Broadband for Sustainable Development

Sustainable development demands that economic growth is inclusive and balanced in terms of trade offs between short term gains and long term consequences.

Broadband Commission's new report,  “Transformational solutions for 2015 and Beyond"  explores the importance of broadband for sustainable growth. It states that,

" while national broadband plans increasingly recognize broadband’s role in socio-economic development, much more needs to be done to support this ‘invisible technology’ transforming our world. A regulatory environment that encourages widely accessible and affordable broadband deployment is the only way to realize its potential to advance sustainable development – for example through proactive policy on spectrum and the protection of inventions.

As far as comprehensiveness of National Broadband Plans goes, the figure below is telling

Inclusion of Socio-Economic Elements in National Broadband Plans 2013

Encouragingly more and more countries include education, employment and health as important elements in national broadband plans. However, the lack of emphasis on universalizing access is evident from the last 4-5 bars. Broadband cannot work its magic unless it is universally accessible, relevant and affordable.

The report makes 10 recommendations to fully leverage the potential of broadband in this regard:

1. Make ICT and high speed broadband universally available at affordable cost for all.

2. Ensure that ICT and broadband are embedded in all of the universal goals and national targets to be defined as part of the Post-2015 global development agenda to fully capture transformative, sustainable solutions.

3. Deploy national development policies and plans to actively drive cross-sector integration of economic and social outcomes deliverable and scalable through ICT and broadband.

4. Create a streamlined and enabling regulatory environment for the broadband era that accelerates removal of barriers to market entry for broadband ICT uptake.

5. Provide consumer incentives and harness government procurement to drive demand and stimulate private sector innovation and investment.

6. Twin broadband innovation and investment with sustainable multi-stakeholder business models to capitalize on the transformative potential of universal ICT

7. Drive the game-changing potential of mobile broadband through the optimized use of radioelectrical frequency spectrum for universal ICT for development penetration

8. Promote the utilization of global standards to enable the harmonization and interoperability of ICT and broadband-enabled services and applications, putting special emphasis on affordability and accessibility.

9. Establish a comprehensive monitoring framework for broadband deployment and robust accountability mechanisms to track development progress via industry-wide broadband ICT metrics and indicators.

10. Develop appropriate solutions to maximize resource mobilization, innovation and investment in broadband for both developed and developing countries.

The report also analyse broadband's actual and potential role in achieving sustainable development goals such as ending poverty, hunger and gender inequality and provides best practices from across the globe.  

Please also see previous posts on National Broadband Plans and Broadband Ecosystemhttp://ictsforall.blogspot.in/search/label/Broadband%20Ecosystem

Reactions to USOF India's Device Subsidy Schemes & the Confusion over Universal Service Funding

I had written earlier about USOF's intended Mobile handset Scheme. While phones for voice alone may be unavailable to relatively few in rural areas, they may not be owned by women, aged and disabled. If we are aiming at smart phones for internet/broadband access, in my view, affordability of devices is a necessary but not sufficient condition for universalizing broadband access especially for rural India which has negligible broadband penetration. On the supply side, we also need good quality and affordable  connectivity (absent even in urban areas at present) and on the demand side we need locally relevant content in vernacular languages as well universal accessibility to cater to needs of disabled, illiterate and aged populations. My views on this subject may also be seen in previous posts on Broadband Ecosystem.

It has now been reported that 

"The Telecom Commission, the highest decision-making body in Department of Telecom (DoT), recently approved a proposal to give free mobiles to families in villages and tablet PCs to students in government schools that could cost the exchequer nearly Rs 10,000 crore.

The scheme is expected to benefit 2.5 crore individuals in rural households while the free tablet programme would cover 90 lakh students in 11th and 12th classes.It is to be jointly funded by the Department of Telecom and Universal Services Obligations Fund (USOF) – a fund to facilitate telecom services in rural areas. The project is proposed to be implemented through state-run BSNL which will float tenders for sourcing of mobile phones and tablets.The tablets will cost around Rs 4,972.5 crore, of which the USOF will fund 60 per cent and the remaining amount will be provided by DoT.Similarly, the mobile phone scheme, meant for mainly MGNREGA workers, is estimated to cost the government Rs 4,850 crore.The mobile phones and tablet PCs are proposed to come with a warranty of three years. Both the schemes are expected to start after March 2014. ..The tablet PC will be distributed in three phases where is first phase 15 lakh students will be covered, 35 lakh in second phase and 40 lakh in third phase. Under the proposed scheme, students will get tablets for duration of their studies at the school they are enrolled with.

