Financing challenges and opportunities Willie Currie, APC Policy Programme Manager, 3 February 2005

Association for Progressive Communications APC’s principles on financing ICTD The extension of network infrastructure in developing countries is a global public good that benefits everyone because of the value of network externalities. The value of the global information network increases in value as more national networks and individual users are added.

Association for Progressive Communications Current challenge: ICT infrastructure Telecom boom created expectation private sector would roll out ICT infrastructure Financing trends directed developing countries to mainstream ICTD in development sectors (e.g. health and education) before sufficient ICT infrastructure was in place Effective mainstreaming of ICTD cannot take place without affordable access to infrastructure

Association for Progressive Communications Regional space: basic backbone All countries interconnected by regional backbone network Financing mechanisms? –Regional level: e.g. ‘NEPAD Broadband Infrastructure for Africa’ initiative (public private partnership) –Inter-regional level: Regional collaboration and harmonised policy and regulation

Association for Progressive Communications National space: zones MARKET ZONEGrey zone DEVELOPMENT ZONE The space in a country that is served by market forces The space in a country market forces do not reach effectively Zones not geographical Zone boundaries not rigidly fixed Market, community and public actors can be active accross zones

Association for Progressive Communications National and regional spaces and grey areas Grey areas exist between the zones, usually in cities that are in the market zone but need development Regional spaces exist beyond the state’s boundaries and regional ICT infrastructure development is a regional public good

Association for Progressive Communications National space: activity MARKET ZONEGrey zone DEVELOPMENT ZONE Regulated competition in provision of ICT networks and services Market structure ICT in support of development (ICTD) including ICT-enabled services, e.g. pension payouts Policy framed by NICIs/e-strategies Governing principle: network infrastructure a public good

Association for Progressive Communications National space: financing MARKET ZONEGrey zone DEVELOPMENT ZONE Private sector investors PPPs Privatisation Loans Stockmarket flotation Venture capital Universal Access Funds ODA (MDGs, PRSPs) PPPs Community owned networks Development Bank financing

Association for Progressive Communications Digital Solidarity Fund Africa-led initiative Multi-stakeholder Buy-in from several municipalities Creative initiative in sourcing new forms of ‘solidarity’ finance Implemention can be fast-tracked by using existing local government structures Focus on grey zone in municipalities DSF can catalyse bringing the market closer to the development zone and pull the development zone closer to the market

Association for Progressive Communications Possible applications of Digital Solidarity Fund Infrastructure Innovative solutions – urban, peri-urban areas –new technlogies (e.g. wireless) Governance and public service Local e-governance, procurement, transparency, citizen participation, ICT enabled public services Content and culture Community radio, multi-lingual internet content, etc. Capacity building Skills sharing, professional and student exchange between local authorities, ICT in education, schools Solidarity Promotes partnership and community between cities (north-south and south- south)

Association for Progressive Communications Risks and bottlenecks Slow roll out of broadband infrastructure NEPAD broadband initiative not fully or timeously financed Incumbent operators in the Club Consortium resist opening access to EASSY cable and cost of bandwidth in Africa does not go down DSF aims too high and does not gain traction at WSIS

Association for Progressive Communications Risks and bottlenecks Regulatory environment remains incomplete and slow to respond to ICT policy and technological changes Lack of support for ICTD by African governments in their MDG strategies stifles local initiatives Inconsistent ODA strategies

Association for Progressive Communications Opportunities Africa is wired for broadband on an open access basis over next 5 years DSF succeeds in mobilizing resources and new actors for ICTD in cities and local governments ICTD zone blossoms through open access networks, IC-enabled services in rural areas and innovative approaches Private sector investment in market zone continues to climb Large scale ‘up-take’ by multiple actors: CSOs, communities, SSMEs, schools, etc.