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Southeastern Europe Telecommunications & Informatics Research Institute
Southeastern Europe Southeastern Europe Telecommunications & Informatics Telecommunications & Informatics
Research InstituteResearch Institute
Broadband Penetration in LessBroadband Penetration in LessDeveloped Areas:Developed Areas:
The Case of SEE CountriesThe Case of SEE Countries
Dr. P. AngelidisDr. P. Angelidis
Southeastern Europe Telecommunications & Informatics Research Institute
Research and Analysis of the Telecommunications market in Southeastern Europe.Overview of the current ICT Infrastructure in Southeastern Europe.Market research of the current demand on Telecommunications and Informatics services as well as estimation of future trends.Studies on behalf of local and interregional actors.Identification of the investment opportunities on telecom services, products and equipment. Organization of workshops, congresses, scientific events and conferences on Telecommunications and Informatics issues.Guidance and information on funding opportunities from the EU and other international bodies for the development of ICT in Southeastern Europe.
Southeastern Europe Telecommunications Southeastern Europe Telecommunications
& Informatics Research Institute (INA)& Informatics Research Institute (INA) a private sector initiativea private sector initiative
Southeastern Europe Telecommunications & Informatics Research Institute
CollaborationsCollaborations
Southeastern Europe Telecommunications & Informatics Research Institute
Sofia NodeSofia Node
Belgrade NodeBelgrade Node
INA Academy ThessalonikiINA Academy Thessaloniki
INA Academy Nodes in SEE INA Academy Nodes in SEE
Tirana NodeTirana Node
Sarajevo NodeSarajevo Node
Bucharest NodeBucharest Node
Skopje NodeSkopje Node
Podgoritsa NodePodgoritsa Node
Southeastern Europe Telecommunications & Informatics Research Institute
Broadband FactsBroadband Facts Always-on connectionsAlways-on connections
Voice and data on one lineVoice and data on one line
High speeds resulting in wide range of High speeds resulting in wide range of applicationsapplications
Advanced (multimedia) applications / increased Advanced (multimedia) applications / increased productivityproductivity
Upgrading networks and equipment resulting in Upgrading networks and equipment resulting in high investment costshigh investment costs
Various technology optionsVarious technology options
Southeastern Europe Telecommunications & Informatics Research Institute
Broadband & ContentBroadband & Content It is believed that content is needed for the development of It is believed that content is needed for the development of
broadband networksbroadband networks However, broadband and content are interrelatedHowever, broadband and content are interrelated Demand for broadband deployment already exists due to:Demand for broadband deployment already exists due to:
Reduction of product costs and increase of productivityReduction of product costs and increase of productivity Minimizing distances for remote businessesMinimizing distances for remote businesses Effectiveness of public and private Internet servicesEffectiveness of public and private Internet services Facilitation of content creation and better exploitation of on-Facilitation of content creation and better exploitation of on-
line timeline time
Content creation will increase demand for broadband Content creation will increase demand for broadband through:through: Creation of applications for public on-line services that will Creation of applications for public on-line services that will
reduce the time wasted in public officesreduce the time wasted in public offices Creation of applications for efficient B2B interactionsCreation of applications for efficient B2B interactions Entertainment, gaming, traveling and cultural applications Entertainment, gaming, traveling and cultural applications
involving video and audio streams, even virtual reality toursinvolving video and audio streams, even virtual reality tours
Southeastern Europe Telecommunications & Informatics Research Institute
Broadband & Content +Broadband & Content +
INA has shown that the important thing is availability: INA has shown that the important thing is availability:
once it is there people will use it!once it is there people will use it!
