Archive for October, 2009

Communication has always been a human need.
ITU believes it is also a human right.
— ITU Tagline

Can everybody get one for free?

Can everybody get one for free?

Finally, the online training is over, even though the final quiz was real tricky!

How was it?

Actually, I’ve learned a great deal on this Universal Access/Universal Services (UA/US) and it is the only thing can help achieving Digital Bangladesh, the current government’s election manifesto. I simply love it! This tagline has a promise; though implementation remains obscure to the policy makers. Each government is obligated to connect everyone, how ambitious it may sound, but it starts with achievable target, like increasing tele-density each year.

How best you can do that?

By placing USO Fund.

Universal Service Obligation (USO) is the obligation placed on designated service provider/operator(s) with an aim to ensure that prescribed services are accessible to all people in a country. The exact scope of USO varies from country to country, but the essence is to connect everyone with government obligation.

How do you do that?

Let’s say, government plans to connect everyone in Domar Upazila (Nilphamari district) and requested for the RFP/TOR on providing a telephone in each household.

All operators responds with their cost analysis and government does a reverse auction.

Lets say, one operator proposed to connect every household with 30 crore (300 millions) taka, other operators would bid for 25, 20 crore and so on. The lowest bidder would get the work-order, say with 15 crore taka.

Government achieves it’s obligation connecting every household – making the tagline “Digital Bangladesh” reality.

Who is funding it?

Here comes the million dollar question.

It’s simple. Just look around, almost all countries are doing it, why would Bangladesh be left out?

The answer, operators are opposing it, saying 98% of the populations are under cellular coverage.

Is that all about coverage? Yes, the access to cheap tariff and device (i.e. handsets) is all that it matters.

Who would provide handsets for free?

Let’s go over the ICT regulation toolkit, you’ll get the answer.

Universal Access and Service Funds (UASFs) are generally financed from one or more of the following sources:

1. Government general budget (developed countries can afford to do that);

2. Industry levy, as a percentage of annual revenue, on certain classes of licensed operators (99% of the countries are following it – if the operators are making billions, they are happy to giveaway millions to connect those under-served);

3. Various other regulatory sources such as the proceeds of license competitions, frequency spectrum auctions and fees (Last example is Portugal, which gave away PCs to students as the financing for the educational programs came from telecom service providers, particularly mobile phone companies. In 2001 and 2002, several companies purchased 3G mobile licenses from Portugal’s government through a spectrum auction that raised EUR 460 million);


4. Once-only contributions from government, financed by loans or grants from international donors such as the World Bank, contributing seed finance to assist UASF start-up in the early years (pretty remote, I wouldn’t even endorse it).

Examples please?

How many examples do you want?

General trends in UAS finance can be found here, little dated one, a note supplied in my training (please jump to page-4, let me know if some developing countries haven’t opted for it!) [Mirror]

Do you have regulation on that?

[Continues …]

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