1. Why Universal Service Funds Fail?

2. 2 Parvez Iftikhar –Former CEO USF Pakistan –Founding CEO – therefore built it from scratch –Ran USF Pk. successfully for nearly 5 years –Now a consultant working in different countries of Asia and Africa for WB, ITU, ADB, CTO, and … USAID! My own Introduction

3. Most USFs considered ”failing”, as: 1/3rd of USFs have not disbursed any funds Almost no USF has disbursed everything collected Nearly US$ 12 Bln undisbursed! All figs. in Thousand US$ What does “USFs failing” mean? What does “USFs failing” mean? GSM Study 2013

4. One very important “cause of failure” that we will not discuss: At times Universal Service is a low Priority for Political Leadership Not necessarily bad intentioned! Disclaimer! Disclaimer!

5. Major Issues and Challenges relate to: PolicyLegislationGovernance ModelTrust CompetitionOperators’ Issues Broadband

6. Policy

7. Inflexible - with respect to changes, esp. changes in technology Funding allowance too restricted USF Levy on Operators: Has no Maximum Limit Is not easily adjustable Not fixed in consultation with stakeholders Legislation

8. Governance Model – an example 8 Nominee of Consumers Nominee of ISPs Nominee of Fixed- Line SPs Nominee of Cellular SPs Regulator Ministry: Chief Tech. Ministry: Secretary Minister CEO USF PUBLIC PRIVATE

9. ALL stakeholders on Board! Nominee Consumers Nominee ISPs Nominee Fixed-line Telcos Nominee Cellular Telcos Regulator Ministry: Chief Tech. Ministry: Secretary Minister Political Leadership Chief Bureaucrat Chief Technocrat Telecom Regulator Cellular Mobile Operators Fixed Line Operators Internet Service Providers Consumer Associations

10. To create trust – everything on website All Bidding Docs & Bidding Results collected disbursed balance Fund StatisticsApproved Projects & Progress Performance of Completed ProjectsObstacles & Challenges

11. Regularly At least Bi-Annually By Professional External Auditors Make Results Publicly Available To create trust – USF Own Audits!

12.  Keeps operators on their toes - benefits consumers!  Prevents creation of local monopolies with USF Money  To generate competition: Mandatory Infrastructure Sharing Passive Elements – site, tower, … Rural Telecom Access Dark-Pair sharing Optic Fiber Cables Competition!

13. Operators are normally reluctant!

14. Do not assume the Operators know all about USF - talk to them! Keep close liason’ Give only “Service” specs in Bids All interested get equal chances Tech. Neutral Efficient Deployment Innovation Sustainability Give Incentives USF is a “volunteer” exercise No “mandating” Ensuring Operators’ Involvement - 1/2

15. Use whatever Influence USF can manage within the government/s Right-of-Way’ Make Renewable Energy mandatory Sustainability Optic Fiber Cables! Backhaul Work is normally in very difficult areas/conditions Be mindful! Ensuring Operators’ Involvement – 2/2

16. Important: Use USF for Broadband! Supply Demand No Broadband uptake unless both sides are addressed Voice is now everywhere, it is Broadband age!

17. USF must help to make Broadband: Available Coverage Accessible Public Access Points Affordable Low Cost Usable - Language, - Digital Literacy Relevant - Professions, - Interests

18. Independent Organisational Structure Facilitate Operators Technology Neutral Participatory Management Trustworthy with Transparent Processes Ensure Competition Clear & Fair PolicyRobust Legal Framework Summarising Go for Broadband – don’t forget Demand side!

19. This is not the end of the Causes (each country has more of it’s own) But it’s the end of my Presentation!!! THANK YOU parvez@piftikhar.com