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					Southeastern Europe Telecommunications & Informatics Research Institute




            Southeastern Europe
      Telecommunications & Informatics
             Research Institute

            Broadband Penetration in Less
                  Developed Areas:
              The Case of SEE Countries

                        Dr. P. Angelidis
Southeastern Europe Telecommunications & Informatics Research Institute

         Southeastern Europe Telecommunications
           & Informatics Research Institute (INA)
                   a private sector initiative
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 & Informatics Research Institute


                      Collaborations
Southeastern Europe Telecommunications & Informatics Research Institute

                         INA Academy Nodes in SEE


         Belgrade Node
                                                        Bucharest Node



   Sarajevo Node




                                                            Sofia Node
  Podgoritsa Node




                                                     INA Academy Thessaloniki

     Tirana Node                 Skopje Node
Southeastern Europe Telecommunications & Informatics Research Institute


                     Broadband Facts
     Always-on connections
     Voice and data on one line
     High speeds resulting in wide range of
      applications
     Advanced (multimedia) applications / increased
      productivity
     Upgrading networks and equipment resulting in
      high investment costs
     Various technology options
Southeastern Europe Telecommunications & Informatics Research Institute

                     Broadband & Content
   It is believed that content is needed for the development of
    broadband networks
   However, broadband and content are interrelated
   Demand for broadband deployment already exists due to:
         Reduction of product costs and increase of productivity
         Minimizing distances for remote businesses
         Effectiveness of public and private Internet services
         Facilitation of content creation and better exploitation of on-
          line time
   Content creation will increase demand for broadband
    through:
       Creation of applications for public on-line services that will
        reduce the time wasted in public offices
       Creation of applications for efficient B2B interactions
       Entertainment, gaming, traveling and cultural applications
        involving video and audio streams, even virtual reality tours
Southeastern Europe Telecommunications & Informatics Research Institute



                            Broadband & Content +


  INA has shown that the important thing is availability:
     once it is there people will use it!

  Investment incentives are needed: PPPs offer the
     only(?) viable solution
 (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 Today

  • Lacking information society development due to political,
    economical and social instabilities
  • Digital divide not only on international level but also within
    the countries (e.g. Urban/Rural)
  • Gradual realization of ICT importance for developments
  • Promoting Information Society will transform SEE
    countries:
      – From small, fragmented, unattractive markets
      – Into developing, competitive and open fields attractive to
        foreign investments
      – And finally lead them to development and EU membership
Southeastern Europe Telecommunications & Informatics Research Institute


      Broadband Facts for South East Europe

   Very low deployment
   Urban deployment
   Inadequate regulation
   Expensive
   Need for big infrastructure investments
    (digital divide)
   Lack of “bandwidth-hungry” e-applications
Southeastern Europe Telecommunications & Informatics Research Institute

           Broadband in South East Europe



                                  o Broadband  penetration is
                                  lower than 2% in most of the
                                  countries.
                                  o In countries with the widest
                                  broadband deployment like DSL
                                  is the prevalent technology.
Southeastern Europe Telecommunications & Informatics Research Institute


                  Rural Deployment Facts
   Low Internet penetration and demand
   DSL technology would require replacement of all
    bad quality lines
   Lack of incentives for operators to deploy
    broadband in rural areas
   Big investment is required, long-term and
    uncertain ROI
     Decentralization via increased competitiveness
       of rural businesses (including SMEs)
     Bridging the digital divide for rural and urban
       individual users
Southeastern Europe Telecommunications & Informatics Research Institute

                                                 Root Causes of Digital Divide
  Monthly Costs per Subscriber as Function of Population Density
 for all Current Broadband Access Technologies Including Hybrid
 Wi-Fi solutions
                                  300
  Euro per subscriber per month




                                  250

                                  200

                                  150

                                  100

                                  50
                                              All current access
                                              technologies unviable
                                   0
                                        1               10                100                1000          10000             100000
                                                                           Sites per square km
                                    DSL                               FWA                           Cable
                                    Wi-Fi + Leased Line Backhaul      Wi-Fi + FWA Backhaul          Wi-Fi + Satellite Backhaul
Southeastern Europe Telecommunications & Informatics Research Institute

                                           Broadband Wireline Technologies
 DSL and cable broadband are uneconomical for low density population
  regions
 Copper reserves are not enough! (in this world)

                                     300
     Euro per subscriber per month




                                     250


                                     200

                                     150

                                     100
                                                              Cable Broadband unviable
                                      50
                                               DSL unviable
                                       0
                                           1            10            100                1000   10000   100000
                                                                       Sites per square km

                                                                            DSL     Cable
Southeastern Europe Telecommunications & Informatics Research Institute

                 Where are the Unserved?