The mobile phone scheme is proposed to cover 25 lakh beneficiaries in first year, 50 lakh in second, 75 lakh in third and 1 crore in fourth year. The mobile phone scheme, meant for mainly MGNREGA workers is likely to be completed over period of six years."

A critique of this initiative may be seen in a newspaper editorial titled "Honey Pot" It has criticized the Fund for being bureaucratic and tight fisted in the past but is also very critical of this scheme which is labeled as a populist measure at the cost of operators whose revenues go towards funding the subsidies. The argument is that the Fund should have been wound up to spare the operators the mandatory contributions to USOF so that they could provide rural services.

It is a fact that much of rural penetration has taken place outside the realm of USOF. I would be a bit wary of device subsidies unless they are restricted to the really deserving (socially/economically)and clearly under served such as rural women, aged and disabled. I would also fault the choice of the incumbent by nomination for almost every recent USOF endeavour. This goes against the letter and spirit of USOF Rules besides being anti competitive. (Read post on Competition for my views on the subject).

However, it is wrong to assume that if the USOF were scrapped operators would have with this money. It is in fact a part of their license fees and hence would be recovered any way. Neither would  they would cater to non viable market segments on their own even if no license fees (or universal levy) was recovered from them. US Funds are supposed to be a competitively neutral, transparent, targeted and hopefully minimal way of providing incentives to bridge the actual access gap. The concept has proven to be more effective than at least rural  roll out obligations in India. The problem arises when the Fund is not used in this ideal manner. This can be traced back to regulatory frameworks and underlying institutions but it is wrong to imagine  that markets can achieve universal service on their own.

South Africa's Plans for a National Broadband Plan

It has been reported that at a recent industry event with the theme of "Broadband – A Catalyst for Sustainable Economic Development and Promoting Digital Inclusion" the need for better policies, "collaboration between stakeholders," vertical separation and demand side measures like "ICT Skills Development, digital literacy programs for students and adults, IT resources and training"  and the" need to move to impact and creating an ecosystem … and mesh together supply side and demand,” have been emphasized by participants from government and industry.

This echoes much of what has been agreed internationally as posted earlier under National Broadband Plans and Broadband Networks. 

An earlier report about the Government's plans for broadband expansion and reactions of the industry may be see here.

http://www.zdnet.com/can-south-africas-grand-broadband-plan-succeed-7000007165/

An extract as below indicates that the 3 options being considered are similar to those which may have been considered by many a nation and certainly same as those considered in India. (Please see post titled "Broadband Networks through the Infrastructure Sharing Route"

"The government currently owns a number of assets in the telecoms market – including long-distance infrastructure provider Broadband Infraco and a 39.8-percent share in South Africa's fixed-line incumbent Telkom. The state now wants to work with the private sector to build a wholesale national broadband network along open-access principles. With around 3.5 million PC broadband connections and 10 million smartphones between South Africa's population of more than 51 million, the country is far from achieving its goal of universal access by 2020.

Though there are many broadband expansion projects underway, they are fragmented, and a comprehensive, centrally planned strategy is essential to boosting broadband in South Africa .., three funding options for the national network [are]:

• Financing a state-owned enterprise.
• Incentives for operators to offer services in economically unattractive rural areas.
• Equity and incentives provided by government could be ring-fenced in a special purpose vehicle."

The public consultation paper on National Broadband Policy suggests that for OFC backbone the incumbent (Telekom) will play the lead role in providing whole sale access even though service competition will be encouraged in service provision to customers . The document lays a welcome emphasis  on developing the broadband ecosystem.

ICTs for Indian farmers

A 2009 Deloitte Assocham Report on mobile VAS as a means of inclusion speaks about the sheer enormity of the problem of reaching out to a billion plus population to ensure provision of "basic hygiene and sanitation, clean drinking water, basic healthcare, primary education to adequate housing, roads, higher education, banking facilities, disease control, and disease management. Each problem is exacerbated by its sheer magnitude.  (Refer Table 1)."

Thus, India is a country where rural areas in particular are financially excluded. The RBI has officially directed banks to explore ICTs based solutions through the business correspondent model whereby a village can be covered even in the absence of a brick and mortar branch.

Recently, the Mint carried an article about RuPay a card payment network like Visa and masterCard that is revolutionizing how Indian farmers handle money. Through RuPay Kisan (farmer) cards farmers can make electronic payments at lower transaction costs. It is a domestic system launched in 2012 by the National Payment Corporation of India and many banks (national, private, cooperative and rural) provide vards affiliated to it for population in small towns and villages. While RuPay cards are usable at all ATMs, only 25-30% of the point of sale(PoS) machines are compatible and this is being tacked. Nevertheless, such facilities are empowering farmers through ICT enabled financial inclusion.

