southeastern europe telecommunications & informatics research institute southeastern europe...

Southeastern Europe Telecommunications & Informatics Research Institute

Southeastern Europe Southeastern Europe Telecommunications & Informatics Telecommunications & Informatics

Research InstituteResearch Institute

Broadband Penetration in LessBroadband Penetration in LessDeveloped Areas:Developed Areas:

The Case of SEE CountriesThe Case of SEE Countries

Dr. P. AngelidisDr. P. Angelidis


Research and Analysis of the Telecommunications market in Southeastern Europe.Overview of the current ICT Infrastructure in Southeastern Europe.Market research of the current demand on Telecommunications and Informatics services as well as estimation of future trends.Studies on behalf of local and interregional actors.Identification of the investment opportunities on telecom services, products and equipment. Organization of workshops, congresses, scientific events and conferences on Telecommunications and Informatics issues.Guidance and information on funding opportunities from the EU and other international bodies for the development of ICT in Southeastern Europe.

Southeastern Europe Telecommunications Southeastern Europe Telecommunications

& Informatics Research Institute (INA)& Informatics Research Institute (INA) a private sector initiativea private sector initiative


CollaborationsCollaborations


Sofia NodeSofia Node

Belgrade NodeBelgrade Node

INA Academy ThessalonikiINA Academy Thessaloniki

INA Academy Nodes in SEE INA Academy Nodes in SEE

Tirana NodeTirana Node

Sarajevo NodeSarajevo Node

Bucharest NodeBucharest Node

Skopje NodeSkopje Node

Podgoritsa NodePodgoritsa Node


Broadband FactsBroadband Facts Always-on connectionsAlways-on connections

Voice and data on one lineVoice and data on one line

High speeds resulting in wide range of High speeds resulting in wide range of applicationsapplications

Advanced (multimedia) applications / increased Advanced (multimedia) applications / increased productivityproductivity

Upgrading networks and equipment resulting in Upgrading networks and equipment resulting in high investment costshigh investment costs

Various technology optionsVarious technology options

Author

1. What is Broadband?The most interesting and challenging developments in ICT are related to Broadband. These tend to challenge the established techs and is expected to create a major shift in the way we communicate, learn and do business.


Broadband & ContentBroadband & Content It is believed that content is needed for the development of It is believed that content is needed for the development of

broadband networksbroadband networks However, broadband and content are interrelatedHowever, broadband and content are interrelated Demand for broadband deployment already exists due to:Demand for broadband deployment already exists due to:

Reduction of product costs and increase of productivityReduction of product costs and increase of productivity Minimizing distances for remote businessesMinimizing distances for remote businesses Effectiveness of public and private Internet servicesEffectiveness of public and private Internet services Facilitation of content creation and better exploitation of on-Facilitation of content creation and better exploitation of on-

line timeline time

Content creation will increase demand for broadband Content creation will increase demand for broadband through:through: Creation of applications for public on-line services that will Creation of applications for public on-line services that will

reduce the time wasted in public officesreduce the time wasted in public offices Creation of applications for efficient B2B interactionsCreation of applications for efficient B2B interactions Entertainment, gaming, traveling and cultural applications Entertainment, gaming, traveling and cultural applications

involving video and audio streams, even virtual reality toursinvolving video and audio streams, even virtual reality tours

Author

1. What is Broadband?Broadband is not only infrastructure but it is also services and content


Broadband & Content +Broadband & Content +

INA has shown that the important thing is availability: INA has shown that the important thing is availability:

once it is there people will use it!once it is there people will use it!

Investment incentives are needed: Investment incentives are needed: PPPs offer the PPPs offer the only(?) viable solutiononly(?) viable solution

(P. Angelidis “To b(roadband) or not to b(roadband)”, eStrategies Feb. 2005 pp. 70 - 73)(P. Angelidis “To b(roadband) or not to b(roadband)”, eStrategies Feb. 2005 pp. 70 - 73)

Author

1.


