1

Bandwidth for All

Judith Mariscal

Mexico City, September 5th

Acorn Redecom Conference 09

What is the need for and viability of building an alternate IP backbone network?

Panel Discussion

3

ICT development

Voice services are now more widely available, yet Internet penetration…

Source: ITU (2009)

0

20

40

60

80

100

120

140

UK

Arge

ntina

Spai

n

Kore

a

Fran

ce

Colo

mbia

Chile

USA

Braz

il

Peru

Mex

ico

Mobile suscribers per 100 inhab. (2008)

0

5

10

15

20

25

30

35

Kore

a UK

Fran

ce USA

Spai

n

Arge

ntin

a

Chile

Mex

ico

Sout

h Af

rica

Braz

il

Colo

mbia

Internet Suscribers p 100 inahab. (2008)

Source: ITU (2009)

Latin America still lags behind other regions in broadband penetration (2007)

Low broadband penetration

Source: Multilateral Investment Fund

Lack of adequate backbone implies that significant opportunities for economic and social enhancement are lost:

• Multiplied effects of network externalities (employment growth, productivity, innovation and value chain re-composition).

• Impact and efficiency of public and private investments.

• Without adequate broadband: increased digital exclusion.

Broadband Importance

7.2

05

101520

2530

3540

Some OECD Countries broadband penetration 2008

Mexico: Broadband Penetration

Source: OECD Broadband Portal

Mexico: 7.2 in broadband penetration

Broadband average monthly subscription price USD PPP (2008)

59.52

0 10 20 30 40 50 60 70 80 90

Slovak RepublicMexico

AustraliaGermany

SpainTurkey

New ZealandLuxembourg

CanadaUnited States

KoreaFrance

Sw itzerlandJapan

Greece

Mexico: Broadband Prices

Accessability. Mexico: 59.52 USD PPP

Source: OECD Broadband Portal

Mexico: Broadband Quality

1513.80

100002000030000400005000060000700008000090000

100000Average Advertised broadband download speeds, kbit/s (2008)

Source: OECD Broadband Portal Note: Advertised speeds are typically the theoretical maximum for the employed technologies. Users have lower speeds.

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62% of homes in Mexico has access to one competitive network (fixed)

Infrastructure Deficit

Mexico: Fixed networks

Source: The Competitive Intelligence Unit

• Key policy objective is to provide widespread and high quality access to broadband:

– Improving connectivity, increasing competition, stimulating innovation / growth and increasing social benefit.

Policy Objective

• Technology: backbone, backhaul, last mile.

• Funding: Public (Australian case); Public-Private Mix; For Profit.

• Regulatory Models: – Pure infrastructure provider (carrier of carriers) establishes and

leases out the backbone, or – Infrastructure and Service Provider.

• Regulatory Policy: Ex-ante regulation (minimal): non-discriminatory clause, wholesale network access.

Strategic Choices

Panel Discussion

• What safeguards should be in place to promote fair competition under this scenario?

• And what institutional conditions are necessary to avoid falling into the same oversights that have caused uneven network development and market inefficiencies in the region?