Jerker Torngren 3. USO, a Case study The Romanian approach to providing access Jerker Torngren 1

Jerker Torngren The Romanian telecom market Fully liberalised 2003 Impressive number of registered fixed network providers but few making any impact. Very low penetration rate in rural areas High mobile penetration rate but still areas without coverage Some operators using satellite links 2

Jerker Torngren The consumer perspective In rural areas only around 10 lines per 100 inhabitants In general low buying power in rural areas. Many families have relatives in other countries, demand for profitable incoming traffic. Also high demand for internet services, including 3

Jerker Torngren Our Idea The USAID funded RITI-dot Gov project established a few community centres to test if it would function. EU encourages specific measures for rural and other isolated areas Key ideas: Telcos to provide connectivity External financing of equipment Local commitment for management and operating costs 4

Jerker Torngren The Telecentre The Centre should have: Good connectivity Phone, fax and copy machine Answering machine to record incoming calls when centre was not staffed Computers connected to the internet Trained staff to help users Possibilities to measure price of each call 5

Jerker Torngren How we did it Selected a few municipalities with the need and being prepared to contribute. Signed agreement with the Municipality covering their obligations Convinced operators to establish connectivity on their own expense for the trial USAID funded the equipment 6

Jerker Torngren Evaluation and continuation The experience showed positive results even beyond our expectations! Based on our very good experiance we submitted a proposal to the Ministry. The Ministry included, with some modifications, our proposal in its USO policy and has now established a large number of centres. 7

Jerker Torngren The Romanian Community centres The regulator selected the municipalities. For each village a tender was conducted, based on estimated cost for establishing and operating. “negative auctioning” The winning bid considered as the “net cost” to be covered out of the Fund. 8

Jerker Torngren Partners The universal service provider; access and equipment The local administration; management and services to end users The regulator; monitors the performance and financing 9

Jerker Torngren Not entirely in line with the EU Directive A community approach instead of individual Not only provision of services but also equipment Nevertheless financing over the Fund Engagement by both operators and local institutions. The EU Commission was informed beforehand 10

Jerker Torngren Personal conclusion The EU Commission understands that transition countries can’t fully meet the USO Directive. The Commission thus accepts solutions that lead in the right direction The solutions must not distort competition but encourage new constructive measures When relevant, keep the Commission informed 11