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UniversalServicePrimer Page1
14Nov2016
PRIMERONUNIVERSALSERVICEThepurposeofthisshortdocumentistogiveabriefintroductiontoUniversalService.ThisisincontextoftheMinistryofTransportandCommunications(MOTC)ofMyanmardevelopinga Universal Service strategy, planning to establish a Universal Service Fund (USF) andimplementingpilotprojectsin2017/2018.WhatisUniversalServicefortelecommunicationsservices?Universal Service is a policy goal that intends to ensure that all people in a country haveaccessandareabletousetelecommunicationsservices,inparticularforpeoplelivinginruraland remote parts of the country and poorer households. This also includes persons withdisabilities. A universal service policy defines aminimum set of telecom services, both forvoice services and broadband Internet, which all people should have access to. This alsomeansthatthesedefinedtelecomservicesareaffordable.Thefollowingdiagramshowsthekey elements of what Universal Service means under the categories of availability,accessibility,affordabilityandability:
Issue Basicmeaning Specification
Availability Allinhabitantshaveserviceavailable
Coverageofinhabitedgeographicterritory • Region/area • Localitysize(e.g.,towns,villages,
settlementswithvaryingnumberofinhabitants)
Accessibility Allinhabitantscanaccesstheservice
• Gender • Race,tribe,religion • Ability/disability
Affordability Allinhabitantscanaffordtopay
• Accessdevice(e.g.,mobilephone) • Costofcalls&services • Minimum“basket”belowacertain
nationallimit(e.g.,3%offamilyincome)
Ability Allinhabitantshavethebasicabilitytousetelecomservices
WithincreasingfocusonthebroadbandInternet,usercapabilitiesbecomeimportant
• Awarenessofservicesandtheirbenefits• Abilitytousecomputers&devices• AbilitytonavigatetheInternet&useICT
services
WhyisaUniversalServicePolicyneeded?Inthepast,typicallythegovernmentownedoperatorhadamonopolyandthegovernmentcoulddirecttheoperatortoservecommerciallyunviableareasofthecountry.Onceamarket
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liberalizes,andallowsothercompetitiveoperators toenter themarket, this isnotpossibleanylonger.Eventhoughcommercialoperatorshavealong-terminterestinservingaallpartsof the country, and competition drives network expansion, there will be areas that thecommercial operators will not serve or at least it will take a long time. Therefore thegovernment needs to develop a Universal Service policy or strategy to ensure that theseareas and population groups will also be served. Universal Service ultimately benefitseconomicandsocialcohesion,integrationandacountry’ssocio-economicgrowth.UniversalServiceinthenewLawThe new Telecommunications Law from 2013 gives the MOTC the option to establish aUniversal Service Fund (USF), and then instruct the Postal and TelecommunicationsDepartment (PTD) to develop programmes and projects for the construction of basictelecommunications infrastructure and to extend telecommunication services in theunderservedareasofthecountry.ThegeneralobjectiveoftheUniversalServicestrategyistoenableeverycitizenofMyanmar,includingthosewholiveinruralandremotepartsofthecountryside,tohavetheopportunityof accessing telecommunications services. The focus will initially be on addressingcommunities,areasortargetserviceswhereaninitialone-time“smart”subsidy issufficientto incentivizeacommercialprovidertocommenceservicesandtocontinueprovidingthemcommerciallyinthelongterm.Universal Service policies and Universal Service Funds are internationally wide-spreadpractices and there are over 90 USFs internationally. So Myanmar can build on thatexperience,buttailoritsownuniversalservicepolicytolocalcircumstancesandneeds.Howisitfinanced?Currentlythemainoperatorshaveanobligationtopayasmallpercentageoftheirrelevantrevenueannually into theUSF. It is important thatall relevant telecomplayersequallyandproportionallyshare in theobligation forUniversalService. Inothercountries, theUSFalsoreceives contributions from the Government, and may also receive funding frominternationalorbilateraldevelopmentagenciesordonors.Further,someUSF’salsoreceivepartsofspectrumauctionproceeds.WhattypeofprogramsandprojectsgetfinancedbytheUSF?Typically, themajorityof fundsarefocussedonclosingthetelecomservicegaps–meaningthe funds get spendon telecom infrastructure network expansion into areaswhich donothave service at all or inadequate service. With the emergence of the Internet, it is alsoimportanttobuildcapacitytouseandbenefitfrombroadbandInternetservices.ManyUSFstherefore finance school connectivity programs, and other capacity building programs.SometimesUSFprogramsincludeconnectivitytargetsforruralinstitutionssuchashospitals.A small proportion gets also spend on helping people with disabilities to access telecomservices,aswellaslocalcontentdevelopmentaimedtobeusefulforruralpeople.Thereareafewthingsthatareimportantwiththelatterprograms:
• Schoolsor institutionsneedtobemadeready forbroadband Internetconnectivity(e.g.,power,capacity,computers,teachers,ICTcurriculum,etc.).TheUSFcannotdoallofthat,sotheresponsibleMinistriesneedtoplayanimportantroletoo.