The Indian USOF  had also initiated a scheme for ICT enabled banking services in rural India on pilot basis in collaboration with BSNL as an adjunct to the Rural Wire Line Scheme. It dis not succeed due to various stakeholder coordination issues but USOF should in my view continue to strive to support such services. 

Responsible Policy Making Needs Sound Regulation

I was impressed by an article published in the Times of India today- "Muddling through Food Security" by Ashok Gulati, Chairman of Commission for Agricultural costs and Prices. Writing about the recently passed food security bill, this economist has succinctly explained the pitfalls of the food subsidy programme proposed to cost Rs 1,30,000 crore at current prices. He has stated that it will probably not achieve its objective of better nutrition, but will drive up our fiscal deficit while diverting precious funds from other critical areas such as sanitation, drinking water and female education needed to address malnutrition and health in our country.  Commenting that, "the art of policy making lies in achieving desired ends with minimal costs" he has pointed out that instruments like conditional cash transfers can achieve desired ends much more efficiently without distorting agri-markets.

I draw attention to this contentious issue as an example of India's desperate need to mandate a full fledged, transparent economic analysis of state funded schemes. Tax payers have a right to know that we are achieving short term growth and equity in efficient ways that will not cause long term harm to our economy. We do have a lot of debate in the media and in the parliament, but it should be based on a structured analysis of the proposed regulation backed by hard facts and figures that policy makers own up responsibility for. Decision makers may not then find it so easy to ignore rationality in favour of other considerations. Placing hard facts and figures in the public domain would empower citizens.

My blog concerns ICTs penetration. This issue is relevant for that as well. In a developing country like India, we have less than satisfactory institutional capabilities, leading at times to less than efficient policy making even when we have sound inputs from within and outside policy making bodies.Regulation that mandates transparent economic analysis and placement of the full justification for policy measures in the public domain can in my view counter regulatory capture and rent seeking.

Take the example of subsidising Universal service.  I have written earlier about USOF India's proposed scheme to subsidise mobile devices.  If regulation mandated a transparent socio-economic cost benefit analysis of this measure necessitating justification that this is the only/best way of increasing mobile penetration among the rural poor, it would help policy makers make better decisions. 

Another  area where much improvement is required in Indian policy making, is that economic analysis of a policy has to capture a much larger canvas as.  has been painted for us by Mr Gulati in his article. We have to  examine the impact of policy making on the sector and economy as a whole rather than conveniently bury our heads in the sand. This reminds me of my concerns about state funded broadband roll outs. Previous posts can be seen under the labels Competition , National Broadband Plans and Broadband Networks.

Markets Miracles-Internet.org

Under the label  Market Efficiency Gap, I have written earlier about How Markets Address Access Gaps. This post was about an Indian telecom operator creating awareness about mobile internet in rural markets.

Continuing with this topic, another example of service providers going out of their way to develop markets is seen in a new initiative called Internet.org to increase access to the internet "aimed at drastically cutting the cost of delivering basic Internet services on mobile phones, particularly in developing countries. "

This involves a partnership between big service providers such as  Facebook, Samsung, Nokia, Qualcomm and Ericsson etc. 

"The companies intend to accomplish their goal in part by simplifying phone applications so they run more efficiently and by improving the components of phones and networks so that they transmit more data while using less battery power."

This makes business sense when we understand the need to find new markets as the developed world nears 50% plus penetration levels ad to tap into potential markets in developing countries. 

Thus, it is reported that,

"Poorer countries in Asia, Africa and Latin America present the biggest opportunity to reach new customers — if companies can figure out how to get people there online at low cost.....The immediate goals of the new coalition are to cut the cost of providing mobile Internet services to 1 percent of its current level within five to 10 years by improving the efficiency of Internet networks and mobile phone software. The group also hopes to develop new business models that would allow phone companies to provide simple services like e-mail, search and social networks for little or no charge."

ICTs for Rural Healthcare

I had written recently about USA's refurbished rural healthcare programme and that Indian USOF could study the same for guidance on do's and dont's.

A very inspiring example of use of ICTs for rural healthcare, in this case maternity and neo natal healthcare is reported in an article "ASHA 2.0: Barmer block’s healing touch on tablets."

