Management of USAFs: Detailed Analysis of Operating USAFs

1. Management of Universal Access Funds for Telecommunications Regulatory Board of Cameroon Module Two: Detailed Analysis of Operating USAFs 7 9 February 2011

2. Countries Studies

Latin America

Peru

Colombia

Chile

Africa

South Africa

Uganda

Nigeria

Ghana

Kenya

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. PERU

5. Context of the Peruvian ICT Sector

Teledensity in 1994 for fixed lines was 3.21% and mobiles was 0.22%

Liberalising the telecommunications market started in 1991 and completed in 1999

Peru has two interrelated mechanisms for ICT development

the Fund for Investment in Telecommunications (FITEL)

the Projects Office of the Vice Ministry of Communications of the MTC

Government held a contract with Telefnica de Per (incumbent) since 1994 although it benefitted cities rather than rural areas

TdPs share of investments declined from 1998 (80%) to 2000 (50%)

6. FITEL: El Fondo de Inversin en Telecommunicaciones Rurales (Rural Telecommunication Investment Fund)

Background

Established in 1993 to provide equity finance for telecommunications in rural areas and projects of social interest

in the interest of the rural communities

contributing to their socio-economic development

have the greatest social benefit

Legislation: Texto nico 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)

Regulation: Regulation of Law No. 28 900 and approved by Supreme Decree N0 010-2007-MTC


Fund administered at the beginning was OSIPTEL, regulatory agency

In 2006 the fund was transferred out of OSIPTEL and became separate entity under the Transport and Communications Sector.

The fund aims to:

Reduce the gap in access to telecommunications services in rural areas and places of preferential social interest.

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.

Encourage private sector participation in providing telecommunications services in rural areas and places of preferential social interest.

Universal access defined as access to a set of essential services that includes voice telephony, fax and data, and free emergency calls.


Funding

1% of total annual gross revenues billed and collected by operators

Interest income generated by FITEL

Donations and contributions

For Financial Year 2008, FITELs budget was USD 32.8 million

FITEL resources, end of Financial Year 2008, were estimated at USD 246.9 million

The Treasury holds the allocated funds

Though collection of funds started in 1994 the first project was not funded until 1998


Intervention methodologies

Originally used out-based aid (OBA) approach with a minimum subsidy tender

Now use competitive bidding to distribute subsidies

Since 2004 small operators can request for subsidies for self initiated projects

A list of projects eligible for subsidies determined by the greatest social benefit has been created

FITEL cannot allocate funds to areas that already have access

Priority localities to receive FITEL funding include:

rural towns (with a population of more than 400 inhabitants and less than 3,000 inhabitants)

district capitals

towns in high social interest areas

(as determined by the government)


Achievements

By January 2005, over 6,500 rural villages had at least one public phone

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

FITEL has disbursed:

US$ 18,800 subsidy per locality in 1998



Collected a total of $143,063,602 and disbursed $45,076,256 (32%)

Provided subsidies to rural health networks, agrarian information systems, community telecommunications network projects etc

In 2008 and 2009, FITEL awarded subsidies for

Broadband services to rural areas.

11. The Projects Office of the Vice Ministry of Communications

The objective of the MTC communication projects is to promote democratisation of communication services and ICTs

Projects are financed by state resources, which are funds often greater than those available to FITEL

Projects implemented by the MTC Office up to 2004 include:

Communal Communication Support Project 757 systems installed for television through satellite reception and low power television broadcasting

Radio Spectrum Control Project

Implementation of Rural Telecommunications Project Rural Internet

Peruvian Communication Platform project

Rural TIC Settlement Project

12. Out-Based Aid (OBA)

A minimum subsidy auction with an output-based disbursement schedule.

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.

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.

OBA allows for some payments to be specifically deferred for disbursement at predefined periods of time.

The mechanism provides leverage for the fund to enforce deployment requirements because continuing payments are based on satisfactory performances.

