Universal Service. Agenda Key word Legislation Objectives & targeted areas NTRA role Current status Analysis Methodology of implementation Recommendations

Universal Universal ServiceService

Agenda

Key word

Legislation

Objectives & targeted areas

NTRA role

Current status

Analysis

Methodology of implementation

Recommendations

Key words

TeledensityThe number of total working telephones per hundred persons in the population.

TeleaccessabilityThe number of residential lines per 100 households.

Universal AccessProviding convenient and affordable access to communications (Voice & Data) through public facilities ( Pay phones , telecentres)

Key words (contd.)

Universal ServiceLong-term objective of making communications facilities available to every member of the society.

Universal Service Fund ( USF)A public fund established to support communications development goals .

Legislation Law No. 10/ 2003

Article 5 NTRA may take all actions required to set out criteria and regulations for non economic telecommunications services that should be provided for deprived area

Article 9 NTRA’s fiscal year shall maintain a bank account to deposit its fund. NTRA’s annual budget surplus shall be carried forward to the telecommunication universal service fund

Legislation (contd.)

Article 25

Consideration of universal service requirements

Article 26

If the cabinet establishes a price for one of these services that is less its approved economic cost. The service provider/operator shall be compensated for the difference from the universal service fund. In the case where the fund is in deficit. It shall be supported by the state based on proposal of the concerned Minister in consultation with the minister of finance.

Objectives

Equal access for rural users to quality telecommunications services that are comparable in price and scope.

Promote national political, economic and cultural cohesion.

To encourage more balanced distribution of the population.

Targeted areas

Expansion of services to remote or high cost areas and low income subscriber groups, where it is currently uneconomic to provide .

Expansion of new access services, rather than support of existing services.

Priority on public access services, rather than private household access.

Directory enquiries

Emergency, social schemes

NTRA role

Designing universal access policies, regulations .Create and manage USF.Adopting technologically neutral licensing practices.Adopting a framework of interconnection rates linked to costs.Reducing regulatory burdens to lower the costs of providing services to end users.

Current status

Geographic informationAround one million square km. of these, only around 55 thousands square km (i.e. 5.5%) are populated.

27 Governorates.

200 Centers

4522 Villages.

Current status (contd.)

Population

The Egyptian population was estimated at approximately 68.3 million.(1/7/2003 ).

Population Growth Rate: 2.063%

Avg. No. of Families: 14.5 Millions.


Unused2,600,00023.35%

Residential7,690,35569.06%

Busniess715,7356.43%

Governmental129,1721.16%

Governmental Busniess Residential Unused

Fixed LinesTotal # of available lines 11.2 Millions.Total # of working lines 8.6 Millions.No. of Exchange 1500Waiting List 106,000 subscribers.


Nile13,72528.70%

Menatel29,89162.50%

Telecom Egypt4,2088.80%

Telecom Egypt Menatel Nile

Payphone Service Mobile Service

Total # of Cabinets 47,824 Total # of Subscribers 5,500000

Vodafone2,600,00047.27%

Mobinil2,900,00052.73%

Mobinil Vodafone

Current Teledensity & Teleaccessability Urban Governorates

23.5

2

12.3

9

82.9

4

58.2

1

26.2

6

21.5

4

19.2

3 27.0

3

90.2

5

65.4

7

97.6

7

78.3

5

0

20

40

60

80

100

120

Alexandria Cairo Suez Port Said Urban Avg. Egypt Avg.

Teledenisty Teleaccessability

Current Teledensity & Teleaccessability Delta Governorates

0

10

20

30

40

50

60

70


Current Teledensity & Teleaccessability

Upper Egypt Governorates

6.09

6.68

5.01

11.2

110

.44

9.70

12.3

9

26.1

928

.74

21.5

5

48.2

0

44.8

7

41.7

2

58.2

1

5.51

17.7

8

5.39

4.69

23.6

9

23.2

0

20.1

6

68.9

5

0

10

20

30

40

50

60

70

80

Giza Beni Suef Fayoum Minya Assout Sohag Qena Luxor Aswan UpperAvg.

EgyptAvg.


Current Teledensity & Teleaccessability Frontier Governorates

25.6

1

17.4

2

12.3

9

61.6

664

.42

58.2

1

16.1

619

.33

14.2

6

11.7

3

80.5

6

46.2

9 50.4

6

83.1

4

0

10

20

30

40

50

60

70

80

90

Red Sea Wadi El Gedid Matrouh North Sinai South Sinai Frontier Avg. Egypt Avg.


Analysis

Current Status

Benchmarking IndicatorsFinancialTechnical

Other

Methodology of Implementation

Phase OneUSO

Phase TwoUSF

Benchmarking AnalysisUniversality in Selected Developing and Transitional Economies

Country Universal Access policy Operator Obligations

CubaAccess to all villages and to communities of more than 500 inhabitants.

License conditions stipulate by the end of the first 8-year program all villages of more than 500 inhabitants must have access.

IranTelephone facilities to all villages of more than 100 people.

Expansion, service quality, interconnection and service to the elderly as part of license conditions.

KyrgyzstanA phone booth in every town ; a phone in every home.

Expansion, service quality and interconnection contracted with the government.

Mozambique

A public telephone within distance of less than 5 km. At least one public telephone in each of the 144 district centers.

Expansion, service quality and interconnection contracted with the government.

Pakistan A phone in every village. No obligations.

Togo

A telephone within a 5 km radius by 2010; a telephone in every administrative and economic center of importance

Contract with the state to determine the objectives for development and plurality of service.

Indicators Analysis

Market Efficiency Gap.

- The difference between the current service penetration and the achievable level of penetration in the liberalized market.- Can be minimized through a solid sector reform policy & USO.

