CoE/ARB Workshop On “Infrastructure Sharing and LLU” Session 9: Infrastructure Sharing Potentials in Developing Countries By: Isabelle Gross Khartoum – Sudan, 27 – 29 March 2011

CoE/ARB Workshop On “Infrastructure Sharing and LLU” Infrastructure sharing potential in the fixed segment – retail - at the retail level (voice and data services): LLU, FTTC, FTTH - depending on the technological maturity of the local market it will be LLU and/or FTTC/FTTH (little FTTC/FTTH deployment in Africa: SA and Algeria) -LLU stands for local loop unbundling. The various ways to implement LLU include full unbundling; line sharing, and bit stream access (see supporting documentation for more detailed definitions) - FTTC stands for fibre to the cabinet while FTTH stands for fibre to the home (next slide with an illustrative diagram) Khartoum – Sudan, 27 – 29 March 2011

CoE/ARB Workshop On “Infrastructure Sharing and LLU” Khartoum – Sudan, 27 – 29 March 2011 Copper, FTTC and FTTH Access

CoE/ARB Workshop On “Infrastructure Sharing and LLU” What are the criteria to use to assess the potential for LLU?  the number of fixed lines in use or potentially available: there is a need for a critical size (see next slide for fixed lines/penetration in selected countries) - to make business sense (commercial viability and profitability) to potential service providers - to fulfil regulatory objectives (e.g. increase the number of broadband connections; make broadband service more affordable) Khartoum – Sudan, 27 – 29 March 2011

CoE/ARB Workshop On “Infrastructure Sharing and LLU” Fixed lines in selected African countries: - Morocco: 1,256,028 (penetration rate: 4%) -stagnating; mobile subs: 32 million (+100% penetration) - Nigeria: less 100,000 (penetration close to 0%); mobile subs: 81 million (+50% penetration) - Kenya: 228,381 (penetration rate: 1%); mobile subs: 22 million (55.9% penetration) - South Africa: +4 million but numbers are going down (less than 10% penetration); mobile subs: +50 million (close to 100% penetration rate) Khartoum – Sudan, 27 – 29 March 2011

CoE/ARB Workshop On “Infrastructure Sharing and LLU” What are the criteria to use to assess the potential for LLU? (2/2) - the potential demand for fixed line services (voice and broadband) ? Is there a lot of untapped demand from customers and service providers? - fixed line services compete with other wireless based services: therefore the shared resource on offer might not attract other services providers which prefer deploying fixed service on wireless technologies (see next slide with Morocco’s current share between fixed wired and fixed wireless subscriber) Khartoum – Sudan, 27 – 29 March 2011

CoE/ARB Workshop On “Infrastructure Sharing and LLU” Khartoum – Sudan, 27 – 29 March 2011

CoE/ARB Workshop On “Infrastructure Sharing and LLU” Group work: What is the status of LLU in your country? Can you assess the potential for LLU in your country? - how many fixed lines are available? - penetration rate mobile/fixed? - alternative wireless technology available to deliver voice and broadband services? - are there services providers that would be interested in commercialising unbundled fixed lines services? - preparation (5 minutes); presentation & discussion (10 minutes) Khartoum – Sudan, 27 – 29 March 2011

CoE/ARB Workshop On “Infrastructure Sharing and LLU” What is the potential of sharing on FTTC/FTTH in developing countries? - FTTC/FTTH promises to offer unlimited bandwidth to end users and business with the potential of many new applications and activites in the development pipeline. - Premature to discuss because there are very few deployments in developing countries (timid start in Africa; rollout in developed markets+ China, South Korea, etc) - Heavy investment to rollout fibre to the home; many stakeholders involved (telcos, regulator, international organisation (EU); Government and local authorities) - Lot of potential for sharing scheme or regulatory sharing framework because concomitant/simultaneous with network rollout (not the case for copper lines and LLU) Khartoum – Sudan, 27 – 29 March 2011

CoE/ARB Workshop On “Infrastructure Sharing and LLU” Khartoum – Sudan, 27 – 29 March 2011

CoE/ARB Workshop On “Infrastructure Sharing and LLU” Infrastructure sharing potential in the fixed segment – wholesale National backbones (1/2) - Many developing countries have begun deploying a range of technologies that will offer broadband access at a local level. These technologies include among others WCDMA, HSDPA and WiMAX. - As data demand escalates, one or more operators (and in some cases, national government) will ultimately see a need to offer or build out a national fibre network. As this is an extremely capital intensive initiative, the likelihood is that there will only be one or two operators, at least initially, one of whom covers just the main urban markets of the country involved. - A critical aspect of promoting wider broadband use is ensuring that national fibre infrastructure is affordable. National bandwidth prices in developing countries are set by one or two providers and as a result, often remain high (see Côte d’Ivoire national backbone on the next slide) Khartoum – Sudan, 27 – 29 March 2011

