre backbone to K/ MP – Communities run by City of Cape Town, completed by Jan 2014 commenced March 2012 Wireless Mesh Deployment starts in first quarter of 2013 Wireless Mesh network live by March 2014 Open Access ISP (lower cost international connectivity by mid 2012
  23. 23. Institutional model• A ringfenced special purpose vehicle (spv) will be needed for the implementation of this programme.• This entity will primarily be responsible for utilising Government as a catalyst for the creation of affordable provincial wide broadband network infrastructure and services by • Aggregating government infrastructure, complimenting it with private sector infrastructure, and extending where necessary • Aggregating Government demand and providing services to Government on an integrated basis. • Operates as an Open Access Network Service Provider by making the aggregated backbone and access infrastructure available to private sector on an open access basis. Will act as a wholesaler of: • Wholesaler of provincial backbone and access network infrastructure. • Fibre to the premisis as proposed by the “Connecting Business” project. • Wireless mesh networks proposed by “Connecting Household” and “Connecting Business:. SPV will play role of Exchange Management operator (ExMO) for the wireless mesh. • Wholesaler of spare international capacity to targeted industry sector as envisaged in Connecting Business. Will operate as a wholesale open access ISP.• This entity will not provide services to private businesses and end users. The entity is responsible to enable the private sector to provide these services.
  24. 24. Business Model Wholesale Service providers – Government and Private Sector Other Municipalities Etc. S R e e r Purchase/ rent existing v v e Infrastructure & Services i (where affordable) n c u e e Western Cape SPV Services Services (open Municipalities Operating agreement i.e. access basis) Licenced Aggregated demand, Off take Telcoms Service agreement & grants Broadband providers “Royalties” Western Cape RevenueOther possible partners S R e e r v v Debt Debt e i n c facility service u e e Funders Consumers Commercial Banks and DBSA/IDCGreen indicates money flow BusinessesGrey indicates service flow Others
  25. 25. Stepped Approach (linked to Funding approach) “Direct “ Benefit Model<----Policy process maturation------->”Indirect “Benefit Model ---------------------------------------------------Time------------------------------------------------------- Step 1: Startup activities (Broadband Programme Office) Set up Broadband Programme Office to get the programme off the ground. Drive the creation of the Broadband Leadership Council, Start and co- ordinate initial programmes (Schools connectivity, wireless mesh, connecting PGWC building, connecting communities, etc.), advocacy , investigate & setup SPV. Funded by PGWC MTEF funding Step 2: Migrate to SPV SPV based on cost replacement business case motivation. Also leverage EPWP and Municipal Contributions. Funded on the basis of long term contact from PGWC. Will drive the creation of Provincial Fibre backbone (Phase 1 & Phase 2) Step 3: Leveraging Private Sector and social investment the basis of funding Incorporate SPV into either a Public Entity or PPP if required. A Transaction Advisor (TA) must be appointed with Treasury. Private sector commitment added to the funding mix – increased capital leverage for Phase 3.
  26. 26. Conclusion• Extensive research undertaken indicates programme is viable and cost effective.• Leverages future expenses to build economic infrastructure that will take the province into the future.• Position the province well for modernization, efficiency and effectiveness of government.• However, the true value is in the economic development benefits and how it increases the competitiveness of the Western Cape, bringing us on par with our competitors in the developed world, the developing world and the rest of Africa.• Big bold project, but one that is necessary at this stage.• Current approaches are not working. South Africa is rapidly sliding down the international indices. More of the same is not going to work if South Africa is to turn the situation around.• The Western Cape Broadband programme is a true legacy project that will position the Western Cape for the future, but also light the path ahead for the rest of South Africa. Premier Zille - “game-changing infrastructure agenda”
  27. 27. Discussion Contact Details: Jo-Ann Johnston, Chief Director: Strategic Initiatives, Jo- ann.johnston@pgwc.gov .za Nirvesh Sooful, Advisor/ Consultant, nirvesh.sooful@eoh.co.za Presentation downloadable from http://www.slideshare.net/nsooful/