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Universal Service
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Agenda Key word Legislation Objectives & targeted areas NTRA role Current status Analysis Methodology of implementation Recommendations
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Key words Teledensity The number of total working telephones per hundred persons in the population. Teleaccessability The number of residential lines per 100 households. Universal Access Providing convenient and affordable access to communications (Voice & Data) through public facilities ( Pay phones, telecentres)
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Key words (contd.) Universal Service Long-term objective of making communications facilities available to every member of the society. Universal Service Fund ( USF) A public fund established to support communications development goals.
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Legislation Law No. 10/ 2003 Article 5 NTRA may take all actions required to set out criteria and regulations for non economic telecommunications services that should be provided for deprived area Article 9 NTRA’s fiscal year shall maintain a bank account to deposit its fund. NTRA’s annual budget surplus shall be carried forward to the telecommunication universal service fund
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Legislation (contd.) Article 25 Consideration of universal service requirements Article 26 If the cabinet establishes a price for one of these services that is less its approved economic cost. The service provider/operator shall be compensated for the difference from the universal service fund. In the case where the fund is in deficit. It shall be supported by the state based on proposal of the concerned Minister in consultation with the minister of finance.
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Objectives Equal access for rural users to quality telecommunications services that are comparable in price and scope. Promote national political, economic and cultural cohesion. To encourage more balanced distribution of the population.
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Targeted areas Expansion of services to remote or high cost areas and low income subscriber groups, where it is currently uneconomic to provide. Expansion of new access services, rather than support of existing services. Priority on public access services, rather than private household access. Directory enquiries Emergency, social schemes
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NTRA role Designing universal access policies, regulations. Create and manage USF. Adopting technologically neutral licensing practices. Adopting a framework of interconnection rates linked to costs. Reducing regulatory burdens to lower the costs of providing services to end users.
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Current status Geographic information Around one million square km. of these, only around 55 thousands square km (i.e. 5.5%) are populated. 27 Governorates. 200 Centers 4522 Villages.
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Current status (contd.) Population The Egyptian population was estimated at approximately 68.3 million.(1/7/2003 ). Population Growth Rate: 2.063% Avg. No. of Families: 14.5 Millions.
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Current status (contd.) Fixed Lines Total # of available lines 11.2 Millions. Total # of working lines 8.6 Millions. No. of Exchange 1500 Waiting List 106,000 subscribers.
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Current status (contd.) Payphone Service Mobile Service Total # of Cabinets 47,824 Total # of Subscribers 5,500000
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Current Teledensity & Teleaccessability Urban GovernoratesTeleaccessability
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Current Teledensity & Teleaccessability Delta GovernoratesTeleaccessability
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Current Teledensity & Teleaccessability Upper Egypt GovernoratesTeleaccessability
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Current Teledensity & Teleaccessability Frontier GovernoratesTeleaccessability
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Analysis Current Status Benchmarking Indicators Financial Technical Other Methodology of Implementation Phase One USO Phase Two USF
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Benchmarking Analysis Universality in Selected Developing and Transitional Economies CountryUniversal Access policyOperator Obligations Cuba Access to all villages and to communities of more than 500 inhabitants. License conditions stipulate by the end of the first 8-year program all villages of more than 500 inhabitants must have access. Iran Telephone facilities to all villages of more than 100 people. Expansion, service quality, interconnection and service to the elderly as part of license conditions. Kyrgyzstan A phone booth in every town ; a phone in every home. Expansion, service quality and interconnection contracted with the government. Mozambique A public telephone within distance of less than 5 km. At least one public telephone in each of the 144 district centers. Expansion, service quality and interconnection contracted with the government. PakistanA phone in every village.No obligations. Togo A telephone within a 5 km radius by 2010; a telephone in every administrative and economic center of importance Contract with the state to determine the objectives for development and plurality of service.
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Indicators Analysis Market Efficiency Gap. - The difference between the current service penetration and the achievable level of penetration in the liberalized market. - Can be minimized through a solid sector reform policy & USO. Access Gap - The difference between population without service and that with service- even under efficient market condition. - A portion of the population may simply not be able to afford market price. - Some cases can be solved with US Fund.