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• Programs/projectsneedtobedesignedtobesustainable.
• TheUSFhasaveryspecificfocusandeveryprojectneedstobewelljustified.Howdoesitworkandwhoimplementstheprojects?Best practice of USFs is that the money gets distributed in a transparent, open and fairmanner. TheUSF also has the duty tomaximize the value of their funds. The bestway toaccomplish that is through public competitive tenders and a smart subsidy approach.Competitive tenders allow that the best suited operators with the best proposal gets toimplementacertainproject.But theunservedareasarealsodivided intoseparateregions,allowingseveraloperatorstowinaUSFcontract.Further,theUSFdoesnotprovide100%ofthemoneyneededtocoveranunservedareas,butonlysomuchtoallowanoperatortohaveanormal returnon investment.Sotheoperatormightget50%or70%and investshisownmoney in addition. The operator will own the network and has the obligation to provideservices. Also school connectivity projects, content or disability projects get implementedsimilarly – the best operator or the best organization gets selected through a competitivetendertoimplementtheprogram.What is theprocessof developing theUniversal service strategy, anddesignandimplementthepilotprojects?There is an extensive Terms of Reference for the development of the Universal Servicestrategy,butkeyelementsareshowninthefollowingdiagram:
Whyisthereaconsultation?Success factors for developing and implementing a Universal service strategy include thefollowing:
• Participationandsupportfromkeystakeholders(e.g.,industry,governmentandcivilsociety);and
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• Awell-tailored universal service strategy, that takes into consideration the uniquesituationandcircumstancesofthecountry,theruralareasandtheruralpeople.
Therefore,MOTC and PTD will consult with the above listed stakeholders at every criticaljunction of developing the Universal Service strategy, designing the projects, theirimplementationandthentheirmonitoringandevaluation.SomeinitialquestionsandinputsMOTCisinterestedtoreceiveinputtothedevelopmentoftheUniversalServicestrategy,andherearesomeinitialquestions:
• WhatwillbetheuniquechallengesforUniversalServiceinruralareasinMyanmar?
• Whatwillbeimportantelementsneededforsuccess?
• Howwillitbepossibletoserveregionsthatarestillnotyetatpeace?
• Are there existing projects in the areas of rural connectivity, information andcommunicationstechnology(ICT)capacitybuildingandsimilar initiatives,thathaveusefulexperiencesandlessonsfortheUniversalServicestrategy?
• WhatisneededtoensurethattheUSFiswell-managedandefficientlyrun?WhoisIntelecon?Intelecon Research and Consultancy Limited of Canada has been selected by the MOTCthrough a competitive tender to assistMOTC. Themain objective of this assignment is toprovidesupporttoMOTCforthedesignofMyanmar’sUniversalServicestrategyandforitsimplementationinanumberofpilotareastodemonstrateandacceleratethedevelopmentofruraltelecommunications(voiceandinternet)infrastructureandservicesinlocationsthatareunlikelytoattractsufficientprivateinvestment.TheprojectstartedinSeptemberandistolastfor3years.Inteleconhasateamofeightexpertsonthisassignmentandhasworkedforthepast17yearsinruraltelecommunicationsanduniversalservice,andhasassistedover20 developing countries to develop Universal Service policies and assist in program andprojectimplementation,andmonitoringandevaluation.Contact:[email protected]@inteleconresearch.com