Access Gap

- The difference between population without service and that with service- even under efficient market condition.- A portion of the population may simply not be able to afford market price. - Some cases can be solved with US Fund.

Financial Analysis

Basic revenue considerations:

The thumb rule that an average of about 2.5% of per capita income is spent on telecommunications worldwide.

Where the costs of providing telecommunications access is greater than 2.5% of local incomes, external subsidies may be required to promote UA.

Funding mechanisms, such as a universal access fund, can be designed with this rule of thumb in mind.

Local residents will generally be willing and able to pay about 2.5% of their incomes on telecommunications services, and the fund may be required to subsidize the rest of the costs

Technical Analysis

Usage of alternative solutions and technologies ONU (Optical Node Unit)

Pair Gain System ( Multiplexed on twisted pair )

WLL ( Wireless Local Loop) “ cannot obtain ADSL on the same line)

Satellite-Based Tech. ( Sofisat) 9k lines (22/8/2003 100k )

CDMA 2000 WLL (800/900/1900/200-2700MHz band 1.77MHz & Mobility) 100k + 100k planned

S-CDMA WLL ( 2100-2700,3500 MHz band 3.5MHz)

Point to Multipoint Radio (PMP) TE + SRT

VoiP

Tariff

Interconnection

Country GDP

Awareness

Urbanization

Literacy rate

Human Development Index

Other factors in the analysis

Methodology of Implementation.

Methodology of Implementation.

Methodology of implementation Phase One: USO & Commitments

Coverage &Roll out

USO

No

Yes

Satisfy NTRA ’s

NEONEO : Network Expansion Obligations

Define obligations

Current Teledensity

Egypt Governorates

0

5

10

15

20

25

30


Tel

eden

isty

0

5

10

15

20

25

30


Tel

eden

isty

Teledensity =15 Egypt Governorates

263,

887

126,

175

133,

197

193,

350

212,

747

259,

945

150,

197

148,

828

438,

141

417,

543

110,

679

109,

065

118,

985

38,8

18

36,8

35

442,

446

473,

041

202,

115

290,

675

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000


Total required lines = 3,768,910 Lines

Lin

es


0

5

10

15

20

25

30


Tel

eden

isty


263,

887

126,

175

133,

197

193,

350

212,

747

259,

945

150,

197

215,

037

102,

818

113,

922 21

8,91

0

136,

591

129,

194

149,

597

442,

446

473,

041

202,

115

290,

675

79,3

06

62,0

8839

,638

30,7

30

0

100,000

200,000

300,000

400,000

500,000

600,000

Dakahel

ya

shar

keya

kafr

El Sheik

h

Men

ofeya

Behaira

Beni S

uef

Fayoum

Min

ya

Assout

Sohag

Qen

a


Total required lines = 1,277,831 Lines

Lin

es


Methodology of implementation Phase One (Contd.)

NTRA imposes mandatory service obligations on existing operators , as well as reasonable roll-out plans on newly licensed or newly privatized operators.

Telecom Egypt as an Incumbent operator is committed to introduce the basic telephone services all over the country.

Mobile operators are also committed with certain coverage plan.

Methodology of implementation Phase Two USF & Tender

0

200

400

600

800

1000

1200

1400

1600

1800

2000

A1

A2

A3

A4

A5

A6

A7

A8

A10

A11

A12

A13

A14

A15

A16

A17

A18

A19

A20

A21

A22

A23

A24

A25

A26

A27 … … … … … … … …

A54

22

Population

Villages

Methodology of implementation Phase Two (Contd.)

Location IdentificationFor each location,

Two measures of net present value (NPV) are calculated: private and social.

Projects that have a positive private NPV are excluded from the list.

Projects with a positive private NPV are those capable of being financed solely from project revenues, without a government subsidy.

NTRA then ranks the remaining projects (those with a negative private NPV) based on the relationship between social and private NPV. This formulation aims to maximize the social returns.

A list of projects that are eligible for subsidies is then developed by NTRA. The projects are ranked based on the financial evaluation.


Competitive Bidding Process

Once NTRA selects projects eligible for subsidy, NTRA prepares tender documents for a competitive bidding process. Tender documents for each project include the following information:

The localities to be served by the project;The minimum quality of service to be provided;The applicable tariff regime (see further discussion above);The time period allowed for the installation of the public phones;The maximum subsidy available for the project;Available spectrum frequency bands Any other conditions.


Selection of Successful Bidders:

For each project, the bidder that proposes the lowest subsidy is declared the winner. In some cases, no (zero) subsidy was required by the successful bidder.

Licenses:

The winning bidders must apply for a public telephone license. The Licenses are non-exclusive. The license includes the following information:

Name and details of the holder of the concession (the “concessionaire”);Type of service to be offered;Duration of the concession;Geographic zone covered by the concessionTechnical specifications of the infrastructure to be installed;Deadlines for commencement and termination of installation;Technical specifications of radio stations, if any;Amount of subsidy awarded, if anyOther conditions.


Implementation:

Concessionaires must generally install the required public telephones within limited time. These public telephones must be capable of sending and receiving calls from other subscribers, including local and long distance calls. Once the infrastructure has been installed and verified by NTRA, the concessionaire receives the subsidy it is eligible for.


Features of a Good Universality FundIndependent administration : not related to telecommunications operatorsTransparent financingMarket-neutral :does not favor incumbent operators or new entrantsFunding targeted to specific beneficiaries (e.g. high cost regions, un-served rural areas, low income populations, educational & health sectors)Subsidies should not be allowed.Competitive bidding process for implementation of universality projects: i.e. lowest bidder should be awarded subsidy and right to build and operate networks to expand service

Thank YouThank You

Documents

Universal Service. Agenda Key word Legislation Objectives & targeted areas NTRA role Current status Analysis Methodology of implementation Recommendations