13. Sources for Further Information on Peru

http://propoor-ict.net/content/pdfs/03_UNDP_Report_3_4-Peru.pdf

http://www.fitel.gob.pe/

http://giswatch.org/sites/default/files/GISW_Peru.pdf

http://www.inteleconresearch.com/pdf/intelecon%20paper%20-%20ua%20%26%20rur.pdf

http://www.inteleconresearch.com/pages/documents/UASFFunds2009update-Oct2009.pdf

http://www.inteleconresearch.com/pdf/ua%20funds%202004%20update.pdf

http://propoor-ict.net/content/pdfs/03_UNDP_Report_3_4-Peru.pdf

http://irispublic.worldbank.org/85257559006C22E9/All+Documents/85257559006C22E9852570A0005E1F14/$File/Universal0Acce1mmunications0and0ICT.pdf

14. COLOMBIA

15. Context of the Columbian ICT sector

Introduced liberalisation in 1991

Since 1997 telecommunications sector registered the second highest level of investments (22%)

Competition increased in 2003 when the government privatised the state-owned National Telecommunications Company

Through increased competition Columbia has gained reasonably modern telecom infrastructure but one which primarily serves higher populated areas

This has increased the imbalance between urban and rural areas

Colombia ICT programmes consist of Connectivity Agenda, Compartel and Computers for Education

16. Fondo de Comunicaciones (COMPARTEL)

Background

Established in 1994 but started operations only in 1999

The funds programme is called COMPARTEL, which auctions social telephony projects

Based upon the Chilean UA model

Fund administered by the Ministry of Information Technologies and Communications

Supports community telephones, community Internet access centres and Internet access at government facilities (schools, hospitals, city halls, military)

The Program guarantees the operation and maintenance of the telephones for 10 years.


Policy Objectives

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.

Improve the coverage of telecommunications services in those towns throughout the country where the provision of these services are inadequate, through community telecommunications solutions.

Promote the development of telecommunications services in rural areas to increase the competitiveness of regions.

Facilitating the access of ethnic minorities and the disabled population of the country's telecommunications services


Funding

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

Contributions from license fees

Contributions from the government



Now use competitive bidding - Winning bidders are selected based on meeting technical requirements with the smallest subsidy requested.


Achievements

22,242 population centres covered with 5 million people benefiting

At least one rural community telephone per every 150 inhabitants

Subsidised installation of Internet Community Access Centres accessible to an estimated 5.2 million people including 2.5 million school children

Fund has collected US$448,599,640 and disbursed US$165,995,817 (37% of that collected)

Examples of projects funded between 2007-2009:

By November 2008, Compartel had connected 15,500 public institutions to the internet of which about 11,000 are in schools.

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.

20. Sources for Further Information on Colombia

http://lcweb2.loc.gov/frd/cs/profiles/Colombia.pdf

http://giswatch.org/en/country-report/civil-society-participation/colombia

http://www.crcom.gov.co/index.php?option=com_content&view=article&id=594&Itemid=191&lang=en

http://archivo.mintic.gov.co/mincom/faces/index.jsp?id=2971


http://irispublic.worldbank.org/85257559006C22E9/All+Documents/85257559006C22E9852570A0005E1F14/$File/Universal0Acce1mmunications0and0ICT.pdf

http://www.ictregulationtoolkit.org/en/PracticeNote.aspx?id=3147

21. CHILE

22. Context of the Chilean ICT sector

Privatisation and competition in the telecom sector introduced in 1988

Fixed line teledensity in 1992 was 9.5 %. This increased on average by 15.1% between 1994-1998

Mobile telephony penetration in 1992 was only 0.8%. Prepaid services commercially launched in 1997 has led to higher growth

In 1991 the percentage contribution of telecommunications to the GDP was 1.8%

In 1994 competition was improved, interconnection charges were fixed and the law introduced carrier and multicarrier service

23. Fondo de Desarrollo de las Telecommunications

Background

Established in 1994

Fund Administrator Subtel, regulatory agency

Funding

Governments budgetary contributions

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

FDT has disbursed $29,981,000 (100%) of funds (2006)


Intervention methodologies:

All operators are eligible to receive funds

Projects are requested/proposed by the community, the municipality or by an operator/entrepreneur

The fund administrator then reviews, evaluates and develops for funding process


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.


Achievements

Met the target to provide public telephone service to about 6,000 unserved localities during the period from 1995-1999.

After that achievement, refocused on telecentres projects plus backbone, broadband and mobile network expansion.

