Capacity Building in Regulation Regional Workshop Universal Access

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Capacity Building in RegulationRegional
WorkshopUniversal Access
The New Telecommunications LandscapeMoving
towards a new Paradigm- Doc 1.1 -
Banjul, Sept. 19-23, 2005
Jean-Marie Blanchard
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Objectives of the Session

• Understand .... at a strategic level
• what is the New ICT Telecommunications
  Landscape
• Identify main barriers to fair evolution
• Taking care of regional specificities
• Team spirit building
• Interactivity and contribution for all
• Sharing a common language

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Agenda of the Session

• Strategic Positioning of key Players
• A totaly new market situation
• Challenges for incumbents operators
• Major concerns for ICT Players
• Results of field survey in West Africa
• Application exercise
• Role of Policy and Regulation

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Introduction Chat

• What are the major changes
• within your job,
• you have been faced to,
• during 5 last years ?
• Please find out some Key words
• related to your external environment

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The most significant facts... Not yet stabilized
at all

• Policy
• Legal End of National Public Monopoly
• Privatization of Public Operators
• Political willingness to use ICT as key enabler
• Market
• Explosion of Mobile Networks
• New Entrants (Mobile, ISP, ...)
• Implementation and Usage
• Emerging Technologies (Wireless, VoIP, ...)
• Community Access
• Internet boom

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The Has been Model
State
Policy
Fees
Total Ownership
PTO Post Telecom Office
Accounting Rate Revenues
Basic Services
Billing
Subscribers
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The New Telecom Operators

• Incumbent Operators
• Progressive Investments
• Keeping Customer base
• Cultural Evolution

Competition Complementarity
Liberalization Deregulation
Added Value Services

• New Entrants
• Return on Investment
• Building Customer Base
• Reaching Critical Size

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Traditional Voice Revenue are strongly threatened

• International Voice Revenues
• are sharply decreasing
• Accounting rate,
• Calling Card services,
• Inbound Voice over Internet

• National and Local Revenues
• are disturbed
• Churn to mobile,
• Lack of profitable Internet services,
• Outbound Voice over Internet

Network modernization Service offer evolution
Profitability and Investment capability ?
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How to secure and to increase Revenues ?
Added Value Services
ARPU
Telco Revenues
Network Coverage
Subscriber Base
. Protecting Investment Optimizing OPEX
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The winning approach Innovative Marketing
Investment Strategy
SERVICES

• What kind of services
• could be offered?
• Which part of expected
• revenues could be invested?

OFFER STRATEGY

• Which services could be offered with available
  Technology ?
• How much is the available
• amount to be invested?

TECHNOLOGY
INVESTMENT STRATEGY
COST
REVENUE
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ICT Landscape and Major players
R E G U L A T I O N

• Equipment Vendors
• Telecommunications
• Networks
• Data Processing

• Services
• Consulting Engineering
• Integration Installation
• Maintenance

F U N D I N G
Incumbent Operator

Other Providers
Mobiles Subsidiary
Private Mobiles
Private ISP
ISP Subsidiary
Telecentres
Unformal
Distributors
Cybercafes
Enterprises
Residential
Administrations
Public
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Results of Field Survey in West Africa
Source CDE Study - JM Blanchard June 2005
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Major Concerns for ICT Players

• ACCESS TO MARKET
• Understanding (50)
• Sector organisation (30)
• Market fragmentation (20)

• ACCESS TO FUNDING
• Banking(80)
• Schemes (20)

• REGULATION
• Governance (30)
• Regulator (30)
• Incumbent (20)
• Incentives (20)

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• ACCESS TO BANDWIDTH
• Cost (30)
• Quality of Service (70)

• POLICY
• Relevancy (40)
• EcoSoc (60)

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• CAPACITY BUILDING
• Basic (60)
• Professional (40)

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XY Nb of answers
Source CDE Study - JM Blanchard June 2005
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The key reasons for success coming !

• Sector Reform in real progress
• Most of Public Monoply felt in 2004
• Regulation authorities are becoming reality
• Huge investments have been already done
• Mobile access networks
• Optical fiber backbones
• Huge market opportunities
• Mobile and Internet Added value services
• Local content
• Innovation and entrepreneurship potential
• A lot of success stories
• Incubators could be developped

ICT sector growth can activate the virtuous
circle of economic and social development, leverag
ing on small local entrepreneurs
Source CDE Study - JM Blanchard June 2005
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Status of Connectivity in Africa
Explosion of Mobiles
60 Millions Mobiles in 5 years
25 Millions Fixed in 30 years
Total Investment per year close to 2 milliards
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Mobile Penetration Ratesin ECOWAS-UEMOA Region

ITU African Telecommunication Indicators, 2004.
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Application Exercise

• How do you explain
• the Explosion of Mobiles
• Networks in Africa ?
• Key Factors for Success

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The major reasons for Success ?

• Beyond Privatization ...Usage is the Key enabler
  !
• Mobility Nomadism
• Prepaid Solvency
• Time to connect Waiting list
• Low cost mobile handset Costly home
  installation
• Low OPEX for Operators Subscriber base
  management
• Most of concerns with fixed Telephony....
• .... are fixed thanks to Mobile !

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Has Investments been Profitable?

• over 5 past years 2000 2004
• Revenues 10 Milliards
• License Fees 4 Milliards
• Net Profit 1 Milliards

Net Profit Operators are often higher than 15
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Market Segmentation in Africa
Demand is not only there !...
Urban
Rural
Personal
Community
Professional
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Is the Context favourableto ICT widespread?
Deregulation Privatisation
User Demand
Political Willingness
Universal Access
Risk for Investors
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Key Concerns from the field

• Liberalization process is too much quicker
• vs. Regulation implementation pace

• Governance not transparent enough
• Regulator not present enough
• Incumbent operator still dominant
• Too many disputes
• Lack of legal incentives

Most of players are requesting for a more
powerful regulator !
Source CDE Study - JM Blanchard June 2005
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Regulation has a key role to playMarket cannot
make enough by itself
Balanced Compromize between...

• Constraints for Suppliers
• Technology
• Physical resources
• Return on Investment
• Operational conditions

• Expectations of Users
• Service availability
• Accessibility
• Security and Freedom
• Equity

Create favorable conditions to satisfy the needs
of the majority of the population and transform
universal access from dream to reality
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Any Questions ?
The New Telecommunications LandscapeMoving
towards a new Paradigm- Session 1 -

• THANKS A LOT FOR YOUR CONTRIBUTION!

Jean-Marie Blanchard ICT for Development Strategic
Consulting and Training Ph 33 6 13 15 36
85 e.mail jmblanchard_at_9online.fr