Building National Broadband Networks: What works and what doesn t?
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1 Building National Broadband Networks: What works and what doesn t? Roshanthi Lucas Gunaratne, Vigneswara Illavarasan, Sabina Fernando & Ibrahim Kholilul Rohman 3 rd Conference on the Regulation of Infrastructure, Florence, Italy 13 th June 2014
2 Background Broadband plays a key role in Society (Katz, 2010; ITU, 2012; Qiang, Rossotto, & Kimura, 2009) Governments fund National Broadband initiatives through general tax or USO. NBNs of India, Malaysia, Australia and Indonesiawere studied to understand Effectiveness, Efficiency and Impact Primary Research Detailed semi structured interviews with key stakeholders in each country including regulator, implementer, competitors and other stakeholders (8-12 interviews in each country). Questionnaires focused on Background and impetus of NBN, scope and Implementation model, Current status, Effectiveness (coverage and connectivity), Efficiency (level subsidy required), and Impact. Secondary Research BB Plans and other government documents, academic papers, consulting papers etc. 2
3 Internet Ecosystem Infrastructure Affordable User- friendly Devices Attractive Content/ Applications Skilled Users 3
4 India National Optical Fiber Network (NOFN) Point of Interface Block Point of Interface At Gram Panchayat Connectivity State owned Telco and Public Fiber Networks BBNL PoP Pilot-58 GPs connected Target GPs Private Telecom Operators Customers Domestic Access Network Implemented by BBNL SPV (BSNL, Railtel, PowerGrid, GAILTEL ), wholesale bandwidth provider. Costing 4B USD.
5 Malaysia High Speed Broadband Network (HSBB) 1.74Tbps total BW Capacity (from 682Gbps) Connectivity 17 Operators for HSBB Transmission TM Fiber Network Domestic 4 Operators for HSBB Access Access Network 1.43 Ports installed Target 1.3 Ports installed Customers 621,400 Subscribers (43% take up) Implemented by Telekom Malaysia, National incumbent as a PPP with Gov (selected with no tender process). Total cost 3.5B USD, out of which Gov spent 0.75B Conditions to access network commercially negotiated and not transparent
6 Australia National Broadband Network (NBN) Connectivity NBN Co Fiber network Private Telecom Operators Customers Domestic Access Network Implemented by NBN Co (wholesale-only SPV, providing retail telecom SPs with access). Estimated cost 40B USD. Was planned as FTTH initially in 2009 but after Gov changed from Labor to Coalition, in 2013, multi technology approach favored. Still planning stage. Companies Act and Access Act in place to ensure transparent and non discriminatory process.
7 Indonesia Palapa Ring Connectivity Fiber network connecting all islands Private Telecom Operators Customers Domestic Access Network 446 cities implemented by PT Telekom, incumbent (no tender process. 51 in least commercial cities to be implemented through gov subsidized auctions. Estimated cost 1B USD.
8 Cost vs Fiber deployed vs Implementation time 350, ,000 India (4 years) Australia (12years) 250,000 Fiber Route Km 200, ,000 Size denotes implementation time 100,000 50,000 0 Malaysia (1.5 years) Indonesia (6 years) Cost to Government (Billion USD) 8
9 Implemented by separate entity India? Australia Malaysia Implemented by Incumbent Indonesia? Non-Transparent Transparent conditions to Access 9
10 Implemented by special purpose vehicle Australia India Malaysia Indonesia Implemented by Incumbent Completed on Time Delayed Implementation 10
11 Cost to Government (Billion USD) Implementation Entity Scope of Project Open Access Timely implementati on India 4 BSNL SPV Malaysia 0.75 Australia 40 Indonesia 1 Connectivity from Conditions being Block to 250,000 GPdiscussed, Tariff on 301,000 km fiber web TM (selected with no tender process, FTTH in high other operators not industrial areas only considered) PPP 46,986 km fiber Connectivity of whole country through FTTH, fixed wireless and NBN Co Wholesale satellite only SPV 250,000 km fiber PT Telekom (other operators not considered) Connectivity of Eastern non commercial cities 25,000 km fiber No transparent conditions or pricing, but other operators have signed up Clear legislation on non discriminatory open access and transparent pricing Conditions have not been agreed Delayed (2015) Completed on time (2010) Delayed (2019) Delayed (2015)
12 Conclusion Need for demand-side stimulation including, training, awareness campaigns, affordable userfriendly devices and attractive local language content. Open transparent tender process when selecting implementer Taking technology neutrality into account. Open access to network with transparent, nondiscriminatory conditions and pricing. Disbursements tied to implementation miles stones. PPP vs. SPV PPP can lead to faster implementation time as in Malaysia, but may not be conducive to competition. SPV take a long time to set up and high admin burden as in India and Australia. 12
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