South East Europe TodaySouth East Europe Today

• Lacking information society development due to political, Lacking information society development due to political, economical and social instabilitieseconomical and social instabilities

• Digital divide not only on international level but also within Digital divide not only on international level but also within the countries (e.g. Urban/Rural)the countries (e.g. Urban/Rural)

• Gradual realization of ICT importance for developmentsGradual realization of ICT importance for developments• Promoting Information Society will transform SEE Promoting Information Society will transform SEE

countries:countries:– From small, fragmented, unattractive marketsFrom small, fragmented, unattractive markets

– Into developing, competitive and open fields attractive to Into developing, competitive and open fields attractive to foreign investmentsforeign investments

– And finally lead them to development and EU membershipAnd finally lead them to development and EU membership

Author

2. What is the way forward for SE Europe? SE Europe is far behind the developed world with the added problem of the intensity of the digital divide even domestically on a Urban/Rural level. However the gradual realisation of ICT importance for development on a political level may become essential. The promotion of Information Society on a regional rather than national level will develop the small fragmented and under developed markets to their transformation into developing, competitive and open fields attractive to foreign investments and finally lead them to development and EU membership.


Broadband Facts for South East EuropeBroadband Facts for South East Europe

Very low deploymentVery low deployment Urban deploymentUrban deployment Inadequate regulationInadequate regulation ExpensiveExpensive Need for big infrastructure investments Need for big infrastructure investments

(digital divide)(digital divide) Lack of “bandwidth-hungry” e-applicationsLack of “bandwidth-hungry” e-applications

Author

2. What is the way forward for SE Europe? The figures confirm the assessment of low level penetration in SE Europe. These are the main problems of Broadband deployment in SE Europe. However they are best viewed as opportunities rather than obstacles


Broadband in South East EuropeBroadband in South East Europe

o Broadband penetration is Broadband penetration is lower than 2% in most of the lower than 2% in most of the countries.countries.

o In countries with the widest In countries with the widest broadband deployment like DSL broadband deployment like DSL is the prevalent technology.is the prevalent technology.

Author

2.


Rural Deployment FactsRural Deployment Facts

Low Internet penetration and demandLow Internet penetration and demand DSL technology would require replacement of all DSL technology would require replacement of all

bad quality linesbad quality lines Lack of incentives for operators to deploy Lack of incentives for operators to deploy

broadband in rural areasbroadband in rural areas Big investment is required, long-term and Big investment is required, long-term and

uncertain ROIuncertain ROIDecentralization via increased competitiveness Decentralization via increased competitiveness

of rural businesses (including SMEs)of rural businesses (including SMEs)Bridging the digital divide for rural and urban Bridging the digital divide for rural and urban

individual usersindividual users

Author

3. What are the hurdles for rural broadband deployment? What are the root causes of the Digital Divide? Hard numbers indicate that there is an strong correlation of high costs and low broadband deployment. Rural areas with low density population and urban areas of low income population are mainly the excluded for the IS revolution and the broadband challenge.The situation for broadband deployment is more troubling where it is more needed. Rural areas pose a great challenge for all countries not only in SE Europe but in other parts of the world where geography complicates the situation more.


Root Causes of Digital DivideRoot Causes of Digital Divide Monthly Costs per Subscriber as Function of Population Density Monthly Costs per Subscriber as Function of Population Density for all Current Broadband Access Technologies Including Hybrid for all Current Broadband Access Technologies Including Hybrid Wi-Fi solutionsWi-Fi solutions

0

50

100

150

200

250

300

1 10 100 1000 10000 100000

Sites per square km

Eur

o pe

r su

bscr

iber

per

mon

th

DSL FWA CableWi-Fi + Leased Line Backhaul Wi-Fi + FWA Backhaul Wi-Fi + Satellite Backhaul

All current access technologies unviable

Author

3.


Broadband Wireline TechnologiesBroadband Wireline Technologies DSL and cable broadband are uneconomical for low density population DSL and cable broadband are uneconomical for low density population

regionsregions Copper reserves are not enough! (in this world)Copper reserves are not enough! (in this world)

0

50

100

150

200

250

300

1 10 100 1000 10000 100000

Sites per square km

Eu

ro p

er

sub

scri

be

r p

er

mo

nth

DSL Cable

DSL unviable

Cable Broadband unviable

Author

3.


Where are the Unserved?Where are the Unserved?

Distribution of Distribution of European European

households by class households by class ofof

DensityDensity

eEurope Advisory Group 29 eEurope Advisory Group 29 June 2004June 2004

Author

3.


Cost ComparisonCost ComparisonComparison of All broadband Access Technologies Total Monthly Comparison of All broadband Access Technologies Total Monthly

Costs per SubscriberCosts per Subscriber

0

50

100

150

200

250

300

1 10 100 1000 10000 100000

Sites per square km

Eur

o pe

r sub

scrib

er p

er m

onth

DSL FWA CableWi-Fi + Leased Line Backhaul Wi-Fi + FWA Backhaul Wi-Fi + Satellite BackhaulSatellite 1m subscribers Satellite Today

Only satellite is viable

Author

4. Which tech solutions are viable?A closer analysis of the costs of the various techs in correlation with population density unveils the economic viability for each solution.


