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MK689 Part I Understanding the local context and leveraging the available ICT technologies Development of a national broadband strategy in the Middle East and Africa 9 June 2012 • David Eurin

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Page 1: Development of a national broadband strategy in the Middle ...€¦ · UK 2001 onwards: Broadband planning the UK UK 2005-2006: Development of broadband scenarios for the ... Prices

MK689

Part I – Understanding the local context and

leveraging the available ICT technologies

Development of a national broadband strategy in the Middle East and Africa

9 June 2012 • David Eurin

Page 2: Development of a national broadband strategy in the Middle ...€¦ · UK 2001 onwards: Broadband planning the UK UK 2005-2006: Development of broadband scenarios for the ... Prices

MK689

Introduction

Understanding the local context

Leveraging the available ICT technologies

Conclusions so far

… this afternoon: roadmap for a national

broadband strategy

Contents

2

Page 3: Development of a national broadband strategy in the Middle ...€¦ · UK 2001 onwards: Broadband planning the UK UK 2005-2006: Development of broadband scenarios for the ... Prices

MK689

Analysys Mason has helped many countries to develop or refine national broadband plans

3

Ireland 2006-12: Design,

procurement and

implementation support for

the EUR 234m National

Broadband Scheme

UK 2001 onwards: Broadband planning

for regional development agencies on

the UK

UK 2005-2006: Development of

broadband scenarios for the BSG in

the UK

UK 2008 onwards: support to

Cornwall council in its Next

Generation Broadband project

UK 2008: Broadband stakeholder

group models for efficient public

sector interventions in next

generation broadband

Wales 2004 -2010: Commercial and

technical strategy, business planning,

procurement and implementation support

as part of National fibre broadband initiative

Malta 2011: Techno-economic feasibility of a

national FTTH network

Wales 2006: Study to

promote public intervention in

“second generation

broadband” market

UK 2010 onwards: Cost modelling of

next-generation broadband and

regional funding allocations

Italy 2001-2002: Analysis of

government intervention

mechanisms and

prioritisation for broadband

task force

US 2002-2003 : Study of US

broadband policy for TechNet

India 2010: Strategic road-

mapping and assessment of

drivers for the deployment

of a national fibre- optic

backbone in India

Chile 2007-2009: Broadband

promotion study in Chile

Malaysia 2002-2003: National

broadband policy development

Gulf 2010: Regulatory support in

major Gulf country to define three-

year internet development plan

New Zealand 2010 - 2011:

Technical and cost reviews

underpinning the Government’s

national Ultra-Fast and Rural

Broadband strategies

Australasia 2010- 2011: Operator

support to become national partner for

ultra- fast broadband solution.

Subsequently carried out review of

solution and identification of global

best practice

European Commission 2010-

2011: Developed a guide for

investment in broadband

infrastructure, covering small

regional roll outs and national

interventions alike

Norway 2002: Assessed

the potential social and

economic benefits from a

scheme to provide

broadband to selected

public sector sites

Singapore 2005-2006: Provided

support on Next Generation

Broadband Network Initiative

Western Europe 2004:

Analysis of Internet

access prices in Western

Europe

Thailand 2009:

Development of national

broadband plan

Brunei 2009-2010:

Development of national

broadband strategy

Lesotho 2012:

Development of

national

broadband plan

EMEA 2011: National

broadband market

assessment,

benchmarks and

forecasts

Australia 2009: STEM

license, training and

modelling assistance for

National Broadband project

Israel 2011: Technical audit of national

broadband solution used to evidence

international competitiveness and

sufficient investment capability to the

Government Egypt 2008: Provided

commercial and technical fixed

licence bid support addressing

i.a. national broadband

requirements.

Libya 2009: Provided commercial

and technical fixed and wireless

licence bid support addressing i.a.

national broadband requirements.

EU 2011 onwards: Socio-economic

benefits of broadband in 27 EU countries

and private sector funding analysis

Morocco 2011:

National action plan

for the development of

broadband

Page 4: Development of a national broadband strategy in the Middle ...€¦ · UK 2001 onwards: Broadband planning the UK UK 2005-2006: Development of broadband scenarios for the ... Prices

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Introduction

Understanding the local context

Leveraging the available ICT technologies

Conclusions so far

Contents

4

Page 5: Development of a national broadband strategy in the Middle ...€¦ · UK 2001 onwards: Broadband planning the UK UK 2005-2006: Development of broadband scenarios for the ... Prices

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Governments and banks use simple indicators