Investment incentives are needed: Investment incentives are needed: PPPs offer the PPPs offer the only(?) viable solutiononly(?) viable solution
(P. Angelidis “To b(roadband) or not to b(roadband)”, eStrategies Feb. 2005 pp. 70 - 73)(P. Angelidis “To b(roadband) or not to b(roadband)”, eStrategies Feb. 2005 pp. 70 - 73)
Southeastern Europe Telecommunications & Informatics Research Institute
South East Europe TodaySouth East Europe Today
• Lacking information society development due to political, Lacking information society development due to political, economical and social instabilitieseconomical and social instabilities
• Digital divide not only on international level but also within Digital divide not only on international level but also within the countries (e.g. Urban/Rural)the countries (e.g. Urban/Rural)
• Gradual realization of ICT importance for developmentsGradual realization of ICT importance for developments• Promoting Information Society will transform SEE Promoting Information Society will transform SEE
countries:countries:– From small, fragmented, unattractive marketsFrom small, fragmented, unattractive markets
– Into developing, competitive and open fields attractive to Into developing, competitive and open fields attractive to foreign investmentsforeign investments
– And finally lead them to development and EU membershipAnd finally lead them to development and EU membership
Southeastern Europe Telecommunications & Informatics Research Institute
Broadband Facts for South East EuropeBroadband Facts for South East Europe
Very low deploymentVery low deployment Urban deploymentUrban deployment Inadequate regulationInadequate regulation ExpensiveExpensive Need for big infrastructure investments Need for big infrastructure investments
(digital divide)(digital divide) Lack of “bandwidth-hungry” e-applicationsLack of “bandwidth-hungry” e-applications
Southeastern Europe Telecommunications & Informatics Research Institute
Broadband in South East EuropeBroadband in South East Europe
o Broadband penetration is Broadband penetration is lower than 2% in most of the lower than 2% in most of the countries.countries.
o In countries with the widest In countries with the widest broadband deployment like DSL broadband deployment like DSL is the prevalent technology.is the prevalent technology.
Southeastern Europe Telecommunications & Informatics Research Institute
Rural Deployment FactsRural Deployment Facts
Low Internet penetration and demandLow Internet penetration and demand DSL technology would require replacement of all DSL technology would require replacement of all
bad quality linesbad quality lines Lack of incentives for operators to deploy Lack of incentives for operators to deploy
broadband in rural areasbroadband in rural areas Big investment is required, long-term and Big investment is required, long-term and
uncertain ROIuncertain ROIDecentralization via increased competitiveness Decentralization via increased competitiveness
of rural businesses (including SMEs)of rural businesses (including SMEs)Bridging the digital divide for rural and urban Bridging the digital divide for rural and urban
individual usersindividual users
Southeastern Europe Telecommunications & Informatics Research Institute
Root Causes of Digital DivideRoot Causes of Digital Divide Monthly Costs per Subscriber as Function of Population Density Monthly Costs per Subscriber as Function of Population Density for all Current Broadband Access Technologies Including Hybrid for all Current Broadband Access Technologies Including Hybrid Wi-Fi solutionsWi-Fi solutions
0
50
100
150
200
250
300
1 10 100 1000 10000 100000
Sites per square km
Eur
o pe
r su
bscr
iber
per
mon
th
DSL FWA CableWi-Fi + Leased Line Backhaul Wi-Fi + FWA Backhaul Wi-Fi + Satellite Backhaul
All current access technologies unviable
Southeastern Europe Telecommunications & Informatics Research Institute
Broadband Wireline TechnologiesBroadband Wireline Technologies DSL and cable broadband are uneconomical for low density population DSL and cable broadband are uneconomical for low density population
regionsregions Copper reserves are not enough! (in this world)Copper reserves are not enough! (in this world)
0
50
100
150
200
250
300
1 10 100 1000 10000 100000
Sites per square km
Eu
ro p
er
sub
scri
be
r p
er
mo
nth
DSL Cable
DSL unviable
Cable Broadband unviable
Southeastern Europe Telecommunications & Informatics Research Institute
Where are the Unserved?Where are the Unserved?