Technology Assessment for Rural DeploymentTechnology Assessment for Rural DeploymentCostCost Data Data

RatesRatesQuality Quality

GuaranteeGuaranteeSecuritySecurity License License

RequiredRequiredRequire-Require-

mentsments

ADSLADSL MediumMedium HighHigh HighHigh HighHigh YesYes --

CableCable Very Very HighHigh

Very Very HighHigh

LowLow LowLow YesYes --

LMDSLMDS MediumMedium Very Very HighHigh

LowLow LowLow YesYes LoSLoS

Wi-FiWi-Fi LowLow HighHigh ?? MediumMedium NoNo LoSLoS

WiMaxWiMax LowLow Very Very HighHigh

HighHigh MediumMedium Yes/NoYes/No --

ADSL ADSL ReachReach

LowLow HighHigh HighHigh HighHigh YesYes --

UMTSUMTS HighHigh HighHigh HighHigh MediumMedium YesYes --

SatelliteSatellite Very Very HighHigh

Very Very HighHigh

HighHigh HighHigh YesYes --

Author

4. Which tech solutions are viable?A comparison matrix helps in doing the appropriate evaluation of the available techs.


Broadband Deployment Action Plan for Underserved (Rural) Areas

Regulatory authority and government incentive Regulatory authority and government incentive provision to operatorsprovision to operators

Separate environmental and geographical Separate environmental and geographical assessment for each rural areaassessment for each rural area

Technology assessmentTechnology assessment Backbone network expansionBackbone network expansion Installation on demandInstallation on demand Combine installation with wide offering of Combine installation with wide offering of

servicesservices Appropriate targeting following market analysisAppropriate targeting following market analysis Operator alliances and cooperationOperator alliances and cooperation

Author

5. What should policy makers, enterpreneurs and the civic society do?A mixture of political commitment, financial incentives, awareness and technology transfer seems to be the best recipie as international best practice shows


What we miss

for governments an action plan for broadband for governments an action plan for broadband deployment based on:deployment based on: Case-by-case assessment of needsCase-by-case assessment of needs Technology evaluationTechnology evaluation Regulatory reform needsRegulatory reform needs Incentive creationIncentive creation

for operators an action plan for broadband for operators an action plan for broadband deployment based on:deployment based on: Investment plan based on most economical technology Investment plan based on most economical technology

for each casefor each case Cost analysisCost analysis Short-term ROIShort-term ROI

Author

5. What should policy makers, enterpreneurs and the civic society do?These are the main action points for governments and operators, the two most important stakeholders in this exercise.


Kick-off Meeting for “bSEE” WORKSHOP ON TELECOMMUNICATIONS

10th THESSALONIKI FORUM 24-25 of May 2004

Representatives from Governments, Industry and NGOs from SE Europe participated at the 10th Thessaloniki Forum Workshop on the Telecom Sector and

Emphasized the need to realize:

“…The leapfrogging potential of electronic communication services for countries under development [like SE Europe countries]…”

Author

Case Study


How to act?How to act?SEE Countries need to act:SEE Countries need to act:

Immediately, to address the gap between Immediately, to address the gap between developed and underdeveloped countriesdeveloped and underdeveloped countries

Decisively, to change thinking and Decisively, to change thinking and attributesattributes

Cooperatively, to leverage advantagesCooperatively, to leverage advantagesIngeniously, to leapfrog technologically Ingeniously, to leapfrog technologically

SEE Countries need to capitalize on ICT potential and SEE Countries need to capitalize on ICT potential and their rich human capital in order to attract foreign their rich human capital in order to attract foreign investment and exploit new technological investment and exploit new technological opportunitiesopportunities


‘‘bSEE’ (pronounced beezy)bSEE’ (pronounced beezy)ConceptConcept

“bSEE”’ s aim is:

a. The coordination of policies;

b. The interconnection of networks for the deployment of Broadband services at a regional level on a coherent to the European Union manner.

This will be realized with the formulation of a Memorandum of Understanding (MoU) that will be signed by the countries of the region, the Stability Pact and (potentially) the European Commission, and a Task Force that will coordinate the actions for the implementation of the MoU.


