Post on 29-Apr-2018
transcript
The Funding Mechanisms for Promoting the Deployment of Broadband
BROADBAND CARIBBEAN FORUM 2016
July14, 2016 Port of Spain, Trinidad & Tobago
There is a growing need to supply exploding data traffic
Source: Cisco VNI Mobile, 2016
Cisco Forecasts 30.6 Exabytes per Month
of Mobile Data Traffic by 2020
2
… a significant broadband gap exists in many developing countries
Mobile–broadband and fixed-broadband penetration, 2015
3
… much needed infrastructure investment across all sectors
Projected Infrastructure Gap (Mckinsey & Co. study)
4
Why PPPs to accelerate backbone networks roll out?
6 Ownership / Risk
Sco
pe
of
En
terp
rise
F
un
ctio
nal
ity
/ S
erv
ice
Off
erin
g
Public Private
Limited Scope
Wide Scope
Management Contract
Network Leasing
IPO Full Privatization
Concession Contract
Outsource (BPO)
BOO
• Emerging international experience in the telecom sector shows that the use of PPP is the best solution to guarantee the interests of the government, private partners and consumers in frontier markets. Reducing operational risk for the public sector Reducing capital risk for the private sector Lowest cost solution and highest quality of service Faster delivery/time to market and expert project management skills Access to private capital Enables high risk /low return projects
• A Public Private Partnership (PPP) is defined as an agreement between the government and private organizations to develop, operate, maintain and market a network by sharing risks and rewards (there are several forms).
Equipment Supplier Contract
BOT
Innovative and best practices PPPs are being implemented that balance public and private interests to the benefit of
citizens (low cost access)
Model
Cooperative
Equity
Concession
Bulk capacity purchase
Management contract
Description Examples
All sector operators (MNOs, ISPs) unite to form a private company (special-purpose vehicle) for the purpose of building, owning, and operating the national backbone as a wholesale operator. The government contributes a subsidy with no related ownership to ensure national coverage, including rural access points, open access, nondiscrimination, and low-cost pricing.
Similar to the cooperative model except that the government obtains equity and shareholding ownership rights in exchange for its contribution. Generally, government divestiture mechanisms are built in.
Traditional build-operate-transfer approach, whereby the government issues a public tender to select a private sector operator to build and operate the national backbone or specific national and cross-border links. The agreement is in the form of a long-term concession (15–25 years) that requires the transfer of the networks back to the government at the end of the concession.
The government, acting as an “anchor client,” issues a public tender for the long-term (10–15 years) supply of bulk capacity (+ 1 gigabit) bandwidth. This model stimulates investment by the private sector through the aggregation of demand. In this case, the partnership is governed by a PPP agreement or supplier contract that establishes the rights and obligation of each party.
Standard management contract agreement whereby the government issues a public tender to select a private operator to build, operate, and commercialize the national backbone (or specific national or cross-border links) for a fee during a short
Burundi national backbone project, 2007
The Gambia, Guinea, Liberia, São Tomé and Príncipe, Sierra Leone, Republic of Congo, in process
Rwanda, 2011; Malawi, in process
Gabon
Source: World Bank ICT Unit Analysis 7
PPP emerging models : wholesale / passive infrastructure hybrid
8
• Government / incumbent to manage and lead infrastructure build
• Jump start investment and service offerings
• Minimize duplication of investment / promote the low cost solution
Model
Passive
Wholesale / Passive
Own use / passive
Description Examples
Build-out of the Next Generation National Broadband Network (NGNBN) segmented into three components. BOO model. SingTel (incumbent) outsources first layer (passive) to OpenNet, Second layer (wholesale) to Nucleus Connect, Retail to (RSPs).
Build-out of the Qatar National Broadband Network (Q.NBN) as the FTTH carrier. Q.NBN (100% owned SPV) to provide wholesale and passive infrastructure to retail operators.
Rwanda: build-out of national backbone network. Government ownership with outsourcing of operation, maintenance, commercialization to private sector (KT). Four ducts: one for government use and three available for private sector use. Madagascar: government to subsidize build-our of passive infrastructure (towers and renewable energy) open access to private sector
Singapore - deployed
Qatar
Rwanda – deployed
Madagascar
Since 2007 the Bank has approved regional connectivity programs (WARCIP, CAB, RCIP, CARCIP…) amounting to $1.2 billion
involving more than 30 countries
Unique opportunity for international connectivity to least connected countries in W. and Cen. Africa Project & Financing: 17,000 km from South Africa to France, connecting 23 countries for a total cost of US $700 million. Launch of commercial service in Dec. 2012 Ownership: Private sector consortium led by France Telecom-Orange Structure: Partnership btn consortium and landing parties with catalytic WB funding for small, FC and landlocked states along the coast of Africa .
9
Caribbean Regional Communications Infrastructure Program (CARCIP)
CARCIP (US$ 45 million, SVG, SLU, GRE, Nicaragua):
• Connectivity: PPP for provision of access to submarine cables, national backbone networks, government networks
• Support to regional ICT industry
• Platforms for e-services
10
Pacific Regional Connectivity Program (US$ 190 million)
Phase 1
Phase 1: Tonga-Fiji Connectivity Project (FY12), US $ 34 million Phase 2: Solomon Islands Connectivity Project (FY13) Phase 3: Samoa Connectivity Project (FY13/14) Phase 4: Vanuatu Connectivity Project (FY13/14) Phase 5: Northern Pacific Connectivity (FY14/15)
Pacific Regional Connectivity Program
11
PPP Challenges in the Caribbean
Fiscal surprises
Deal closing delays
Failures to launch & missed
opportunities
What? Why?
Inappropriate risk allocation
Inadequate due diligence and preparation
Insufficient fiscal oversight
Unclear or flawed transaction processes
Gaps in due diligence and preparation
Insufficient execution capacity
Unclear development processes and roles
No clear criteria for project selection
Insufficient project preparation capacity
Lack of awareness of PPP potential
Lack of regional coordination mechanisms
Source: A PPP Policy Framework for Grenada -St. George’s, 10-13 June 2014
12
Objectives of PPP Policy: how will PPPs be managed?
Ensure PPP projects are implemented according to guiding principles:
• Value for money
• Fiscal responsibility
• Transparency
• Environmental and social sustainability
• Partnership
Source: A PPP Policy Framework for Grenada -St. George’s, 10-13 June 2014 13