ASHA (Accredited Social Health Activist) workers in rural Rajasthan's Barmer district have been equipped with tablets which are helping them and the beneficiaries of the Governments's health benefits programme to better track maternal health while also generating interest in ICTs in rural women. Rajasthan is one of the  very conservative state of India.

My own experience with the Sanchar Shakti project was that rural women take  to ICTs  very rapidly with great benefits. One of the projects is being implemented in Ajmer district of Rajasthan  where rural women are keen as any other to improve their and their daughters' lot through information and ICT enabled  services. A full description of the implementation experience so far may be read at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2302471.

India's Massisve Potential for Online Services

A report from comScore titled,  2013 India Digital Future in Focus report provides an insight into India's growth in the online space with the following highlights:

• At 73.9 million home and work internet users, the Indian online population currently ranks as the 3rd largest in the world after China and the U.S.
• With 75 percent of its internet users under the age of 35, India has the youngest skewing online population among BRIC countries.
• Across all age and gender groups, Women between the ages of 35-44 are the heaviest internet users in the Indian market.
• The Indian blogging audience grew 48 percent in the past year to 36 million visitors, while 26 percent of category traffic comes from mobile phones and tablets.
• 54 million internet users in India watched online videos on their computer, representing a 27-percent increase over the past year.

A reading of the whitepaper reveals the huge potential for online services and content in India. This includes e-commerce, financial services, real estate, travel, social networking, entertainment and news. This can be expected from a young country with growing literacy rates and generally poor infrastructure. Broadband/internet are the bridge across infrastructure/facilities gaps which enables  apparitions to be fulfilled and promotes empowerment. Interestingly blogging is growing rapidly in India and I guess new users like me get added every day!

On the technology/device side it becomes clear that mobile devices and services are what is enabling the rapid increase in consumption of online services.

Previous posts on Broadband Ecosystem and Mobile VAS, Mobile Education etc. may also be of interest.

The Demand Side of Broadband Expansion-Telemedicine

As per the telecom live magazine (August issue) the Department of Telecommunications is collaborating with other ministries/ departments to establish the utility of the NOFN. This includes the Ministry of Health & Family Welfare which has reportedly stated in an inter ministerial meeting held in June 2013 that fibre connectivity and computers are critical for telemedicine applications. There is no doubt about that but a proper and detailed assessment of needs and gaps would be critical for BBNL to usefully boost telemedicine in rural India in a systematic manner.

We could learn something from USA 's experience. It has for the past 15 years run a programe to subsiise connectivity fo rural healthcare. 

As per an article titled, "FCC Rural Health Care Program coming up woefully short" in November 2010 a Government audit  said that the FCC "has not conducted an assessment of the telecommunications needs of rural healthcare providers as it has managed the primary Rural Health Care Program, which limits FCC's ability to determine how well the program has addressed those needs." In addition, government auditors found that the FCC has not developed specific performance goals for the Rural Health Care Program and has developed "ineffective" performance measures." 

However another article, "$400 million FCC fund to bolster rural telemedicine networks," describes the Federal Communications Commission plan to expand on the above-mentioned programme to " make up to $400 million available to healthcare providers in order to create and expand telemedicine networks nationwide, linking urban medical centers to rural clinics while providing greater access to medical specialists and instant access to electronic health records. "

It is said that, 

"According to the FCC, the Healthcare Connect Fund could cut the cost of broadband healthcare networks in half, through group purchases by consortia and other efficiencies. The fund will provide a 65 percent discount on broadband services, equipment and connections to research and education networks, and healthcare provider-constructed and owned facilities (if shown to be the most cost-effective connectivity option), while requiring a 35 percent HCP contribution.To be eligible for the funding, applicants must be public or not-for-profit hospitals, rural health clinics, community health centers, health centers serving migrants, community mental health centers, local health departments or agencies, post-secondary educational institutions/teaching hospitals/medical schools, or a consortia of the above."

USOF India needs to learn from successes and pitfalls of such initiatives while coming out with specific programmes to address demand side of the broadband ecosystem.

Achieving Universal Service and Digital Progress in a Connected World.

If readers have ever wondered about the title of my blog. Here is an answer.

The Mint today carries an article about "Indian telcos' 4G Plans get[ting] an unexpected boost." This article highlights the benefits of China Mobile Ltd's plans to "purchase equipment worth more than $7 billion for a network based on a new technology standard, boosting its popularity, and potentially increasing the availability of phones and network equipment based on the standard and lowering their costs."

So far, Indian operators desiring to roll out pan India 4G services have been constrained by high cost of equipment and handsets. They possess 4G TD LTE spectrum. This is different from US and European operators' 4G LTE-FDD services meaning that much of the international manufacturing is based on the FDD spectrum standard. China's interest and patronage will give the former technology's supply and overall eco-system the required critical mass helping reduce prices and increase range and availability of equipment.

