National and regional level business models
From ApcAccess
National and Regional Level Business Models About 13 participants
Chair: Muriuki Biz models at regional and international levels – how to do this? Highlights research paper again
NOTE: See power point presentation slide (same file as earlier presentation in AM session)
Biz models for fibre Three options
- Option 1: commercially/privately provisioned model – purely commercial basis with the aim of maximizing profit within the shortest possible time
- Option 2: partly commercial (consortium) model – consortium of operators seeks funds and build a fibre and thereafter, retain the privilege of independently deciding who connects and at what rate per month. From the experience, monthly rates charged very high compared developed economies. A typical example is SAT3 Cable.
- Option 3: open access model (or utility model or access model, e.g one electricity line, or one sewage pipe) – premised on the argument that socio-economic development hangs on the availability of cheap bandwidth, easy entry and at money is made not on the fibre but downstream. Foresees a low-cost, high volume biz model for the cable.
So many types of alternatives to the first two. NOTE: Participants already started discussing.
Michel Lambert, Alternatives, Canada
Background: Did feasibility study in DRC. Multi-country consultation initiative by APC. Research launched. DRC govt receiving offers from potential partners. Meeting with potential partners from in the Congo, e.g. national operators of cellular phones, many international partners. Use definition of infoDev, because understanding “open access” is not so clear. Reality, most likely end up with Option 2 model, to be not too creative and not too transparent.
NOTE: Did not pass presentation, but seemed to refer to his laptop a lot.
Parminder Jeet Singh, ITforChange, India
3 facts to go out of the limits of the structure for the discussion
1. Only 1% of India’s fibre infrastructure is being used. 2. Fibre runs through all villages 3. Went back to village, tried dial-up, could do video conferencing. Told people, there’s internet. Nobody thinks anything of internet although there is internet.
What are the reasons for driving the fibre? Social devt is not happening. There are no systems for starting interest and use.
ICT4D encompass two very different issues
- access – hardware, software
- but what do the community do with this? Do they make health systems, local clubs join and get connected with govt? Whether the fibre is needed?
Easy to provide lots of connectivity. But what is the use? Telecentres, women develop videos. They collect the info on the status, and challenge govt. But take a long time to develop. In developing this system, there are externalities. No individual is going to pay for this system. Because it’s a public info system. It’s a public good and this argument becomes very relevant.
Fibre cheaper than any other infrastructure known (dam, etc.) 60% of the cost of the fibre is digging and closing the pit. Labour is cheap in India. People are waiting for biz models. If you’re not using words like biz model and sustainaibility, you’re wrong.
Why are telecentres different from public info system models? Why do we ask about revenue models for telecentres?
Mike Jensen
NOTE: See open office presentation slides for most info/key points.
Spoke on needs for fibre deployment (first slide)
A single satellite can only provide 1% of the capacity of one single fibre. And internet traffic is very heavy even for the smallest country.
But practical purposes, need two fibre links in case one goes down.
Won’t go below USD25,000 per km.
How much traffic must be known in order to effectively reduce pricing/costs.
Open Access Network cables automatically nullifies the gateway licences.
There needs to be some kind of grant funding to connect isolated islands, with small popoulations whose internet traffic will not justify the cost of USD30 to USD40 million of laying a cable.
CLARIFICATION
Graham: Was the company going to use power lines or laying fibre? (Michel) How long does it take to lay a cable that length? (Mike)
Karel: Also about the cable, why such a long journey through the sea rather than the over land?
Participant: Measuring universal access?
Michel: Just to respond to the hybrid factor in the study for DRC. The idea was they should be in partnership so that not need to use river. Also studied the potential demand, calculating bib biz, and other agencies, and who has computers, etc., we came to almost non-scientific conclusion that 90% of people not covered. The word internet does not exist in ???
Mike: Only three cable companies. Quite a lot of consolidation. Issues also concern hurricane seasons, or between two rocks because fibre may graze and wear out.
Cheaper to extend transmission through the sea rather than over land.
On the political imperative on universal access. Some countries appreciate the need, and more and more do so. Definition of village, easier in northern countries. More spread out in Africa.
Parminder: Need to clarify. Distinction between Asia and Africa, especially the case of India. Governments are not that strong in Africa. Govt of India, some failures but also some successes. Citizenship participation is strong and a lot of people are working on strengthening this.
For whom you’re doing, defines why. The political imperative for universal access dependent on systems building, demand aspect. Productivity does not change when systems change. As communities appropriate technology, then the uses start and the demand starts. Public good argument. We push education for example, nobody demanded for it. Govt pushed it. These are systems that we generally know that are useful. You can’t look for demand. Have to create enabling conditions. And therefore, has implications on policy.
All public goods have two dimensions – the public good and the demand dimension.
DISCUSSION
Mike: One key issue is the cost when the demand argument is used. And if the demand cannot be generated, what happens to the population concerned. It has to be an act of faith, especially if the infrastructure does not yet exist. Market research is on current users, and so the cost-benefit estimates would be way off in accuracy and forecast.
Ian Peter: Keep wanting to pull this back to, we tend to think that if we have connectivity, that it’s a tool. Should think of it as a prerequisite. It’s not about demand, but societal development. People who do not have access, don’t have the human rights that others can claim and have access to.
Parminder: Mobile phones does not have content systems. Someone has to invest in the systems. Privatisation made mobile phones successful, but does that mean that privatization is the solution?
Participant: Can we conceptualise what can be free as a public good?
Mike: The telecom sector is not just one market. The model of roads / road-building is probably the most appropriate reflection in relation to provision of ICT infrastructure.
Parminder: Primary education is recognized as a right, but not adult education.
Ian Peter: The basic standard should be fibre to every footpath.
Mike: Communities are putting fibre to the curb.
Parminder: We use the citizenship framework, not the consumer framework. The consumer has a choice to use or not use a service, and they are not involved in the development of these services or the management of these. The telecentre talked about are appropriating technology. They’re using it to document their real situations, problems and challenge govts. E.g. health data and monitoring health status and whether action was taken up by govt. But the enabling environment must be there.
Graham: Some consumers are able to articulate ??? E.g. banks, have networks separatefrom others. They lay fibre too. Some of these companies do research on where it is easier to lay fibre, where to place their data centres. Is there some way we can learn how to do this too? Don’t know how.
