1. Presentation by: Maikano Abdullahi Secretary, Universal Service Provision Fund July 2013 INDUSTRY ROUND TABLE Partnering to Deliver Sustainable Universal Access and Service

2. Outline  Session Objectives  Background/Introduction  Review of Past Performance  Proposed Operating Model  Conclusion/Q & A 2

3. Session Objectives The objectives of the session are to:  Provide an understanding of the USPF’s approach to implementing universal access and service programmes/projects  To obtain the buy-in and participation of relevant stakeholders in the USPF’s programmes and projects  To obtain inputs/comments 3

4. 2.0 Background/Introduction

5. The USPF’s key objective is to ensure the availability, accessibility and affordability of telecommunication services to underserved and unserved groups and communities across Nigeria. To achieve this, the USPF in its SMP 2007 – 2011 designed the following projects along two programme focus areas: 5 Background/Introduction Connectivity BTRAIN (BackboneTransmission Infrastructure) Accelerated Mobile Phone Expansion (AMPE) – BTS & CIP Rural Broadband Initiative (RUBI) Access School Access Project (SAP) Tertiary Institution Access Project (TiAP) E-Library Community (Communication Centres CCCs)

6. Background/Introduction (cont’d) The two broad programmes of the USPF were designed to complement each other in facilitating universal access and service: 6  Mostly subsidy provision  Lowering the entry level in rural areas  Increase availability of services  Mostly grant provision  Create demand  Result in viability of projects  Sustainability of projects by the new “digital lifestyle’’ ConnectivityAccess

7. 3.0 Review of Past Performance

8. 8 Following the expiry of the SMP 2007 – 2011, KPMG conducted an independent review of the USPF’s performance over the past five (5) years. The review was two-pronged and examined the following: Introduction Has the USPF clearly articulated its strategic goals, priorities and initiatives? Were projects appropriately designed and planned? Was the USP able to implement planned programmes/ projects effectively ? Was the expected impact of these projects felt by the beneficiary communities? Execution Strategy

9. 9 USPF’s planned projects were implemented using the following operating principles: Key Operating Principles Projects were designed and implemented uniformly across all target communities A standard % of capital expenditure incurred on infrastructure projects was given as subsidies to project Implementers Grants were awarded for the implementation of access projects and the operational costs of these projects borne by the USPF Bidders were required to select target communities from identified geo-political zones

10. 10 In tandem with tested practice, the USPF had developed a medium term strategy document which clearly cascaded its mandate down to the level of its programmes and projects Performance Results Strategy Execution Execution of planned strategy and programme/projects was challenging and did not yield the excellent results anticipated by the USPF Our review showed the following:

11. 11 The results achieved by the USPF through the SMP 2007 – 2011 are outlined in the table below: Performance Results (cont’d) ProjectsTargetsAchievements Connectivity Projects BTRAIN RUBI AMPE – BTS AMPE – CIP Access Projects SAP TiAP E Library CCCs 1,000 KM 183 403 203 1,858 374 74 364 500 KM 12 59 5 766 193 74 224

12. 12 Key Barriers to Effective Execution Some of the reasons identified for the sub-optimal implementation of the USPF’s projects are highlighted below: Inadequate information about the features and characteristics of target areas/communities 1 1 The scale of projects implemented was inadequate to effectively engage the Industry Operators 3 3 Some of the projects were designed and implemented as stand-alone projects. This increased the costs of deployment while diminishing the ability of the projects to be sustainable 4 4 Projects were designed and implemented using a “one size fits all” approach resulting in a mismatch between the needs of beneficiaries and USP interventions 2 2 Subsidies were given only in relation to capital expenditure incurred on infrastructure, thus diminishing the incentive for Industry Operators to participate in project implementation 5 5

13. 4.0 New Operating Model

14. 14  Following the independent review of the USPF’s performance by KPMG and an Impact Assessment conducted by Unilag Consult, the Board and Management of the USPF conducted a retreat to examine the lessons learnt and ensure previous mistakes are not repeated  As an outcome of the retreat, a Strategic Management Plan (SMP), responsive to the issues identified in previous years, was developed for the period 2013 – 2017  This section of the presentation provides an overview of the SMP 2013 -2017 and the Operating Model which the USPF will implement to facilitate the achievement of its overall strategic targets Introduction