I think that the question stands answered. It is a "connected world" as far as universal access to state of art telecom services goes.

Wise Regulation, the Order of the Day

For quite a few days now Indian media is carrying the story about the sand mafia and the actions of an honest civil servant to prevent illegal mining. A though provoking viewpoint  has been presented on this issue in an article titled, "Between rock, sand and a hard place" in the Times of India on August 11, 2013. It states that, "[i]n several areas, Indian rules and regulations make honest business impossible. The only choice is illegal business or no business." The author of this article draws attention to the shortage of sand for a booming construction sector on account of " licensing and environmental bottlenecks." The latter creates an artificial scarcity that allows the mafia to step in and profit.I will leave readers to judge the merits of these arguments for themselves. 

Why am I writing about sand and construction? 

That is because in my view it reflects the same underlying problem that is  hampering economic activity in the country today. In a developing country that  is (let us accept it), still below par as far as institutional and administrative capacities are concerned, regulation has to be realistic, practical, simple yet sufficiently detailed in order to be unambiguous, leaving little room for arbitrariness/misinterpretation. It should be forward looking so as to not require too frequent review, but it should be reviewed when need be based on well laid down criteria. Most of all it should keep consumer welfare at its focus. 

Telecom Regulatory Authority of India's Chairperson (TRAI)  has recently commented on the controversial 3G roaming pacts among three large mobile operators in India. According to the Department of Telecommunications, these pacts replicate the characteristics of Mobile Virtual Network Operators' (MVNO) operations, something that is not yet permitted in India. The operators by sharing spectrum and infrastructure were able to provide 3G services to customers even in telecom circles where they had not won spectrum in the 3G auction. 

The TRAI Chief is quoted as having said that, " in a situation where there is no more spectrum available, it ay not be possible to continue with a regime where pacts for intra-circle roaming (ICR) in 3G services are not allowed..............This is a Catch-22 situation. How is it (closing down ICR) a solution?” 

The article on this issue goes on to say that,

According to [Mr] Khullar Indian law treats spectrum as a holy cow for some reason.

“I can understand that you don’t want to cap gains on assigned spectrum which is administratively allocated. But if everyone is buying spectrum on auction, why not permit trade in it? These are issues on which the government should no longer brook any further delay. A decision needs to be taken,” 

Again, I leave it to readers to form opinions. I would just like to highlight that I agree with the TRAI Chief that corrective regulation is the order of the day if consumer welfare and not regulation for regulations sake is our aim.

I also invite readers to go through previous posts on Telecom Regulation and the Market Efficiency Gap to appreciate the importance of effective regulation for growth and equity in telecommunications penetration.

The Huge Potential of Internet in Young India

An interview with Google's Managing Director Rajan Anandan published in the Mint on August 10, 2013 makes it clear how positive they are about the growth of mobile internet/broadband in India. He has been quoted as follows:

"India has the third largest number of Internet users in the world right now, at around 150 million users, and most of the new additions have been mobile users. That’s a huge audience, and what we’re seeing is that the Internet has gone mainstream. Around 50 million people are watching video online, up from 15 million two years ago. Around 37% of all YouTube viewers in India are doing so on a mobile device.

One area that’s of particular interest to us is the small business uptake. SMB (small and medium businesses) ads have been growing in the triple digits, with large adoption. Our role there has been to help build the ecosystem. We’re also seeing some very positive trends with e-commerce. I think that the industry reached its inflection point at the end of 2011. The growth was around 40% in 2011, and in 2012 it was 120%. People became familiar with buying things on the Net...

The audience has also definitely become more sophisticated, and the kinds of offerings available now, prove that.For example, “Local” is growing now; it’s in its early days, and there isn’t enough data in place yet, but if you look at things like Maps, or movie ticketing, or look at a company like online food and restaurant guide Zomato, then you can see that there is a lot of great potential, and I think that by the end of 2014 all the pieces will be in place for this to really grow."

The future is very bright as far as m and e services are concerned. As I have written earlier in my post titled, "M Education & the Demographic Dividend," which may be seen under posts labeled Mobile Education, India is a young country with 54% of the population being under 25.  In fact India is often cited as an example of the demographic dividend whereby the larger relative share of working age population has the potential to progress the economy to higher rates of growth.