Distribution of Distribution of European European
households by class households by class ofof
DensityDensity
eEurope Advisory Group 29 eEurope Advisory Group 29 June 2004June 2004
Southeastern Europe Telecommunications & Informatics Research Institute
Cost ComparisonCost ComparisonComparison of All broadband Access Technologies Total Monthly Comparison of All broadband Access Technologies Total Monthly
Costs per SubscriberCosts per Subscriber
0
50
100
150
200
250
300
1 10 100 1000 10000 100000
Sites per square km
Eur
o pe
r sub
scrib
er p
er m
onth
DSL FWA CableWi-Fi + Leased Line Backhaul Wi-Fi + FWA Backhaul Wi-Fi + Satellite BackhaulSatellite 1m subscribers Satellite Today
Only satellite is viable
Southeastern Europe Telecommunications & Informatics Research Institute
Technology Assessment for Rural DeploymentTechnology Assessment for Rural DeploymentCostCost Data Data
RatesRatesQuality Quality
GuaranteeGuaranteeSecuritySecurity License License
RequiredRequiredRequire-Require-
mentsments
ADSLADSL MediumMedium HighHigh HighHigh HighHigh YesYes --
CableCable Very Very HighHigh
Very Very HighHigh
LowLow LowLow YesYes --
LMDSLMDS MediumMedium Very Very HighHigh
LowLow LowLow YesYes LoSLoS
Wi-FiWi-Fi LowLow HighHigh ?? MediumMedium NoNo LoSLoS
WiMaxWiMax LowLow Very Very HighHigh
HighHigh MediumMedium Yes/NoYes/No --
ADSL ADSL ReachReach
LowLow HighHigh HighHigh HighHigh YesYes --
UMTSUMTS HighHigh HighHigh HighHigh MediumMedium YesYes --
SatelliteSatellite Very Very HighHigh
Very Very HighHigh
HighHigh HighHigh YesYes --
Southeastern Europe Telecommunications & Informatics Research Institute
Broadband Deployment Action Plan for Underserved (Rural) Areas
Regulatory authority and government incentive Regulatory authority and government incentive provision to operatorsprovision to operators
Separate environmental and geographical Separate environmental and geographical assessment for each rural areaassessment for each rural area
Technology assessmentTechnology assessment Backbone network expansionBackbone network expansion Installation on demandInstallation on demand Combine installation with wide offering of Combine installation with wide offering of
servicesservices Appropriate targeting following market analysisAppropriate targeting following market analysis Operator alliances and cooperationOperator alliances and cooperation
Southeastern Europe Telecommunications & Informatics Research Institute
What we miss
for governments an action plan for broadband for governments an action plan for broadband deployment based on:deployment based on: Case-by-case assessment of needsCase-by-case assessment of needs Technology evaluationTechnology evaluation Regulatory reform needsRegulatory reform needs Incentive creationIncentive creation
for operators an action plan for broadband for operators an action plan for broadband deployment based on:deployment based on: Investment plan based on most economical technology Investment plan based on most economical technology
for each casefor each case Cost analysisCost analysis Short-term ROIShort-term ROI
Southeastern Europe Telecommunications & Informatics Research Institute
Kick-off Meeting for “bSEE” WORKSHOP ON TELECOMMUNICATIONS
10th THESSALONIKI FORUM 24-25 of May 2004
Representatives from Governments, Industry and NGOs from SE Europe participated at the 10th Thessaloniki Forum Workshop on the Telecom Sector and
Emphasized the need to realize:
“…The leapfrogging potential of electronic communication services for countries under development [like SE Europe countries]…”
Southeastern Europe Telecommunications & Informatics Research Institute
How to act?How to act?SEE Countries need to act:SEE Countries need to act:
Immediately, to address the gap between Immediately, to address the gap between developed and underdeveloped countriesdeveloped and underdeveloped countries
Decisively, to change thinking and Decisively, to change thinking and attributesattributes
Cooperatively, to leverage advantagesCooperatively, to leverage advantagesIngeniously, to leapfrog technologically Ingeniously, to leapfrog technologically
SEE Countries need to capitalize on ICT potential and SEE Countries need to capitalize on ICT potential and their rich human capital in order to attract foreign their rich human capital in order to attract foreign investment and exploit new technological investment and exploit new technological opportunitiesopportunities
Southeastern Europe Telecommunications & Informatics Research Institute
‘‘bSEE’ (pronounced beezy)bSEE’ (pronounced beezy)ConceptConcept
“bSEE”’ s aim is:
a. The coordination of policies;
b. The interconnection of networks for the deployment of Broadband services at a regional level on a coherent to the European Union manner.
This will be realized with the formulation of a Memorandum of Understanding (MoU) that will be signed by the countries of the region, the Stability Pact and (potentially) the European Commission, and a Task Force that will coordinate the actions for the implementation of the MoU.