15. 15 The highlights of the SMP 2013 – 2017 are represented below: Strategic Management Plan 2013 - 2017 A full version of the SMP 2013 – 2017 can be downloaded from www.uspf.gov.ng

16. 16 Strategic Management Plan 2013 – 2017 (cont’d) The current SMP will retain the two broad programmes of the USPF i.e. Connectivity and Access Access Programmes Access Schools Access Project E-Health Projects E – Accessibility Projects Community Communication Centres Projects defined under the Access Programme will be retained from the previous SMP, however, they will be designed differently to accommodate the varied needs of the target beneficiaries. Other Access projects will be designed and implemented in the five year period.

17. 17 Strategic Management Plan 2013 – 2017 (cont’d) Connectivity Programmes Our aim is to use the projects under the Connectivity Programme as a platform for facilitating the sustainability of the Access projects. Thus, in the next five years, we shall pursue mobile expansion programmes vigorously The RUBI project will provide Internet PoPs in target communities for last mile access using a range of technologies like Wifi, WiMax etc. Provide subsidy for the deployment of 1,000 BTS every year Support the deployment of 3,000 KM of fibre every year Deploy Internet POPs in 5 clusters every year Key Targets Basic Transmission Infrastructure (BTRAIN) BTS Project Backbone Transmission Infrastructure (BTRAIN) University Inter- Connectivity (UNICC) Connectivity Rural Broadband Internet (RUBI)

18. 18 The strategic goals of the USPF as defined in the SMP 2013 – 2017 are anchored on the following key changes in operating model: Operating Model Integrated approach to project planning and implementation Meaningful engagement of stakeholders Sustainability !!! Industry Operators as Implementing Partners Implementation of a Robust Monitoring and Evaluation Framework

19. 19 How will we achieve the key thrusts/principles of our Operating Model? Service Delivery Model Clustering of Target Areas Underserved/unserved areas shall be grouped into manageable clusters/bundles. Projects will be cluster specific Clustering of Target Areas Underserved/unserved areas shall be grouped into manageable clusters/bundles. Projects will be cluster specific Reverse Auction Clusters shall be bided for by Industry Operators on a competitive basis Reverse Auction Clusters shall be bided for by Industry Operators on a competitive basis Subsidy: (CAPEX + OPEX) The USPF shall explore a mix of financial and non-financial subsidy for operational costs for connectivity projects e.g. BTS, FOC, etc Subsidy: (CAPEX + OPEX) The USPF shall explore a mix of financial and non-financial subsidy for operational costs for connectivity projects e.g. BTS, FOC, etc Simplified Processes The USPF will streamline internal processes to improve efficiency, transparency and reduce unnecessary bureaucracy both in RFP document, selection of bids and of project implementation Simplified Processes The USPF will streamline internal processes to improve efficiency, transparency and reduce unnecessary bureaucracy both in RFP document, selection of bids and of project implementation

20. All Request for Proposals (RFP) for selecting Connectivity projects will include the criteria for evaluating the bids, e.g. the BTS Project: 20 Simplified Request for Proposals S/NDescriptionMaximum Marks Services 1Voice10 2Voice + VAS20 3Voice + VAS + Data30 4Mobile Broadband40 Power Solutions 1Public Mains10 2Public Mains + Generator20 3Public Mains + Generator + Solar30 4Hybrid (Public Mains + Generator + Solar + Others)40 Financial 1Subsidy20

21. Expected Benefits of the Operating Model 21 IMPACT! SUSTAINABILITY! Key Benefits of the New Operating Model Increased participation of Industry Operators Implementation of well planned and adaptable projects which suit a variety of ICT needs Availability of telecom infrastructure in unserved and underserved areas which provide a foundation for universal access A holistic approach to implement affordable and sustainable access projects in unserved and underserved areas

22. Conclusion We will like to obtain your comments/Inputs… 22