In the near future India will be the largest individual contributor to the global demographic transition. A 2011 International Monetary Fund Working Paper found that substantial portion of the growth experienced by India since the 1980s is attributable to the country’s age structure and changing demographics. The U.S. Census Bureau predicts that India will surpass China as the world’s largest country by 2025, with a large proportion of those in the working age category. Over the next two decades the continuing demographic dividend in India could add about two percentage points per annum to India’s per capita GDP growth.[ Extreme actions are needed to take care of future basic minimum living standards including food, water and energy. As per Population Reference Bureau India's population in 2050 is projected to be 1.692 billion people. (Source: http://en.wikipedia.org/wiki/Demographic_dividend)

Thus, educating, employing and mainstreaming all segments of India's youth and working age population is critical for socio-economic progress. I have also mentioned earlier in several posts including those labeled Broadband Ecosystem, that locally relevant content in the local language is the key to growth. Mr Anandan too has drawn attention to the fact that the next 300 million customers in India will not speak English. The spread of local language content will be helped along with "improvements in speech to text and voice controls." He has very rightly pointed out that internet offers more value in small towns which are in fact driving growth. I believe that this is also true of rural India.

In an article titled "Empowering India-Opportunities in Rural Telecommunications" published in the Telenet magazine in January 2012, I had written that,

 "there is tremendous potential in rural markets especially given the background of robust mobile connectivity and the imminent spread of broadband to rural India.  What rural India needs desperately is information, knowledge and urban quality services. This translates into a huge market opportunity for providers of ICT enabled access to information, education, health, financial services, commerce and employment opportunities etc." 

I had also mentioned that,

 "it is amazing how many an urban Indian actually believes that there would necessarily be very low demand for broadband in rural areas. Already there are more internet users in small towns than the top eight metros put together. Interestingly more than 20% users are school children and 10% users belong to lowest socio-economic strata . While only a minority of rural Indians may be able to afford individual access to broadband on account lack of computing devices and power, this does not imply a lack of demand for broadband enabled services. In interactions during the verification of USOF’s wire line broadband scheme, it has clearly emerged that better off rural families across the country do buy computers for the same reasons as urban families do -children’s education, knowledge and entertainment or as an aid to their incomes/businesses. They would relish good broadband connectivity as much as urban Indians do........There is also a healthy demand for public access broadband facilities. This is logical in the face of near absence of local infrastructure and services. Just as an urban Indian searches online when looking for a new or locally unavailable information, service or product, rural Indians too would like to research/access the same online. This is a rural reality even today.  Booking journey tickets online is a simple example. If credit cards are a problem intermediaries (village level entrepreneurs (VLEs)) with credit cards step in to facilitate transactions.  VLEs also facilitate online money transfers, download mobile software etc. Skype is just as useful and popular amongst rural Indians as a means to reach out to relatives in cities/abroad. This demand will only grow as the rural literacy rate rises beyond the current 68.91%  and knowledge and            e-connectivity increasingly become key to empowerment.  The demographic profile of our country means that more than 50%.rural Indians are less than 25 years old. They have the same affinity for the worldwide web as urban youth. I have personally seen rural school girls downloading online games with as enthusiastically as any city-bred child. The frustration with the speed of the connection was palpable!"

More on Broadband Networks & Ecosystems-New Zealand's Efforts

In a post titled "National Broadband Networks:Regulation, Universal Service, Competition & Monopolies," I had stated that while most of these these public/US funded OFC networks are slated to be open access networks, care should be taken to avoid displacing private investment and initiative which may have been forthcoming with the right regulatory environment or incentives. Use of public funds/universal service funds should ideally be restricted to areas where markets have failed and logically the best course is to bid out such network provision to allow a level playing field between private and public operators. This may lead to a more fragmented approach than one integrated network but contractual obligations can ensure seamless connectivity between and non-discriminatory open access to backbone networks owned by various entities.  (see previous blog post) Such a PPP approach rather than publicly/incumbent owned networks may prove to be more competition and growth friendly in the long run even if it entails more effort in the short term. The use of public funding in pockets where no operator will venture or where effective competition is unlikely in spite of effective regulation (akin to European Commissions white or grey areas) is however justifiable. 

The fact of the matter is that in many countries we are now rolling out state supported national broadband networks which often rely on the incumbent. My view on this is we should be careful about the trade off between short term expediency (time, cost and effort saved) and long term imoact by way of competition, innovation and growth. 