25,000 payphones have been installed in around 8,000 population centres (2006)

By 2006 less than 150,000 (1% of population) was without basic telephone access

Internet access for rural schools

Projects and programs financed by the fund during 2007 2009 include:

fibre optic backbone extension

WiMAX installation

rural broadband

26. Sources for Further Information on Chile

http://www.itu.int/ITU-D/ict/papers/2002/SCM/TK.pdf

http://giswatch.org/sites/default/files/Chile.pdf



http://www.eclac.org/drni/noticias/noticias/7/26637/Christian%20Nicolai.pdf

27. SOUTH AFRICA

28. Context of the South African ICT sector

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

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

ISPs and Value Added Network Services (VANS) were fully liberalised

By 1993-94 period there were 3.66 million main telephone subscribers and about 50,000 public telephones

By 1995 there were 300,000 mobile subscribers


Telecommunications Green Paper 2005 to consult with the public

Key telecom policy objectives of the Government

achievement of universal service

economic empowerment of historically disadvantaged South Africans

provision of a wide range of telecommunications services to stimulate and support economic growth

effective use of telecommunications for social and infrastructural development

Progress from universal access to universal service

The policy identified internal (affordability, legislative/regulatory frameworks etc) and external (technology changes, convergence etc) drivers of change


Adopted policy and regulatory strategies

Imposing public service obligations for community access and setting different rates accordingly

Assign tariff differentials for targeted groups

Segmenting services market and open for competition

Regulate network and service provision, interconnection, quality of service, frequency spectrum

Facilitation of flow of investment funds

Carry out of various public consultation processes


South Africa set Universal Service targets

Telekoms fixed rollout target in 1996:

2.7 million new lines

1.7 million lines in underserved areas

120,000 pay phones

Access for 20,246 priority customers in 3,204 villages

Mobile:

Vodacom (1993) -22,000

MTN (1993) 7,500

Cell C (2001) 52,000

High speed Internet access to 2,500 public schools and 2,500 rural clinics

Problems with the specified targets was market uncertainty, potential error in network growth predictions, lack of flexibility, and the operators inability to comply creatively

32. Universal Service Access Agency of South Africa (USAASA)

Background

Established under the Consolidated Telecommunications Act 1996 as the administrator of the Universal Service Fund

One of the objectives ofthe Act (a) promote the universal and affordable provision oftelecommunication services

Objectives:

promote the goal of universal service

encourage, facilitate and provide guidance in respect of any universal access scheme

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.


Funding

0.2% of all operators revenues (2009)

The 2001 Telecommunications Amendment Bill limited annual contributions to the fund to 0.5% of revenue

At current levels, annual contributions are in the range of US$ 18.4 23.5 million

From 1998 to 2008, total operators contributions were US$ 81.8 million

Total appropriations or money budgeted for specific use in the same period was US$29.2 million


Intervention Methodologies

Initially supported telecentres and public payphones, today extends to E-school cyberlabs, ICT telecontainers and community digital hubs

By 2008, 155 telecentres have been established. Today focus on replacing obsolete equipment

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

In May 2007, ICASA the regulator merged the USALs and issue one Provincial Under-Serviced Area Network Operator (PUSANO) license per province.


Intervention Methodologies

Telecentres provide a number of services and have diverse ownership and governance structures of individuals, enterprises, NGOs and CBOs

Multi-Purpose Community Centres (MPCCs)

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

Community Digital Hubs advanced ICT facilities to provide human capacity building and technical support to remote Telecentres and Cyeberlabs

Today Broadcasting is a part of the Funds mandate under the National Broadband Policy