                                               Distribution of
                                                 European
                                             households by class
                                                      of
                                                  Density

                                             eEurope Advisory Group 29
                                                    June 2004
Southeastern Europe Telecommunications & Informatics Research Institute

                                                                        Cost Comparison
  Comparison of All broadband Access Technologies Total Monthly
                       Costs per Subscriber
                                  300
  Euro per subscriber per month




                                  250

                                  200

                                  150

                                  100

                                   50
                                             Only satellite is viable

                                    0
                                        1                   10               100              1000        10000             100000
                                                                              Sites per square km

                                   DSL                                    FWA                        Cable
                                   Wi-Fi + Leased Line Backhaul           Wi-Fi + FWA Backhaul       Wi-Fi + Satellite Backhaul
                                   Satellite 1m subscribers               Satellite Today
Southeastern Europe Telecommunications & Informatics Research Institute

      Technology Assessment for Rural Deployment
              Cost    Data      Quality    Security   License    Require-
                               Guarantee              Required    ments
                      Rates

 ADSL        Medium    High      High       High        Yes         -
 Cable        Very     Very      Low        Low         Yes         -
              High     High
 LMDS        Medium    Very      Low        Low         Yes       LoS
                       High
 Wi-Fi        Low      High       ?        Medium       No        LoS
 WiMax        Low      Very      High      Medium     Yes/No        -
                       High
 ADSL         Low      High      High       High        Yes         -
 Reach
 UMTS         High     High      High      Medium       Yes         -
 Satellite    Very     Very      High       High        Yes         -
              High     High
Southeastern Europe Telecommunications & Informatics Research Institute

      Broadband Deployment Action Plan for
           Underserved (Rural) Areas
   Regulatory authority and government incentive
      provision to operators
     Separate environmental and geographical
      assessment for each rural area
     Technology assessment
     Backbone network expansion
     Installation on demand
     Combine installation with wide offering of
      services
     Appropriate targeting following market analysis
     Operator alliances and cooperation
Southeastern Europe Telecommunications & Informatics Research Institute


                         What we miss
   for governments an action plan for broadband
     deployment based on:
       Case-by-case assessment of needs
       Technology evaluation
       Regulatory reform needs
       Incentive creation
   for operators an action plan for broadband
     deployment based on:
       Investment plan based on most economical technology
        for each case
       Cost analysis
       Short-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?
          SEE Countries need to act:
              Immediately, to address the gap between
               developed and underdeveloped countries
              Decisively, to change thinking and
               attributes
              Cooperatively, to leverage advantages
              Ingeniously, to leapfrog technologically
 SEE Countries need to capitalize on ICT potential and
  their rich human capital in order to attract foreign
  investment and exploit new technological
  opportunities
Southeastern Europe Telecommunications & Informatics Research Institute


            „bSEE‟ (pronounced beezy)
                     Concept
  “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 Scope
     A 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‟ 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




     „bSEE‟ Implementation (1/2)
 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;
Southeastern Europe Telecommunications & Informatics Research Institute




     „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 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 issues
                 Stability Pact and European
                  Commission support
                 National Governments active
                  involvement and commitment
                 Identification of financing
                 Creation of Momentum
Southeastern Europe Telecommunications & Informatics Research Institute


              „bSEE‟ Benchmarks
                             (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 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




                                      Telecommunications
                                     without national borders


                          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
Southeastern Europe Telecommunications & Informatics Research Institute




   Let’s get “bSEE”!!!


            Thank you for your attention
                       www.inatelecom.org

				
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