I once again reproduce below a quote from the ITU report on the State of Broadband 2012

"Broadband networks and services are more than simple infrastructure – they represent a set of transformative technologies that promise to change the way we communicate, work, play and do business.  It is essential that every country  takes  broadband  policy  into account to shape its future social and economic development and prosperity, emphasizing both the supply and demand sides of the market. Further, it is crucial to adequately evaluate the potential alternatives to be implemented in order to encourage private sector investment. A “one size fits all” policy to broadband roll-out could have negative implications for the ICT market. Finally, a detailed cost-benefit approach should be adopted when evaluating different public policies and regulatory options to promote the growth and development of broadband in different countries around the world."

In this context, in the same post I had placed links to comparisons of Australia's NBN with New Zealand, South Korea and Singapore's national broadband network efforts.

A comparison with USA's efforts can be seen at "NBN vs. the world: The American experience." It is accepted that USA relies on a more hands off approach favouring competition and that Australia is more dependent on its incumbent Telstra. Its interesting to note that NBN's Myers is quoted as saying that

the U.S. market structure has caused a problem of its own “It’s actually resulting in very much a patchwork network across the states.” Different companies deploy different technologies from each other, and even within their own footprint offer different speeds in different areas, he said. “There’s no consistency across the marketplace.”

Another viewpoint of  Rod Tucker, a professor at the University of Melbourne is that, 

“Verizon has rolled out an extensive fibre-to-the-home network in the US,” but hasn’t seen much take up, ..."This is because the Verizon fibre network runs alongside competing HFC and ADSL networks. The lesson that Australia can learn from this is that facilities-based competition can be inefficient."

I donot agree with this conclusion at all and in fact I believe relying on a single technology and single network is not prone to the same fallacious "telecom as a natural monopoly" argument that we encountered in the era of copper line access. It will most probabaly lead to the same regulatory headaches in the future.

A comparison with Korea is available at  "NBN vs the world: The Korean experience." The success  achieved through an emphasis on developing the entire broadband eco-system is evident.

"[Korea] developed e-health, e-learning and e-government services when it began constructing its broadband networks... which allowed the government to pinpoint early on where problems were and commercialise the technology earlier. This allowed citizens to become accustomed to online services such as online banking and e-trade."

Most importantly,

"The Korean government has also put in place a competitive environment to allow as many broadband operators as possible...We’re seeing a very aggressive campaign from their government... promoting and making broadband networks available. One thing that we can learn is that there is a place for government to put into place policies and best practice to ensure that operators are able to make available the services that the customers want" 

The Government in my view should do just that, promote through regulation and policy rather than get involved in actual roll outs.

A detailed description of New Zealands's  Ultra-Fast Broadband (UFB) initiative and the Rural Broadband Initiative (RBI) is available in an article titled, "NBN vs. the world: The New Zealand experience." The article 

Another article "NZ gov seeks submissions on telco regulation" describes the proposed review of New Zealand's Telecommunications Act 2001 which in its first phase will examine will examine "whether the current regulatory framework is adequate for New Zealand’s migration from legacy copper infrastructure to fibre networks and discuss pricing components of the current regulatory framework."

What I liked was the focus on "competition for end-users, how the commercial interests of access providers and seekers can be promoted and how to effectively encourage investment for the long-term benefit of end-users." and " innovation in the telco market and deregulation in instances where there is sufficient competition."

India needs to pay attention as we often review telecom policy from the technology end rather than focus on consumer benefits and work backwards. We also rarely commence our analysis with competition as the desirable end result.

Previous posts on Competition, Broadband Networks and National and National Broadband Plans may also be seen.

Cheap Smartphones & the Broadband Ecosystem

The Economic Times today carries an article about Government panning sub $100 smartphones to boost broadband penetration. As per TRAI, India has about 15 million broadband subscribers and about 143 million access internet through wireless.Clearly with  negligible wire lines in access, last mile connectivity in India will be wireless and mobile devices are therefore critical to broadband access.

It is reported that a telecom official stated that, 

"A fully-functional smartphone is no longer an object of desire but an instrument of empowerment ," the official said. He added that since smartphone affordability remains the biggest hurdle to broadband penetration in India, the world's second largest mobile phone market, the government is exploring ways to encourage the biggest handset makers to produce sub- $100 advanced smartphones on a large scale that will come pre-loaded with the latest entertainment applications and also support mobile banking, telemedicine, education to even farming applications like e-krishi."

One viewpoint is that affordability of smart phones is a key driver of broadband penetration.

 "This, mainly since the average global price of such devices continued to hover around $130 (Rs 7,800), the main reason why barely 5% of the Indian population has till date upgraded to genuine smartphones despite the country's 70 %-plus telecom penetration levels.."