To make high-level investment decisions, different situations must

be compared and benchmarked

Only consistent indicators are useful

Therefore few indicators are used in practice

This does not reduce the need for an extensive set of indicators

to be studied by academics and economists

Local issues

Specific reviews

5

Page 6: Development of a national broadband strategy in the Middle ...€¦ · UK 2001 onwards: Broadband planning the UK UK 2005-2006: Development of broadband scenarios for the ... Prices

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Broadband economics are driven by density

6

Source: Euromonitor, Analysys Mason

Proportion of total land area

holding 90% of the population Population density in selected countries

0%

10%

20%

30%

40%

50%

60%

Egyp

t

Alg

eri

a

Isra

el

Mo

rocco

Jo

rdan

Tunis

ia

Gaza

/ W

est

Ban

k

Syria

Leba

non

% o

f a

rea

0

100

200

300

400

500

600

700

800

Gaza

/ W

est

Ban

k

Leb

ano

n

Isra

el

Syria

Egyp

t

Jo

rdan

Tunis

ia

Mo

rocco

Alg

eri

a

Inh

ab

. p

er

sq.k

m

Page 7: Development of a national broadband strategy in the Middle ...€¦ · UK 2001 onwards: Broadband planning the UK UK 2005-2006: Development of broadband scenarios for the ... Prices

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Demand for broadband is driven by wealth

7

Source Euromonitor

GDP per capita at PPP (2010)

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

Isra

el

Leb

ano

n

Tu

nis

ia

Alg

eri

a

Egyp

t

Jo

rdan

Syria

Mo

rocco

Germ

any

United K

ingd

om

Fra

nce

Spa

in

Italy

Gre

ece

Cyp

rus

Ma

laysia

Bots

wan

a

Sou

th A

fric

a

Th

aila

nd

Ukra

ine

Geo

rgia

EU

R a

t P

PP

FEMIP countries Other countries

Page 8: Development of a national broadband strategy in the Middle ...€¦ · UK 2001 onwards: Broadband planning the UK UK 2005-2006: Development of broadband scenarios for the ... Prices

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Fixed broadband is rare in the region …

8

Source: TeleGeography, Euromonitor

Fixed broadband penetration of households (2010)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Isra

el

Leb

ano

n

Jo

rdan

Tunis

ia

Gaza

/ W

est

Ban

k

Alg

eri

a

Mo

rocco

Egyp

t

Syria

Fra

nce

Cypru

s

United

Kin

gd

om

Germ

any

Gre

ece

Spa

in

Italy

Mala

ysia

Geo

rgia

Thaila

nd

Ukra

ine

Sou

th A

fric

a

Bots

wa

na

% o

f h

ou

se

ho

lds

FEMIP countries Other countries

DSL, cable, fibre

(FTTC, FTTH), fixed

WiMAX and satellite

technologies

Page 9: Development of a national broadband strategy in the Middle ...€¦ · UK 2001 onwards: Broadband planning the UK UK 2005-2006: Development of broadband scenarios for the ... Prices

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… but mobile networks reach most people

9

0%

20%

40%

60%

80%

100%

120%

140%

160%

Isra

el

Jo

rdan

Tunis

ia

Mo

rocco

Alg

eri

a

Egyp

t

Leb

ano

n

Gaza

/ W

est

Ban

k

Syria

Cypru

s

Italy

Gre

ece

Germ

any

Bots

wa

na

Spa

in

United

Kin

gd

om

Ma

laysia

Ukra

ine

Thaila

nd

Geo

rgia

Sou

th A

fric

a

Fra

nce

% o

f p

op

ula

tion

FEMIP countries Other countriesBenchmarks of mobile penetration of population (2010)

Page 10: Development of a national broadband strategy in the Middle ...€¦ · UK 2001 onwards: Broadband planning the UK UK 2005-2006: Development of broadband scenarios for the ... Prices

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Prices are a lead indicator for take-up

10

All in 2011 (mid-year)

Prices for the cheapest mobile broadband offers Prices for fixed broadband offers of up to 1Mbit/s

0

10

20

30

40

50

60

70

Leb

ano

n

Syria

Alg

eri

a

Jo

rdan

Isra

el

Gaza

/ W

est

Ban

k

Tunis

ia

Egyp

t

Moro

cco

EU

R p

er

mo

nth

0

10

20

30

40

Syria

Isra

el

Tunis

ia

Jo

rdan

Mo

rocco

Egyp

t

EU

R p

er

mo

nth

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Total broadband penetration is still too low

11

0%

20%

40%

60%

80%

100%

120%

0.0

0.5

1.0

1.5

2.0

2.5

3.0

Egypt Israel Morocco Algeria Tunisia Jordan Lebanon Syria Gaza /WestBank

% o

f h

ou

se

ho

lds

Su

bscrib

ers

(m

illio

n)