Challenges

Affordability of services

Difficulties in forging partnerships

Need monitoring and evaluation

Need more effective relationships with stakeholders

Better coordination of operators USOs

Stronger agency at provincial levels

Not in line with national priorities

Need stronger image

Key Success Factors

Bottom-up strategy

Research

Multi-stakeholder partnerships

Networking for scaling up

Technology

Developmental planning

37. Sources for further information on South Africa

http://www.ictportal.org.za/documents/d00031/Universal_Service_Access_Lewis_Nov2006.pdf

http://www.polity.org.za/polity/govdocs/green_papers/telecomms.html

http://www.internet.org.za/telecoms_act.html#Universal_Service_Fund

http://www.info.gov.za/acts/1996/a103-96.pdf

http://www.internet.org.za/telecoms_act.html#Establishment_and_control_of_Universal_Service_Fund

http://www.ictportal.org.za/index.php

http://www.itu.int/ITU-D/afr/events/FTRA/2009/docs/FTRA%20-UniversalAccessFunds.pdf

http://www.cprsouth.org/wp-content/uploads/2010/12/Policy-brief_Calandro_Moyo_Policy_brief-FINAL.pdf

http://www.itu.int/ITU-D/afr/events/FTRA/2009/docs/Sepulveda_Report_USFs.pdf



http://www.usaasa.org.za/

http://www.ictportal.org.za/documents/d00017/SA_2004_Review.pdf

http://www.internet.org.za/telecoms_act.html#Objects_of_Act

38. Uganda

39. Context of the Ugandan ICT sector

Penetration rates by 2001

Fixed Line 0.22%

Mobile 0.1%

Internet 0.02%

In 2001 there were two fixed line operators; Uganda Telecom & MTN Uganda with one Mobile operator; Celtel Uganda

Communications Act 1997 introduced liberalisation with the following sector specific policy objectives:

Establish an independent regulator

Increase teledensity from 0.28% to 2.0% by 2002

Improve communication facilities and quality of service

add a variety of new communications services.

Serve the unmet customer demand

Increase the geographical distribution and coverage of the services throughout the country.

40. Context of the Ugandan ICT sector

41. Rural Communications Development Fund (RCDF)

Background

Established in 2001 while implementation of programmes began in 2002

Administered by Uganda Communications Commission

RCDF Board set up in 2002 to oversee management

Uganda is the first African country to develop USF covering ICTs and not just basic telephony

Operators were obliged under their licences to declare what areas they would reach by July 2002

UCC carried out a baseline study on Policies and strategies best suited for rural communications in Uganda which led to:

Rural Communications Development Policy

An operating manual for the UAF addressing

A Universal Access Fund Manuscript


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

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.

To provide access of a reasonable distance to basic communications

To ensure effective utilisation of the fund

To promote the use of ICT


Funding

1% levy on all sector participants including telecom operators, the postal service, couriers and ISPs.

All players who are likely to benefit from the fund contribute equally in proportion to their revenues

Government contributions

World Bank has made contributions as well

ITU has also supported projects e.g. pilot MTC project in Nakeseki

In addition there had been funding from other multilateral and bilateral agencies



Use smart subsidies / reverse auction. This emerged as a best practice as it prevents long-term dependency on subsidy

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

Every service in every area was subjected to a viability test to calculate the maximum one-time subsidy

Internet access in schools is also subsidised by RCDF

RCDF generally finance projects that provide telephony, internet POPs, internet exchange points, internet cafes, telecentres, public payphones and interestingly content development

For fiscal year 2008-2009, the RCDF levy generated USD 4.0 million and development partners contributed an additional USD 2.0 million


Achievements

In 2004 Uganda completed first countrywide tender process to have a public telephone in each of its approximately 900 rural sub-counties

By August 2008, the fund had financed the installation of:

15 telecentres

computer labs in 106 rural schools

1,704 payphones

54 internet cafes

52 Internet POPs

55 basic ICT training centres

78 district web portals


RCDPs second policy development process


Future Plans

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

The analysis has identified as challenges lack of awareness, low literacy, lack of access & affordability, energy sustainability, quality of services

The new plan aims to install one payphone per 500 people in rural areas and establish one community information centre per rural district

In order to accomplish these objectives, the UCC estimates that it will need funding of US$ 17.2 million per year.

