News about a USOF Mobile Handset Scheme

It has been reported that USOF India may fund a scheme wherein mobile handsets are given to female members of poor rural households who have completed 100 days of work under India's rural employment guarantee scheme-MNREGA. Eligible beneficiaries would be identified by the state administration and handsets bundled with connectivity and m-government content such as health records and entitlements transfers would be provided by the USP chosen either through bidding or on nomination basis. Present USOF Rules would require choice of USP by bidding.

While the focus on women and m-government is welcome, I am not sure that mobile handsets are needed to be subsidized. It is the connectivity and content that USOF could focus on instead. If these are available, handsets (even second/third hand) would be purchased in any case. It is however a fact today that rural women may not own handsets. This was noticed during the implementation of USOF's Sanchar Shakti scheme. 

USOF may have to think of adequate safeguards to prevent transfer of the phone to non beneficiaries and false claims by USPs as implementing such schemes can be  administratively very challenging.

Nigeria's Universal Service Provision Fund-Lessons Learnt Way Forward & ITU's GSR 13 Discussion Paper

It has been reported that the Nigerian USPF ("which is a special fund set up by the Federal Government under the Nigerian Communications Act 2003, designed to provide telecommunications and ICT services to un-served, under-served and deprived groups and communities in the country") will under its new five year Strategic Management Plan (SMP),  build 1000 BTS per year and also lay 15,0000 kms of OFC . It will afurther create Internet POPs in 25 clusters by 2017.

The previous SMP which ended in 2011 revealed lessons that are perhaps  common across the globe. These include use of bidding for transparency, the need to "follow an  integrated approach to project strategy and execution would lead to increased participation of industry operators; ensure implementation of well-planned and adaptable projects that suits a variety of ICT schemes.." etc.

The problem with the earlier SMP include that,

“...[P]rojects were designed and defined using a ‘one size fits all’ approach, thus USP intervention, in some cases, did not directly address the specific needs of the beneficiaries, among others challenges,”  as stated by partner KPMG chief said.

I have written about this earlier as for example at http://ictsforall.blogspot.in/2013/07/usof-indias-unspent-balance-under.html.

Many of these thoughts are echoed in ITU's discussion paper on Universal Service Funds for the Global Symposium for Regulators 2013. (Please see  http://ictsforall.blogspot.in/search/label/GSR%202013.) This paper has outlined 12 success factors for effectiveness of USFs including policy and regulation, lexibility, transparency & accountability, active participation & inputs from all stakeholders, comprehensiveness of projects to cover all sustainability elements etc. I will write more about this soon.

USOF India's Unspent Balance under Criticism

In my previous post titled, "Questioning the Efficacy of Universal Service Funds: GSMA Calls for Re-evaluation and Reduction of the Universal Service Fund Levy,"  I had written that funding for Universal Access/ Universal Service is mostly from either the general budget or levies on operators. Given that it imposes a form of taxation and given that it is expected to meet certain legally, politically and ethically important targets, the subject of US in general and US funds (USFs)  in particular is always under scrutiny and debates on this issue range from questioning the need for US regulation in a competitive  market to arguing in favour/against inclusion of broadband  in its purview. Off late the balance seems to be tilting in favour of USF for funding national broadband plans and nation-wide OFC networks.  Thus discussions range from trashing the concept to seeing it as a vehicle for achieving state of art ICT services.

I had mentioned that the April 2013 GSMA Survey and Report available at GSMA Calls for Re-evaluation and Reduction of the Universal Service Fund Levy question the efficacy of USFs as means of  achieving the objectives of US.  As far as India is concerned there is praise for transparency in financial reporting and criticism for " inadequate or misguided articulation of USF objectives and strategy” that have encouraged urban rather than rural roll outs. (Please  also see my post on USOF India.). The findings of the survey including inter alia the large unspent balances point to the need for better institutional mechanisms that guarantee transparency, accountability and competitive neutrality while still being tailored to a country’s local context. Further we need to adopt a more innovative and flexible approach to US funding. We need to consider more bottom-up PPPs, more demand-driven projects and also projects that address demand side gaps to penetration of ICTs.

I have written earlier comparing the flexible bottom up multi-stakeholder approach of Sanchar Shakti programme that succeeded, with the more rigid, operator dependent approach taken in USOF's ICTs for PwDs project that did not. 

Traditionally, USFs have folowed a supply centric, top-down  approach wherein gaps are identified by the USF Administration and then projects are designed and bid out to select the Universal Service Providers (USPs). This approach may however not be flexible enough to meet the needs of various sections of the population and to address different reasons for the access gap.  Hence there is a need to consider a more flexible, consultative, collaboartive and multi-stakeholder approach to designing USOF programmes.

