Why
Universal Service Funds
Fail?
2
Parvez Iftikhar
– Former CEO USF Pakistan
– Founding CEO – therefore built it from scratch
– Ran USF Pk. successfully for nearly 5 years
– Now a consultant working in different
countries of Asia and Africa for WB, ITU, ADB,
CTO, and … USAID!
My own Introduction
Africa Latin America Asia Pacific
315 1,133 1,441 544
5,367 5,634
• Most USFs considered ”failing”, as:
• 1/3rd of USFs have not disbursed any funds
• Almost no USF has disbursed everything collected
Nearly US$ 12 Bln
undisbursed!
All figs. in Thousand US$
What does “USFs failing” mean?GSM Study 2013
One very important “cause of failure” that
we will not discuss:
At times Universal Service is a low Priority for
Political Leadership
Not necessarily bad intentioned!
Disclaimer!
Major Issues and Challenges relate to:
Policy
Legislation
Governance Model
Trust
Competition
Operators’ Issues
Broadband
Not clearly laid out
Objectives unclear (eg: coverage & service delv. targets)
Not prepared in consultation with Stakeholders
Not presented in easy-accessible sites/media
No measurement parameters (Milestones/Achievements)
Results not Independently verifiable
No built-in Periodic Review
Policy
Inflexible - with respect to changes,esp. changes in technology
Funding allowance too restricted
USF Levy on Operators:
Has no Maximum Limit
Is not easily adjustable
Not fixed in consultation with stakeholders
Legislation
Governance Model – an example
8
Nominee of Consumers
Nominee of Consumers
Nominee of ISPsNominee of ISPs
Nominee of Fixed-Line SPs
Nominee of Fixed-Line SPs
Nominee of Cellular SPs
Nominee of Cellular SPs
RegulatorRegulator
Ministry: Chief Tech.Ministry: Chief Tech.
Ministry: SecretaryMinistry: Secretary
MinisterMinister
CEO USFCEO USF
PUBLIC PRIVATE
ALL stakeholders on Board!
Nominee ConsumersNominee Consumers
Nominee ISPsNominee ISPs
Nominee Fixed-line TelcosNominee Fixed-line Telcos
Nominee Cellular TelcosNominee Cellular Telcos
RegulatorRegulator
Ministry: Chief Tech.Ministry: Chief Tech.
Ministry: SecretaryMinistry: Secretary
MinisterMinister Political Leadership
Chief Bureaucrat
Chief Technocrat
Telecom Regulator
Cellular Mobile Operators
Fixed Line Operators
Internet Service Providers
Consumer Associations
To create trust – everything on website
All Bidding Docs & Bidding Results
• collected• disbursed• balance
Fund Statistics
Approved Projects & Progress
Performance of Completed Projects
Obstacles & Challenges
• Regularly
• At least Bi-Annually
• By Professional External Auditors
• Make Results Publicly Available
To create trust – USF Own Audits!
Keeps operators on their toes - benefits consumers!
Prevents creation of local monopolies with USF Money
To generate competition: Mandatory Infrastructure Sharing
• Passive Elements – site, tower, …
Rural Telecom Access
• Dark-Pair sharingOptic Fiber Cables
Competition!
Operators are normally reluctant!
• Do not assume the Operators know all about USF - talk to them!Keep close liason’
• Give only “Service” specs in Bids• All interested get equal chancesTech. Neutral
• Efficient Deployment• Innovation• Sustainability
Give Incentives
• USF is a “volunteer” exerciseNo “mandating”
Ensuring Operators’ Involvement - 1/2
• Use whatever Influence USF can manage within the government/sRight-of-Way’
• Make Renewable Energy mandatorySustainability
• Optic Fiber Cables!Backhaul
• Work is normally in very difficult areas/conditionsBe mindful!
Ensuring Operators’ Involvement – 2/2
Important: Use USF for Broadband!
Supply
Demand
No Broadband uptake
unless both sides are
addressed
Voice is now everywhere,
it is Broadband age!
USF must help to make Broadband:
Available Coverage
Accessible Public Access Points
Affordable Low Cost
Usable - Language, - Digital Literacy
Relevant - Professions,- Interests
Independent Organisational Structure
Facilitate Operators
Technology Neutral
Participatory Management
Trustworthy with Transparent Processes
Ensure Competition
Clear & Fair Policy Robust Legal Framework
Summarising
Go for Broadband – don’t forget Demand side!
This is not the end of the Causes
(each country has more of it’s own)
But it’s the end of my Presentation!!!
THANK YOU