Access to E-communications in remote & rural areas - the case of Lithuania

Presentation by Dr Frans van der Zee (ECORYS-NL)

IDELE Seminar, Rovaniemi, 16 September 2004

World Bank

• Ongoing project, final stage• World Bank publication

– In book form: expected autumn 2004– In pdf: Website World Bank CITPO-division Oct2004

Objective:• Identifying best practice options for improving

access to electronic communications• Focus on underserved areas… • … typically found in rural and remote areas

Results from a World Bank study byECORYS & TNO (NL)

Objective of Best practices study…

• How to define underserved areas?

• How to choose between types of electronic communications?

• How to organise improved access?

• How to use Structural Funds?

Importance of improved E-access?

• ‘Vehicle’ for modernisation & development– Connecting people & businesses in the area

– Connecting to the ‘outside’ world

– Economic, social and quality-of-life impact

– Marketing & selling products & services

– Information, promotion & publicity

– Training (distance learning)

– Closing the widening geographic ‘digital divide’

• E-access is ‘a means, not an end in itself’

EU Structural Funds & E-access?

“(…) The risk of a widening ‘digital divide’ and its economic consequences, e.g. the delocalisation of economic activities……to explore new solutions to encourage the deployment of broadband infrastructure in less favoured areas. … geographical isolation and low density of population can make the cost of upgrading the existing infrastructure unsustainable. … the unavailability of adequate infrastructure is an important obstacle for the development of certain economic activities and a source of social disparities.”

Lithuania E-readiness 2004

5.35

2.76

7.105.37 5.79 6.75 5.75

02468

Overallranking

Connectivity Businessenvironment

Consumer &businessadoption

Legal &policy

Social &cultural

environment

Supportinge-services

Ranking factors

Source: Economist Intelligence Unit

Lithuania - Public sector investment in the knowledge economy, mEUR

7,5 9,5

23,530

42 46

0

15

30

45

60

1999 2000 2001 2002 2003 2004

EU funds

State budget

Internet access in Lithuania

Public access– PIAPs in municipal centres, libraries, schools…

(free access – rural & remote areas)– Internet cafes (paid access – cities & towns)

Private households: 7.7% has Internet – urban areas 11.7%, rural areas 0.8%

Firms: 67% connected to the internet– Large firms almost all, SMEs lag behind– Small firms & farms (<10 employees) not counted &

mostly not connected!

Improving E-access – problems?

Public access– Access to PIAPs is limited – subscribe in advance

(waiting lists) & only simple e-mail and web access (no printing facilities)

– Access to internet cafes – limited to cities & towns

Private access – Expensive: Access charges & daily access cost

– Computer-literacy: training!

– Availability computers: Only 19.9% has a PC; in urban areas 27.4%, in rural areas 6.8%

Related to general problems in remote & rural areas – vicious circle?

• Low household income levels

• Widening gap with rest of the country

• Traditional forms of employment: largely semi-subsistence farming, some commercial farming, woodworking, linen industries,…

• How to keep the talented and how to keep the balance with pensioners?

How to improve E-access?

• Improved E-access is more than just stretching broadband infrastructure (‘fiber to the home’)

• Supporting demand vital! – Access support – Equity for least favoured users

through cost subsidies or regulatory options – Further develop E-content / E-services– Access investment - From PIAPs to enterprise

centres?

• Whether or not broadband?

Defining broadband in terms of service categories…

• narrowband services – e.g. voice, e-mail, transaction services

• broadband services – e.g. multimedia, entertainment, advanced corporate services

• super broadband services – high definition multimedia, bio-information, ubiquitous intelligence

Broadband Migration Paths

Rem

oteR

uralS

mall

Urban

Rural

Large

Urban

An

alo

gu

e Sys

tem

s

Dig

ital Narro

wb

and

Fix

ed B

road

ban

d (D

SL

, Cab

le)

Wirele

ss B

road

ban

d (3

G, W

LL

, Satellite)

Su

per B

road

ban

d (F

TT

H)

Voice Communication

On-line Commerce and Transactions

Corporate Services

Multimedia Communication and Messaging

Multimedia Information and Entertainment

Advanced Commerce and Corporate Services

Messaging and Community Services

Simple Webbrowsing

Super Broadband Services

Evo

lutio

n o

f Cab

le, DS

L, an

d W

LL

tech

no

log

ies

Lessons & conclusions …

• Getting the organisational capacity right:– One champion, clear responsibilities – Needed at central and regional level– Provide an adequate regional structure and try to ‘cluster’ demand

local level– Define national & regional broadband strategies

• Demand-driven & supply-coordinated• Concentrate Structural Funds on ‘real’ rural & remote areas• Remember: internet is a tool, not an end in itself

Thank you all for your attention

Further information:

•oncoming WB publications (paper & web)

•frans.vanderzee@ecorys.com

The use of EU Structural Funds

Co-financing - conditionalities:– Underserved areas / geographical divide

– State aid framework applies

– Technological neutral & open access

– Regional ICT strategy

Central Government

ICT Industry

Regiona/local authorities

The broadband

policy arena

What is broadband?

• No standard definition of broadband• Can be defined in terms of service requirements

as well as technology• Most common services individually are

narrowband• Broadband demand is linked to business

models…– of electronic equipment, infrastructure and service

providers– of commercial and public service users who add value

• Need for model coordination in order for demand to develop

Costs of improved E-access

Related to network architecture

• access element

• backhaul element

Dependent on distances and user numbers

Possible solutions:

• Influence service and pricing regulation

• Introduce new, lower cost technological options (mobile, WISP)

• unit costs vs % of total investment costs

E-access initiatives Lithuania so far

• Mostly private initiatives, joined by govt.: – PIAPs in municipal centres, libraries,

schools… (‘Window to the Future’ alliance)

– … training, workshops, publicity

• Public involvement:– E-content, E-government, broadband

strategy

– Pilot investment SF-project - nature reserve Neringa (near Kalingrad)