1 monday 14 march 2011 windhoek, namibia leona mentz itu expert validation workshop session 4.2:...
TRANSCRIPT
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Monday 14 March 2011Monday 14 March 2011 Windhoek, NamibiaWindhoek, Namibia
Leona MentzLeona MentzITU ExpertITU Expert
Validation WorkshopValidation Workshop
Session 4.2: Presentation of the ToolkitSession 4.2: Presentation of the Toolkit
Introduction SADC nearing 50% mobile voice penetration rates
BUT Most rural & high cost areas remain under served,
Internet and broadband not addressed significantly
The Toolkit discusses: Understanding & Setting up Universal Service Funds Alternative Funding for Projects Programme and Project Design Monitoring & Evaluation Regional Harmonization
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“How to” - Guide
Understanding USAFs Why set up a Fund?
only one of a number of methods of financing depends on the project and the country context depends on the definition of universal service & access
Important to implement SADC Ministerial Decisions, and critical to ensure ongoing relevance Understanding and Analysis of Market is required What should be achieved (definitions)? Where and who are eligible (services, convergence)?
Important considerations from an implementation perspective: What programmes and projects are to be pursued? How is the money disbursed?
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Understanding USAFs
Successful Funds embrace the following key principles:
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•OBA •Good Governance
•Alignment with Regulatory & Policy framework
•Technology neutral
•Market orientation, sustainability & entrepreneurship
•Decentralized bottom up planning & project definition
•Innovation & localization of projects & processes
•Total Cost of Ownership approach
Setting up a USAF Best established in a liberalized market:
Clear institutional framework for the Fund Clear, pro-competitive licensing regime Fair interconnection regime A framework for infrastructure sharing and facility leasing; Effective and efficient spectrum management regime; and Harmonization with regional and global approaches and
standards
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US/UA Guidelines and other CRASA Guidelines deal with this extensively
Fund Management The Ministry A division of the regulator A separate agency An independent third party
Fund Must have (at a minimum):
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Own Bank Account
Fund Management
Accountability: Transparency & Trust Efficiency
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USAF Funding Variety of sources:
Government general budget, Levy imposed on industry, as a percentage of annual revenue Regulatory sources such as the proceeds of license competitions,
frequency spectrum auctions and fees. Once-only contributions from government Consumers
Level of funding:
Range from 0.02% to 6%
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USAF Funding
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SADC mostly Levies on operators could be coupled with
•Approach has been primarily market driven
•Best Approach to determine level of contribution: - Consultative process - Put maximum/range in legislation not actual % - Review levies periodically
Financing of Projects: Utilization of Funds (Challenges)
1998-2006, only 26 percent of USAF funds collected globally had been redistributed to the ICT sector for use on universal access projects
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Slow Funding:
• Fund is located with the regulator (not prioritised)•Speed of the political process, governments fail to pass enabling legislation, or hold back approvals for funds to be spent•Significant time needed to design, evaluate and assess and implement projects•Projects often considered ‘public investments’ & subject to lengthy approval processes•Disbursements may be subject to additional constraints from third party organizations such as donors
Financing of Projects: Utilization of Funds (Opportunities)
Best practice: Legal framework encourage efficiency & transparency &
enable speedy Fund disbursement Fund should be given sufficient autonomy to disburse funds A clear Delegation of Authority Framework should exist
across the organization Fund should have clear continuous and ex post reporting
requirements Funds should have a maximum amount that can be rolled
over from one year to another without eliciting a review of the USAF contributions
Only collect money when structure in place to disburse
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Designing Programmes & Developing Projects
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Understand the Status Quo:• Current policy and regulatory tools to meet defined targets and objectives;• Short and medium term policy changes impact the
ICT environment• Current infrastructure and infrastructure
requirements to meet the defined targets;• Infrastructure roadmap of operators using all types of
infrastructure and technologies;• Market dynamics and demand analysis• Impact of non-ICT factors such as electricity, roads
and access
Designing Projects
Well Designed projects : Targeted Measurable Sustainable
Successful Projects: Commercially successful (i.e. successful from a
market perspective) and Successful from a developmental perspective.
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Focus on demand and needs as well as on
supply and socio-economic impact.
Types of Projects Infrastructure Projects:
the network should be open and provide universal coverage in the area concerned.
the amount of the compensation for rolling out the network cannot go beyond what is necessary to cover the additional costs to deploy the network in non-profitable areas.
Last Mile Access: Infrastructure sharing
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Funder(Private, public,
PPP etc.)
Funding(Subsidies
grants, loans etc.)
Types of Projects:School & Library Connectivity Projects
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Funding Schools DIRECTLY Funding Schools INDIRECTLY
-Well measured-Focused on areas-Focused on communities
-E-rate-Infrastructure Sharing-License obligation
Types of Projects:Community Access Projects
Cyber cafes, telecentres & information access points
Sustainable Project is Demand Driven
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Funder (Private, public,
PPP etc.)
Funding(Subsidies
grants, loans etc.)
Types of ProjectsContent and Applications Projects
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Funder (Private, public,
PPP etc.)
Funding(Subsidies
grants, loans etc.)
ICT sector strategies focus more on broadband uptake
Becomes critical to focus on culturally and linguistically sensitive information
Type of Projects:Pilot Projects
Objectives Document for a pilot project Objectives – what is the thesis being tested Project Team – who from the Fund and its
partners is involved in the pilot? What are the roles and responsibilities?
Sample and Sample size – what is the location/population/technology/etc being tested and why?
Timeframe – provide a start and end date Budget – what is the budget? Who is
paying for what portions (if a partnership) Monitoring and Evaluation Overlapping Projects
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Funder (Private,
USF, Other etc.)
Funding(Subsidies
grants, loans etc.)
Calculating Cost of Universal Service and Access
Cost analysis will require: Market data which is below national level ICT access levels – which is more micro that national
penetration levels Geographical information on the project area Population centre’s and population
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Two of the more user friendly cost models:• World Bank’s ICT voice Model•Public Access Broadband Model
Calculating Costs: Recent Modeling Trends
Most common approaches to arrive at cost: Use of cost information to approximate the
maximum subsidy and Use of benchmarks derived from available local,
regional and international information
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Process Issues: Eligibility for Funding Eligible Bidders
Cannot distort the market
Eligible Areas competitive market interest
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Process Issues: Eligibility for Funding
State owned entities:
No fundamental problem with government owned companies being awarded projects if the process followed has been transparent and fair
New Entrants & Small Players:
May be inadvertently excluded due to lack of experience i.e. requirement for 5 years experience in bid…
Non-licenced Companies:
Open to debate….
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Process Issues: Awarding Subsidies
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Process Issues: Bidding Documents
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Monitoring & Evaluation Monitoring & Evaluation defined Benefits of Monitoring & Evaluation Link between Monitoring and Project Design Examples such as World Bank 10 step Monitoring &
Evaluation process Design Mistakes established through M & E
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Regional Harmonization
Role of CRASA: promoting the harmonization of universal service provide capacity building on Fund management compile annual statistics and indicators to assist
the 14 members to measure the success or otherwise of the Funds
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Conclusion
Intended to be a practical guide Highlight important areas to consider
from Fund establishment to Fund disbursement
Provide case studies and examples as a reference
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Thank You!Leona Mentz
Director: Policy and RegulationPygma Consulting
Tel: +2711 783 1210www.pygmaconsulting.com
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