Again, USFs in many developing countries have problems of under-spending whereby funds continue to accumulate as not enough projects are initiated in comparison to collections.  This is partly on account of difficulties in conceiving appropriate projects meet diverse and ever evolving stakeholder requirements.  I believe that USFs set aside a percentage of available funds to be utilised for demand-driven projects emanating from the user community. Broad eligibility criteria could be pre-decided and placed in public domain along with transparent but mainly qualitative evaluation criteria and procedures. This would allow USF Administrations to maintain a shelf of projects that are useful and pertinent to end users. This is especially true for needs that are more application-centric such as projects for marginalised communities that may have a major content and capacity building component. This approach would lend a much needed dynamism to USF activities. It would also help USOF address demand side gaps in telecom penetration as opposed to supporting only supply side initiatives.

An article dated 28.7.2013 titled "Disconnect in India's rural telecom fund; $4.65 bn idling” highlights the unspent balances of USOF and comments of Administrator USOF thereof.It quotes Gabriel Solomon, the public policy head of Groupe Speciale Mobile Association (GSMA), the global association for mobile companies as having said that, 

"One  of the main reasons why such funds remain unused in many countries is that a competitive industry like telecom moves at a pace which these funds cannot keep up with," 

and that

"In a matter of a few years, the mobile industry in India has built huge infrastructure, connecting hundreds of millions of people. Why even consider a USOF (Universal Service Obligation Fund) now? If the private sector is appropriately incentivised it will always outperform the public sector."

As per the same article, the USOF Administrator has clarified as follows

"Out of the Rs.27,949.91 crore left unused, some Rs.20,000 crore will be deployed for the national optic fibre network project and another Rs.3,046 crore for installing 2,199 mobile towers in the nine Left-wing extremism-affected states."

"The criticism is valid for the time being. But we are evolving. As the projects start rolling out, we will need more funds," he said, adding the projects include one to link each of India's 250,000 village councils with high-speed data cables."

USOF India has many good schemes to its credit.(Please see many previous posts USOF India). What is  perhaps needed is a more imaginative, flexible approach and assurance of a level playing field between private and public sector operators.

Bhutan's Broadband Network

RaiTel which is a telecom company parented to the Indian railways is to set up Bhutan's Broadband Network. This network will connect all government institutes,  universities and other important institutes.  An agreement has been signed io this effect with the Ministry of Information and Communications of Bhurtan. The project is to be completed within six to eight months. Railtel is also involved in USOF projects including OFC for N.E states and NOFN.

The Long Term Effect of Too Low Wholesale Broadband Acess Tariffs

Effective regulation of tariffs is never an easy task. One argument would be to leave tariff alone but that luxury unfortunately is unavailable when markets are less than competitive. 

Regulating access to incumbents' infrastructure is often a part of ensuring service competition. I have written about this earlier under http://ictsforall.blogspot.in/search/label/Tariff. 

However, this tool is to be used with care. A European Commission Press Release dated 25th July 2013 highlights the need to balance short term gains of lowering access charges with the long term impact on investment. 

This press release relates to the suspension of the Austrian Telecom Regulator's calculation of regulated charges for access to the Austrian incumbent's broadband network on grounds that 

" it threatens to impede efficient investment in broadband, and could also create artificial barriers in the internal market." 

and

"The inconsistent access prices across the EU have a dampening effect on investment in modern networks. TKK's proposal must give national and multinational operators the right incentive to replace the old legacy copper network with modern technology, and provide stability and predictability."

The Mighty Mobile

In continuation of my last post on The Era of Mobile Internet, I would like to share with readers another unique initiative to provide free access to Wikipedia on Mobile Phones including zero.wikipedia.org, which is a text-only version of Wikipedia's mobile site, optimized for slower connections.. This will benefit about 60 million Indian subscribers and content will be available in English, Hindi and 18 other Indian languages. 

It is reported that this is a 3 year partnership and that "Wikipedia Zero was first rolled out in Uganda in April 2012 with mobile operator, Orange."

I think this demonstrates one of the possibilities of mobiles as a means of Universalizing the benefits of ICT enabled services. 

The Era of Mobile Internet

I have been writing about the benefits of mobile value added services. 

For a developing country where personal computer penetration is very low and power is an issue, mobiles/smart phones are the key to penetration of ICT enabled knowledge and services. India has a host of m-government initiatives to its credit including the Universal Service funded Sanchar Shakti for rural women. The mobile can also be usefully tapped in a  commercially viable manner to provide market access and educational, financial  and a host of other services especially to rural populations who are otherwise cut off from such services.

 It has been reported by Steven Musil, that  according to a year-end Internet Trends Report ,

 "13 percent of all Internet traffic is now executed from a mobile device, up from 4 percent just two years ago. In tech-savvy India, mobile Internet traffic has reached 60 percent, surpassing desktop Internet traffic, which has declined to 40 percent." (For more information please see  http://www.kpcb.com/insights/2013-internet-trends)

As mentioned in my earlier posts, given India's young population, mobile VAS is here to stay and represents an opportunity to  bridge the digital divide relatively easily. However with only 6% subscribers using smartphones and a less than 20% internet penetration we have a long way to go.