48. Sources for Further Information on Uganda

http://www.giswatch.org/country-report/2008/uganda

http://www.itu.int/ITU-D/univ_access/mcts/

http://www.ict.go.ug/

http://www.ictregulationtoolkit.org/en/PracticeNote.aspx?id=3144

http://www.ijcir.org/specialissue2009/article5.pdf

http://www.idrc.ca/en/ev-86250-201-1-DO_TOPIC.html

http://www.ucc.co.ug/rcdf/rcdf-Policy.pdf

http://allafrica.com/stories/201012020087.html



http://www.itu.int/ITU-D/afr/events/FTRA/2009/docs/Sepulveda_Report_USFs.pdf

http://www.ucc.co.ug/ucaCap106LawsOfUganda.pdf

49. NIGERIA

50. Context of the Nigerian ICT sector

Penetration rates by 2003

Fixed Line 0.66%

Mobile 2.35%

Internet 0.04%

Internet users 0.56%

The Nigerian Communications Commissions Act was enacted in 1992 and the Nigeria Communications Commission (NCC) was created in 1993

51. Universal Service Provision Fund (USPF)

Background

Established in 2003

Fund administered by the Universal Service Provision Fund Board

World Bank assessment (2005) of demand, preferences and affordability, status of the telecom sector, outlook and prospects for coverage,

and identified regional challenges and the required size of the programme of intervention

The World Bank designed the project, processes of disbursement, and helped tendering and licensing first pilot project

The funds initial focus was on community communications centres and mobile network expansion.


Preferred operating model was public-private-community-partnerships

public sector contribute fiscal incentives

private sector the primary driver for implementation and sustainability

operated by operators, government and donors

The USPF has a widely representative Board

high officials from the line ministry and the regulatory authority

four eminent private sector stakeholders.

The board supervises policy directions and the management of the fund


Policies

ensure that the USPF serves public interest in the provision of ICT applications and services

creates an enabling environment to improve use of ICTs

assures accessibility and availability of telecommunications and ICT infrastructure and services

facilitates provision of infrastructural development

promotes technological innovation & competition

provides access for business to improve their development

adopts methods of attaining greater Universal Access and Universal Service.


Legislation

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


Funding

Main funding source is 50% of annual operators levy

Appropriations by the National Assembly

Contributions from the NCC

Income from its operations and investments

Donations, loans and grants

Fund is professionally managed by an independent investment management firm


Use both top-down and bottom-up processes for project initiation

Funds allocated though competitive bidding

Often includes minimum subsidy auctions in the competitive bidding process


Achievements

USPF has subsidized 47 wireless base stations, internet connections for 109 schools in 2007 and 365 schools in 2008

In April 2008, the fund had US$ 64.6 million in total resources

Fund plans to

subsidize ICT facilities for a further 550 schools

establish 109 Community Communications Centres

accelerate the expansion of mobile coverage through subsidies of passive sharing of infrastructure such as towers and generators in 2009

57. Sources for further information on Nigeria



http://www.ncc.gov.ng/interconnection/Legislative-Guidelines%20on%20Interconnection.pdf

http://www.ncc.gov.ng/RegulatorFramework/Nigerian%20Communications%20Act,%202003.pdf

http://www.ictregulationtoolkit.org/en/Publication.1437.html

http://www.ncc.gov.ng/

http://www.uspf.gov.ng/

http://www.itu.int/ITU-D/ict/index.html

58. GHANA

59. Context of the Ghanaian ICT sector

Fixed line penetration has been declining since 2004.

Huge recent mobile growth with high level of competition

In 2004 there were 5 wireless network providers, 4 of which were mobile operators

Two major fixed line service providers in 2005

Polices and legislation pertaining to USAFs

National Communications Authority Act 769 of 2008,

National ICT4AD Policy, 2003,

Electronic Communications Act, 2008, Act 775

National Communications Regulations 2003, L.I. 1719.

Electronic Transactions Act 772, 2008

National Telecommunications Policy, 2005 (NTP-05)

60. Context of the Ghanaian ICT sector

Penetration Rates (in 1000s)

61. Ghana Investment Fund for Telecommunications (GIFTEL)

Background

Established in 2005

Administered jointly by the government and the private sector through the GIFTEL Board of Trustees

An investment fund that collects money from telecommunications sector licensees and through licenses defines obligations to achieve UA and US

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)

62. Ghana Investment Fund for Telecommunications (GIFTEL)

Funding

1% of fixed operators net revenues

Funds allocated by the Parliament

Money accrued from the Funds investments

Grants, donations etc.