Best Practice from the Energy Sector The Commission brought forward proposals for the creation of a

regional electricity market in South East Europe (SEE) in March 2002 with the aim of eventually creating a regional energy market

By November 2002, a Memorandum of Understanding (“The Athens Memorandum”) was signed at the Athens Ministerial by all the countries with the Commission and the Stability Pact acting as sponsors

Creation of Energy Association of SEE Countries by End of 2004

The Athens Memorandum of Understanding for Energy and the “South Eastern Europe Regional Energy Market” initiative represent an excellent such precedent and a best practice to repeat in the ICT sector


‘‘bSEE’ MoU ScopebSEE’ MoU ScopeA unified broadband market fully interconnected to the European and Global networks, a world model capitalizing on

Human Resource Development - Human Capital

Modern Electronic Communication Technologies

Excellence in Research

Regulatory Framework Competence


‘‘bSEE’ MoUbSEE’ MoU “bSEE” will outline a strategy for the progressive creation of an

integrated regional market for broadband in South Eastern Europe. Improving the supply of broadband and stimulating the demand is crucial to improve and sustain economic development in South East Europe

“bSEE” requires a strong commitment by the countries of the region towards market oriented reforms, regional integration and sustainable development

“bSEE” will offer significant advantages both in terms of improved utilization of existing infrastructure and human capital capacities, but also in fostering more cooperation and integration in the region, which will result in economic growth, stability and investment


A SE Europe “bSEE” Task Force shall be set up to identify and facilitate programs for the purpose of:

a. Setting statutory and regulatory objectives and frameworks with respect to European Union Directives and global standards;

b. Aggregating demand leading to broadband development;c. Evaluating of broadband technologies and international

best practices;d. Developing skills through exchange programs, and

through joint sponsorship of conferences, training programs and seminars in the field of Broadband technologies;

‘‘bSEE’ Implementation (1/2)bSEE’ Implementation (1/2)


‘‘bSEE’ Implementation (2/2)bSEE’ Implementation (2/2)e. Prompting planned activities regarding broadband

investment that would result in building awareness, increasing level of public interest and empowering SME’s to participate in such initiatives;

f. Addressing market failures that are beyond the reach of policy tools;

g. Providing incentives to the private sector for broadband development, especially in rural and remote areas; and

h. Monitoring progress and producing timely reports


‘‘bSEE’ Task Force Key FunctionsbSEE’ Task Force Key Functions

Monitoring Broadband Development in SE Europe; Networking all actors involved in broadband

development in SE Europe; Harmonization of the region with the EU and global

standards; Promoting and increasing Broadband connectivity in SE

Europe;creating attractive investment environment Joint development of interactive broadband multimedia

content, information security and e-Government; and Facilitating the development, interaction and exchange

of know-how between SE Europe countries and the EU


‘‘bSEE’ key issuesbSEE’ key issues

Stability Pact and European Commission support

National Governments active involvement and commitment

Identification of financingCreation of Momentum


‘‘bSEE’ BenchmarksbSEE’ Benchmarks(currently under review)(currently under review)

Benchmark 1: Increase broadband penetration at growth rates high enough to narrow the broadband “divide”

Benchmark 2: Recognize the qualitative importance of broadband as a crosscutting productivity tool

Benchmark 3: Mobilize more effectively relative strengths in human resources for broadband deployment

Benchmark 4: Increase the rate of creation and diffusion of ICT in the region as a source of value added and productivity

Benchmark 5: Establish a set of common broadband policy commitments reflecting the diversity of broadband infrastructure in SE Europe

Benchmark 6: Reinforce the institutional capabilities for designing, delivering and evaluating ICT policy in regard to broadband


‘‘bSEE’ Latest DevelopmentsbSEE’ Latest Developments

• Special Coordinator of the Stability Pact Dr. Erhard Busek welcomes the idea

• Officially adopted by the Greek Government• European Commission have expressed their support• Thessaloniki 30 June / 1 July regional conference at a ministerial level

where bSEE MoU will be signed and Task Force will be formed• CLDP is financing a report on “National Strategy for Broadband”; results

expected by September will set the path for bSEE and the countries• UNDP/INA will further focus their ongoing work on PPP schemes for ICT on

broadband • EBRD expressed willingness to co-finance broadband projects in the region• WorldBank reported plans on financing broadband projects in the region


Goal: Europe “to become the most competitive and

dynamic knowledge –based economy in the world” (Lisbon, March 2000)

Europe as a whole and not only part of it

Telecommunications without national borders


Let’s get “bSEE”!!!

Thank you for your attention

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