BENCHMARK ON POLICIES AND FUNDING OF UNIVERSAL SERVICES Africa / Europe ITU Amman 02-05

PRESENTATION OF CLARITY A consulting company specialized in strategy and organisation in the telecommunication field. A group of partner’s strong of more than 20 years of operational experience and practice at management level within incumbents Telco, alternative carriers and Regulatory Authorities. A specific expertise of International business and interconnections, All kind of regulatory aspects People and change management within companies A privileged and independent partner claire.audin@clarity.fr

SUMMARY Universal service has no universal applications Universal service policies Africa / Europe Funding benchmark Regulatory benchmark Conclusion claire.audin@clarity.fr

UNIVERSAL DEFINITION, REGIONAL TRANSLATION Teledensity or Accessibility Same price for all or Affordability DEFINITION « to promote the availability of quality services at just, reasonable and affordable rates to all customers including those in low income, rural, insular and high cost areas  » Telecom Act 1996 Quality of service : Set up delays Fixing problems ASR, PDD, Audio Type of services : Telephony Internet claire.audin@clarity.fr

TELEDENSITY : FIGURES claire.audin@clarity.fr Fix line per 100 inhabitants Mobile subscriber per 100 inhabitants 15 10 5 40 30 20 10 Egypt Jordan Tunisia South Africa Algeria Morocco Senegal Ivory Coast Ghana Cameroon South Africa Morocco Jordan Tunisia Ivory Coast Senegal Egypt Cameroon Ghana Algeria 0 1,000 2,000 3,000 4,000 0 1,000 2,000 3,000 4,000 GDP per inhabitant (USD) GDP per inhabitant (USD) source : pyramid research 2004 France : 67/100 France : 85/100 claire.audin@clarity.fr

TELEDENSITY EVOLUTION (source WEFA, McKinsey) claire.audin@clarity.fr

AFFORDABILITY : COMPARISON ON PUBLIC TARIFFS In euros For 1 min PH from fix line France Senegal Tunisia Jordan Burkina Local tariff (PH) 0,033 0,047 0,0062 0,014 0,076 National tariff (PH) 0,091 0,13 0,075 0,027 0,1524 Average international tariff (PH) 0,20 0,32 0,40 0,34 0,5335 Monthly rate 13 3,68 12,4 4,23 3,81 Installation - 54,88 37,2 35,88 45,73 PIB / inhabitant 20 400 1 200 2 050 1 300 900 Cost of an average communication basket* 39,82 33 17,93 17,64 60,89 Basket / PIB (%) 2,3 % 33 % 4,1 % 13 % 81,2 % * Average basket = 5H/month local + 2H/month national + 30 min/month Intern claire.audin@clarity.fr

PRIORITIES SCALE + - EUROPE ADSL reach (high speed internet) Usage for the few who cannot afford to pay at full rate Covering needs of specific categories : schools, libraries… High level quality criteria and full services range MIDDLE EAST & NORTH AFRICA Teledensity via Wireless coverage (GSM or satellite) Affordability for the majority Availability in rural areas mainly 4) Basic services availability : voice telephony and Internet dial-up mainly AFRICA Accessibility via “telecentre” and “cyber cafe” Affordability for the majority Availability for all 4) Basic services availability : voice telephony mainly + - claire.audin@clarity.fr

UNIVERSAL SERVICES POLICIES IN EUROPE Increase monthly fees / Decrease communications prices Allow competition on ADSL delivery to induce price decrease Decrease funding of Universal Services Open universal services delivery to new operators claire.audin@clarity.fr

UNIVERSAL SERVICES POLICIES IN AFRICA Set up the regulatory framework for Universal Services delivery Priorities the needs and analyse the solutions and their costs Establishing the funding mechanisms Choose the right players for Universal Services delivery claire.audin@clarity.fr

ESTIMATED COST FOR US DELIVERY France USA Senegal Cameroon Ivory Coast Burkina Faso Estimated Cost (USD) 0,4 M $ Contribution to USF in 2002 2,5 M $ Contribution to USAC in 2002 4 M $ Evaluation by Sonatel Needs : 4,5 M $ (1) Or 15 M $ (2) Budgeted : 20 M $ 73,9 M $ Comment * 175 200 for high cost areas * 102 800 for low income 18 600 for public phones French ART 50% for schools and libraries 20% for high cost areas USAC For 2 200 lines open in rural areas Gaston Zongo "Rapport sur les télécentres" : Cost for 150 BTS : cost for 1100 VSAT Rapport Intelecom 2002 +300 000 lines in 4years Licence obligation To obtain teledensity of 4/1000 in Rural areas Study from P&T ministry of Burkina claire.audin@clarity.fr

UNIVERSAL SERVICES - REGULATORY FRAME claire.audin@clarity.fr

CONCLUSION Universal Service definition has to be translated into regional / national priorities Situation between US, Western EEC, MEA and other countries are very different. That for priorities differ from country to country. Models and frame should be different too. Laws and Regulation must exist and have to be  Equitable  Non Discriminatory  Transparent and Measurable Mechanism for delivery and funding have to be :  Specific  Predictable  Sufficient claire.audin@clarity.fr

THANKS FOR YOUR ATTENTION Claire Audin Chief Executive Officer +33 6 63 31 60 41 claire.audin@clarity.fr 14 quai Léon Chausson - 78820 Juziers - France claire.audin@clarity.fr