Fixed broadband subscribers Mobile broadband subscribers Broadband penetration

Broadband subscribers and household penetration (2010)

Page 12: Development of a national broadband strategy in the Middle ...€¦ · UK 2001 onwards: Broadband planning the UK UK 2005-2006: Development of broadband scenarios for the ... Prices

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Introduction

Understanding the local context

Leveraging the available ICT technologies

Conclusions so far

Contents

12

Page 13: Development of a national broadband strategy in the Middle ...€¦ · UK 2001 onwards: Broadband planning the UK UK 2005-2006: Development of broadband scenarios for the ... Prices

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13

Technology Features

Fibre-optic cable Highest capacity available, and highest cost of deployment;

main choice for backhaul and core networks

Copper-based

DSL

Much lower bandwidth than fibre; most practical where

copper networks exist

Fixed wireless Cost-effective widespread population coverage; HSPA+,

LTE and WiMAX can offer peak speeds similar to DSL

Mobile broadband Same economics as fixed wireless networks, but lower

capacity, aimed at smaller devices; most practical where

mobile networks already exist

Satellite

broadband

Offers ubiquitous services; very substantial investment, but

wide geographical coverage (sharing)

Public and private players can leverage different ICT technologies to offer broadband

Page 14: Development of a national broadband strategy in the Middle ...€¦ · UK 2001 onwards: Broadband planning the UK UK 2005-2006: Development of broadband scenarios for the ... Prices

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These technologies have different economics

14

Illustration of the revenue-density approach

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Inte

rna

l ra

te o

f re

turn

(%

)

Population coverage (%)

DSL FTTC FTTH WiMAX HSPA HSPA+ LTE

Viable

areas

Non-

viable

areas

Urban Rural

Page 15: Development of a national broadband strategy in the Middle ...€¦ · UK 2001 onwards: Broadband planning the UK UK 2005-2006: Development of broadband scenarios for the ... Prices

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Fixed and mobile broadband costs vary (different outcomes and services)

15

Source: Analysys Mason

Evolution of total coverage costs for FTTC

Evolution of total coverage costs for LTE

0.0

0.2

0.4

0.6

0.8

1.0

EU

R (

bill

ion

)

Morocco Algeria

Egypt Gaza/West Bank

Israel Jordan

Lebanon Syria

Tunisia

0.0

0.5

1.0

1.5

2.0

EU

R (

bill

ion

)Morocco Algeria

Egypt Gaza/West Bank

Israel Jordan

Lebanon Syria

Tunisia

ICT indicators should include supply-side metrics, such as the total

cost of ownership of specific technologies

Page 16: Development of a national broadband strategy in the Middle ...€¦ · UK 2001 onwards: Broadband planning the UK UK 2005-2006: Development of broadband scenarios for the ... Prices

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Not one technology, but a combination

The best overall solution will usually combine several

technologies, involving a trade-off of cost, performance and reach

that is considered appropriate for each context

The most suitable mix depends on

the economics of the technologies being considered

the geography and population of the country concerned

the services to be provided to different users and prices

the objectives of the country and the budget available

Governments and investors need ICT indicators to make these

decisions

16

Page 17: Development of a national broadband strategy in the Middle ...€¦ · UK 2001 onwards: Broadband planning the UK UK 2005-2006: Development of broadband scenarios for the ... Prices

MK689

Introduction

Understanding the local context

Leveraging the available ICT technologies

Conclusions so far

Contents

17

Page 18: Development of a national broadband strategy in the Middle ...€¦ · UK 2001 onwards: Broadband planning the UK UK 2005-2006: Development of broadband scenarios for the ... Prices

MK689

Conclusions from Part I

A sound national broadband strategy will

be based on the local context (i.e. some key ICT indicators)

leverage specific strengths of ICT technologies

not be the same as strategies in other countries, but unique

have clear objectives, ambitions and budget

18

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... and still to come in Part II (this afternoon)

How to build a successful national broadband strategy

roadmap and approach

outline of the national broadband strategy document

19

Page 20: Development of a national broadband strategy in the Middle ...€¦ · UK 2001 onwards: Broadband planning the UK UK 2005-2006: Development of broadband scenarios for the ... Prices

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Contact details

20

David Eurin

Partner, Head of Africa

[email protected]

Analysys Mason Limited

Bush House, North West Wing

Aldwych, London WC2B 4PJ, UK

Tel: +44 (0)845 600 5244

Fax: +44 (0)20 7395 9001

www.analysysmason.com