Southeastern Europe Telecommunications & Informatics Research Institute
Best Practice from the Energy Sector The Commission brought forward proposals for the creation of a
regional electricity market in South East Europe (SEE) in March 2002 with the aim of eventually creating a regional energy market
By November 2002, a Memorandum of Understanding (“The Athens Memorandum”) was signed at the Athens Ministerial by all the countries with the Commission and the Stability Pact acting as sponsors
Creation of Energy Association of SEE Countries by End of 2004
The Athens Memorandum of Understanding for Energy and the “South Eastern Europe Regional Energy Market” initiative represent an excellent such precedent and a best practice to repeat in the ICT sector
Southeastern Europe Telecommunications & Informatics Research Institute
‘‘bSEE’ MoU ScopebSEE’ MoU ScopeA unified broadband market fully interconnected to the European and Global networks, a world model capitalizing on
Human Resource Development - Human Capital
Modern Electronic Communication Technologies
Excellence in Research
Regulatory Framework Competence
Southeastern Europe Telecommunications & Informatics Research Institute
‘‘bSEE’ MoUbSEE’ MoU “bSEE” will outline a strategy for the progressive creation of an
integrated regional market for broadband in South Eastern Europe. Improving the supply of broadband and stimulating the demand is crucial to improve and sustain economic development in South East Europe
“bSEE” requires a strong commitment by the countries of the region towards market oriented reforms, regional integration and sustainable development
“bSEE” will offer significant advantages both in terms of improved utilization of existing infrastructure and human capital capacities, but also in fostering more cooperation and integration in the region, which will result in economic growth, stability and investment
Southeastern Europe Telecommunications & Informatics Research Institute
A SE Europe “bSEE” Task Force shall be set up to identify and facilitate programs for the purpose of:
a. Setting statutory and regulatory objectives and frameworks with respect to European Union Directives and global standards;
b. Aggregating demand leading to broadband development;c. Evaluating of broadband technologies and international
best practices;d. Developing skills through exchange programs, and
through joint sponsorship of conferences, training programs and seminars in the field of Broadband technologies;
‘‘bSEE’ Implementation (1/2)bSEE’ Implementation (1/2)
Southeastern Europe Telecommunications & Informatics Research Institute
‘‘bSEE’ Implementation (2/2)bSEE’ Implementation (2/2)e. Prompting planned activities regarding broadband
investment that would result in building awareness, increasing level of public interest and empowering SME’s to participate in such initiatives;
f. Addressing market failures that are beyond the reach of policy tools;
g. Providing incentives to the private sector for broadband development, especially in rural and remote areas; and
h. Monitoring progress and producing timely reports
Southeastern Europe Telecommunications & Informatics Research Institute
‘‘bSEE’ Task Force Key FunctionsbSEE’ Task Force Key Functions
Monitoring Broadband Development in SE Europe; Networking all actors involved in broadband
development in SE Europe; Harmonization of the region with the EU and global
standards; Promoting and increasing Broadband connectivity in SE
Europe;creating attractive investment environment Joint development of interactive broadband multimedia
content, information security and e-Government; and Facilitating the development, interaction and exchange
of know-how between SE Europe countries and the EU
Southeastern Europe Telecommunications & Informatics Research Institute
‘‘bSEE’ key issuesbSEE’ key issues
Stability Pact and European Commission support
National Governments active involvement and commitment
Identification of financingCreation of Momentum
Southeastern Europe Telecommunications & Informatics Research Institute
‘‘bSEE’ BenchmarksbSEE’ Benchmarks(currently under review)(currently under review)
Benchmark 1: Increase broadband penetration at growth rates high enough to narrow the broadband “divide”
Benchmark 2: Recognize the qualitative importance of broadband as a crosscutting productivity tool
Benchmark 3: Mobilize more effectively relative strengths in human resources for broadband deployment
Benchmark 4: Increase the rate of creation and diffusion of ICT in the region as a source of value added and productivity
Benchmark 5: Establish a set of common broadband policy commitments reflecting the diversity of broadband infrastructure in SE Europe
Benchmark 6: Reinforce the institutional capabilities for designing, delivering and evaluating ICT policy in regard to broadband
Southeastern Europe Telecommunications & Informatics Research Institute
‘‘bSEE’ Latest DevelopmentsbSEE’ Latest Developments
• Special Coordinator of the Stability Pact Dr. Erhard Busek welcomes the idea
• Officially adopted by the Greek Government• European Commission have expressed their support• Thessaloniki 30 June / 1 July regional conference at a ministerial level
where bSEE MoU will be signed and Task Force will be formed• CLDP is financing a report on “National Strategy for Broadband”; results
expected by September will set the path for bSEE and the countries• UNDP/INA will further focus their ongoing work on PPP schemes for ICT on
broadband • EBRD expressed willingness to co-finance broadband projects in the region• WorldBank reported plans on financing broadband projects in the region
Southeastern Europe Telecommunications & Informatics Research Institute
Goal: Europe “to become the most competitive and
dynamic knowledge –based economy in the world” (Lisbon, March 2000)
Europe as a whole and not only part of it
Telecommunications without national borders
Southeastern Europe Telecommunications & Informatics Research Institute
Let’s get “bSEE”!!!
Thank you for your attention
www.inatelecom.orgwww.inatelecom.org