Allocated on a competitive basis through competitive bidding

Public-private-partnerships used in allocation process

Requires a minimum number of bidders

Provides initial capital investments and start-up costs

May seek supplementary funding for a particular project

Assess long-term financial sustainability and meeting the policy objectives

Multi-purpose Community Telecentres (MCTs) a priority

63. Ghana Investment Fund for Electronic Communications (GIFEC)

Background

Established in 2005

Similar USAF policies to GIFTEL but has a broader mandate in communications

Encompasses all electronic communications rather than only telecommunications thus covering provision of basic telephony, internet, multimedia, and broadband


Funding

Contributions from operators and service providers

Funds provided by the Parliament

Monies that may accrue to the Fund from investments

Donations, grants and gifts

Any other monies that may become lawfully payable to the Fund



Support rural telecentres (through competitive grants) and public telephony and Internet POPs (by open tender)

Achievements

Funding shared mobile operator facilities

Establish and manage community information centres (CIC) providing videos, computers, internet, photocopiers, fax etc. 120 operational since 2008.

Rural payphones roll-out in conjunction with MTN

Rural Business Centres and School Connectivity, but slow implementation

39 common telecom facilities in 2008 providing access for 273 communities

Mobile operators are extending networks at a faster rate through competition than GIFECs programme roll-out

66. Sources for further information on Ghana

http://www.gifec.gov.gh/

http://www.researchictafrica.net/new/images/uploads/SPR20092010/Ghana_ICT_SPR_2009-2010_v02.pdf



http://www.ict.gov.gh/Telecom%20policy/Ghana%20Telecom%20Policy%20Final.pdf

www.uneca.org/disd/events/accra//Financing/giftel%20presentation.ppt

67. KENYA

68. Context of the Kenyan ICT sector

Four mobile operators with a total subscription of 20.1 million

Mobile penetration at 51.2%

Mobile coverage is at 86% of the population within a signal reach and land coverage of 35%

7.8 million Internet users

247,972 Fixed lines

419,047 Fixed wireless

18,626 Broadband subscriber

69. Universal Service & Access Fund - Kenya

Baseline study carried out in 2004 assessed the ICT market, evaluated gaps and established the rural demand for ICTs

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.

Legislation: Kenya Information and Communications (Amendment) Act No. 1 of 2009


USF established in 2010, administered by the Communications Commission of Kenya, the regulator.

The process was delayed due to a number of factors such as;

Legislation took too long to be enacted

Uncertainty as to who should implement the fund and programme

Indecision on what percentage of levy to impose

Consultations for industry buy-in

Political and vested interests


Proposals for funding

All licensees to contribute to the fund

Levy between 0.5% -1% but has to be realistic

Contributors to the fund to be involved in decision-making

Independent body to manage the Fund

Applying smart subsidies

Current status

16 School-based ICT centers established

Community ICT access points created

8 ICT centers for secondary schools

10 eResource centers in rural community public libraries in progress

Digitization of the secondary school curriculum underway

Computerization of health facilities in Nairobi underway

Strategic Plan for 2005-2010

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)

Total disbursement up to 2008 was US$31,718,060

By 2008, 155 telecentres had been established

Each USAL licensee for 27 identified areas receives US$ 735,000 subsidy from the Fund spread over 3 years.

Uganda

1% levy on all sector participants

Government, WB, ITU and other multi and bilateral agencies contributes

Smart subsidies

Minimum one-time subsidy

Finance a range of projects

public telephones in each of approximately 900 rural sub-counties

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

73. Comparison of Operating African USAFs Country Funding Source Allocation Process Disbursement Nigeria

- 50% of annual

operator levy

Appropriations by the National Assembly

Contributions from the NCC

Use both top-down and bottom-up processes for project initiation

Funds allocated though competitive bidding

Often includes minimum subsidy auctions in the competitive bidding process

- Total resources by April 2008, US$ 64.6 million - subsidized 47 wireless base stations, and internet connections for 374 schools Ghana

1% of fixed operators net revenues

Funds allocated by the Parliament

Allocated through competitive bidding and open tender

Public-private-partnerships

Need a minimum number of bidders

Supports initial capital investments

Priority MCTs

Completed 39 common telecom facilities enabling the extension of service to 273 communities

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