CoE/ARB Workshop On “Infrastructure Sharing and LLU” Khartoum – Sudan, 27 – 29 March 2011 Diagram of Côte d’Ivoire’s national backbone

CoE/ARB Workshop On “Infrastructure Sharing and LLU” National backbones (2/2) - Regulation and policy must address two broad issues which are often viewed as the stumbling blocks to speedy roll-out and use of national infrastructure: - to address problems emanating from access to bottleneck facilities, namely, where a single dominant infrastructure operator provides or leases facilities (a typical remedy in this regard would include regulations on access to essential facilities) - to address the situation where none of the existing market players are investing in rolling out high-capacity infrastructure to un-serviced or under-serviced areas. Khartoum – Sudan, 27 – 29 March 2011

CoE/ARB Workshop On “Infrastructure Sharing and LLU” Ways of sharing national backbones Sharing national fibre infrastructure involves essentially three key layers shown in the table below. Khartoum – Sudan, 27 – 29 March 2011

CoE/ARB Workshop On “Infrastructure Sharing and LLU” Sharing passive infrastructure for national backbones (1/3) Rights of way The ownership of rights of way is complicated and the legal provisions covering them vary from country to country. Furthermore, their ownership is often spread between a bewildering array of bodies including private parties, national agencies like railway companies and local organizations like municipalities or local/district authorities. - simplify the ground rules for obtaining rights of way - lower or prescribe the cost of the rights of way How does it work in your country (question for the participants)? Khartoum – Sudan, 27 – 29 March 2011

CoE/ARB Workshop On “Infrastructure Sharing and LLU” Sharing passive infrastructure for national backbones (2/3) Ducts, Poles and Power Supply - the approach of the Economic Community of West African States (ECOWAS) - “National Regulatory Authorities shall encourage infrastructure sharing between incumbents and new entrants concerning in particular posts, ducts and elevated points to be made available mutually on a commercial basis, in particular where there is limited access to such resources through natural or structural obstacles” (further details in supporting documentation) Khartoum – Sudan, 27 – 29 March 2011

CoE/ARB Workshop On “Infrastructure Sharing and LLU” Sharing passive infrastructure for national backbones (3/3) Fibre Capacity and Splicing - Lateral and mid-span splices can be offered and gives greater flexibility - Operators would provide their own equipment to connect to the network capacity they have bought and would need to be assured that there was sufficient space to accommodate potential network users. Khartoum – Sudan, 27 – 29 March 2011

CoE/ARB Workshop On “Infrastructure Sharing and LLU” Sharing active infrastructure for national backbones Sharing active infrastructure is a much more contested ground as it goes to the heart of the backbone. Khartoum – Sudan, 27 – 29 March 2011

CoE/ARB Workshop On “Infrastructure Sharing and LLU” Conclusion - on new builds: sharing options at various levels - on existing builds: type of access at a competitive price What sharing does already exist in your country? What are the sharing potentials on national backbones in your country? (10 minutes exchange and discussion with the participants) Khartoum – Sudan, 27 – 29 March 2011

CoE/ARB Workshop On “Infrastructure Sharing and LLU” Infrastructure sharing potentials in the mobile/wireless segment Greatest potential for infrastructure sharing in the mobile/wireless segment - mobile segment more developed than the fixed lines segment in most developing countries (revisit figures on slide 5) - this trend will only be increasing in the future (potential growth of the telecoms sector: mobile segment; developing countries) Khartoum – Sudan, 27 – 29 March 2011

CoE/ARB Workshop On “Infrastructure Sharing and LLU” Type of sharing potentials in the mobile segment (refer back to presentation for session 1) - site sharing/collocation - network sharing - spectrum sharing - MVNOs - Interconnection - National roaming - Towers companies Khartoum – Sudan, 27 – 29 March 2011

CoE/ARB Workshop On “Infrastructure Sharing and LLU” When “potentials” in mobile sharing will become more of a “necessity” Sharing to reduce to a maximum costs - to reach the bottom part of the customers pyramid (ARPU less than US$1) - to maintain level of investments for the rollout of new technology or network coverage (falling voice revenue combined to uncertain levels of data revenue will put more pressure on overall revenue and further down the line on investment expenditures) What do the participants think about this statement (necessity versus potential)? Would this apply to the mobile market in your country? Khartoum – Sudan, 27 – 29 March 2011