 In my view affordability of devices is a necessary but not sufficient condition for universalizing broadband access especially for rural India which has negligible broadband penetration. On the supply side, we also need good quality and affordable  connectivity (absent even in urban areas at present) and on the demand side we need locally relevant content in vernacular languages as well universal accessibility to cater to needs of disabled, illiterate and aged populations. As readers may recall, I has commented earlier on news about a probability of USOF India subsidizing mobile devices for rural poor. My views on this subject may also be seen in previous posts on Broadband Ecosystem

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.

India's Broadband Initiative-Bharat Broadband Network Ltd

I have mentioned earlier that 2.5 lakh village panchayats (local government centres) are to be connected through the National Optic Fibre Network or the public sector SPV called Bharat Broadband Network Ltd. This roll out would take high speed broadband  to rural India and hopefully revolutionize rural telecommunications.  A rare update on BBNL appeared recently in Business Line. It reported inter alia that 

"A survey – to chart an optimum route [for OFC] - for all 2.5 lakh GPs in the country is underway. The National Information Centre has been roped in to create a digital map, with routes and nodes, using Geographic Information Systems technology. It would be hosted on BBNL Web site for the citizens to review it and provide feedback."

and that,

"Tenders for laying the network had been floated and financial bids were opened on June 7, however unsuccessful bidders have approached court and their bids were opened on June 21. Due to this delay, the tender would be finalised by July 31."

This is often a problem with PSU tenders and not limited to India. Expenditure so far has been Rs 229 crore or USD 38.346 Million.

It is hoped that these teething problems are soon overcome and the roll out is achieved on time. It is also hoped that  the resultant network is effectively regulated to ensure open access and a level playing field between participating Public Sector Units (PSUs) and various private entities involved in the broadband eco-system. Needless to say these supply side initiatives must be accompanied by measures to address other aspects of the rural broadband value chain.

The Broadband Ecosystem

I reproduce below a news item about the release of an ITU report, "Planning for Progress: Why National Broadband Plans Matter."

• Countries with a clearly-defined national vision for broadband roll-out are significantly out-performing those with a more relaxed approach, according to a new report by the International Telecommunications Union.

• The report observes that there were 134  national broadband plans in place around the world by the middle of 2013, all of which aim to increase usage of broadband-enabled services and applications by citizens and businesses.

• Such plans are found to have a big impact on market penetration of fixed and mobile broadband services, with average penetration around 8% higher for both in those countries with a formalised plan.

• Market competition is also believed to play an important role here, with competitive markets averaging 1% higher penetration for fixed broadband and 26% higher for mobile broadband than those markets with a monopoly.

• Dr Hamadoun I. Toure, secretary-general of the ITU, said: “Governments are realising that broadband networks are not just vital to national competitiveness, but to the delivery of education, healthcare, public utilities like energy and water, environmental management, and a whole host of government services. Broadband is the key enabler not just of human interaction, but of the machine-to-machine communications systems that will underpin tomorrow’s world.”

• The study concludes by stating that the full economic and social benefits are most likely to be realised where there is strong partnership between government and industry, and counsels a consultative, participatory approach to policy in conjunction with key stakeholders.

Source: http://www.iptv-news.com/2013/07/national-broadband-plans-crucial-to-success-says-itu/

The report indicates regional differences different policy in  instruments being used to promote broadband

Most importantly the report highlights the need to focus on the entire broadband ecosystem rather than just the supply side. At present relatively few countries focus on the entire gamut of measures needed for true broadband related inclusion.

It  cites the case of Brazil, as a well formulated plan based on widespread consultation which takes into account the infrastructure provision targets, a conducive regulatory environment combining infrastructure sharing and competition, as well as fiscal incentives.

The results as reported are heartening,

The private sector has responded by accelerating the deployment of infrastructure. There has been significant uptake in both fixed and mobile broadband services – fixed broadband is now available in all 5,565 municipalities of the 27 states in Brazil. Since 2009, total fixed broadband subscriptions have doubled from 10 million to 20 million lines in service.  Mobile 3G services now reach 3,376 municipalities in all states, currently covering 89% of the country´s population. Mobile broadband has exploded from 7 million lines in service in 2009 to 70 million today. Mobile 4G services were recently launched in April 2013 in major State capitals, with extensive coverage targets over the next few years.  Twelve thousand community telecentres have now been equipped and provided with broadband Internet access. 

In India apart from the National Optic Fibre Network-A USF supported project, a clear broadband policy articulation is found in the National Telecom policy 2012.  Please see previous posts on National Broadband Networks and Universal Service more information.