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Financial Analysis Basic revenue considerations: The thumb rule that an average of about 2.5% of per capita income is spent on telecommunications worldwide. Where the costs of providing telecommunications access is greater than 2.5% of local incomes, external subsidies may be required to promote UA. Funding mechanisms, such as a universal access fund, can be designed with this rule of thumb in mind. Local residents will generally be willing and able to pay about 2.5% of their incomes on telecommunications services, and the fund may be required to subsidize the rest of the costs
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Technical Analysis Usage of alternative solutions and technologies ONU (Optical Node Unit) Pair Gain System ( Multiplexed on twisted pair ) WLL ( Wireless Local Loop) “ cannot obtain ADSL on the same line) Satellite-Based Tech. ( Sofisat) 9k lines (22/8/2003 100k ) CDMA 2000 WLL (800/900/1900/200-2700MHz band 1.77MHz & Mobility) 100k + 100k planned S-CDMA WLL ( 2100-2700,3500 MHz band 3.5MHz) Point to Multipoint Radio (PMP) TE + SRT VoiP
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Tariff Interconnection Country GDP Awareness Urbanization Literacy rate Human Development Index Other factors in the analysis
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Methodology of Implementation.
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Methodology of implementation Phase One: USO & Commitments Coverage & Roll out USO No Yes Satisfy NTRA ’s NEO NEO : Network Expansion Obligations Define obligations
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Current Teledensity Egypt Governorates Teledenisty
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Teledensity =15 Egypt Governorates
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Total required lines = 3,768,910 Lines Lines Teledensity =15 Egypt Governorates
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Teledenisty Teledensity =10 Egypt Governorates
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Total required lines = 1,277,831 Lines Lines Teledensity =10 Egypt Governorates
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Methodology of implementation Phase One (Contd.) NTRA imposes mandatory service obligations on existing operators, as well as reasonable roll-out plans on newly licensed or newly privatized operators. Telecom Egypt as an Incumbent operator is committed to introduce the basic telephone services all over the country. Mobile operators are also committed with certain coverage plan.
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Methodology of implementation Phase Two USF & Tender Population Villages
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Methodology of implementation Phase Two (Contd.) Location Identification For each location, Two measures of net present value (NPV) are calculated: private and social. Projects that have a positive private NPV are excluded from the list. Projects with a positive private NPV are those capable of being financed solely from project revenues, without a government subsidy. NTRA then ranks the remaining projects (those with a negative private NPV) based on the relationship between social and private NPV. This formulation aims to maximize the social returns. A list of projects that are eligible for subsidies is then developed by NTRA. The projects are ranked based on the financial evaluation.
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Methodology of implementation Phase Two (Contd.) Competitive Bidding Process Once NTRA selects projects eligible for subsidy, NTRA prepares tender documents for a competitive bidding process. Tender documents for each project include the following information: The localities to be served by the project; The minimum quality of service to be provided; The applicable tariff regime (see further discussion above); The time period allowed for the installation of the public phones; The maximum subsidy available for the project; Available spectrum frequency bands Any other conditions.
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Methodology of implementation Phase Two (Contd.) Selection of Successful Bidders: For each project, the bidder that proposes the lowest subsidy is declared the winner. In some cases, no (zero) subsidy was required by the successful bidder. Licenses : The winning bidders must apply for a public telephone license. The Licenses are non-exclusive. The license includes the following information: Name and details of the holder of the concession (the “concessionaire”); Type of service to be offered; Duration of the concession; Geographic zone covered by the concession Technical specifications of the infrastructure to be installed; Deadlines for commencement and termination of installation; Technical specifications of radio stations, if any; Amount of subsidy awarded, if any Other conditions.
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Methodology of implementation Phase Two (Contd.) Implementation: Concessionaires must generally install the required public telephones within limited time. These public telephones must be capable of sending and receiving calls from other subscribers, including local and long distance calls. Once the infrastructure has been installed and verified by NTRA, the concessionaire receives the subsidy it is eligible for.
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Methodology of implementation Phase Two (Contd.) Features of a Good Universality Fund Independent administration : not related to telecommunications operators Transparent financing Market-neutral :does not favor incumbent operators or new entrants Funding targeted to specific beneficiaries (e.g. high cost regions, un-served rural areas, low income populations, educational & health sectors) Subsidies should not be allowed. Competitive bidding process for implementation of universality projects: i.e. lowest bidder should be awarded subsidy and right to build and operate networks to expand service
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