ISLAMABAD ( By Parvez Iftikhar )
A little more a weak ago, I attended a contract signing ceremony between the Universal Service Fund (USF) and Telenor, whereby USF will fund provision of mobile broadband service to over 1,200 villages in the Kohistan area of Khyber-Pakhtunkhwa.
The occasion was notable, not only because they are taking broadband to the remote area of Kohistan, but also because it appears that USF has become active.
Just last month, a similar broadband project was launched for the remote Awaran-Lasbela area of Balochistan, and in September last, for areas around Khuzdar and Chagai, also in Balochistan. So far, five projects in eight months of fiscal year 2016-17, (committing subsidy of nearly Rs10 billion), are indeed an accomplishment, for which the IT minister and the USF team need to be congratulated. One hopes that this pace continues, rather it picks up further.
After remaining dormant for most part of previous years, it was only in the last fiscal year that things started to pick up and USF launched five projects – committing subsidy of Rs9 billion – in 12 months of 2015-16. In the year prior to that, only two projects with a subsidy of less than Rs4 billion were launched.
Two issues need attention here.
Unutilised funds
Exactly how much money is lying unutilised and un-committed in the USF books, no one outside the government knows. There are no figures available on any government website which could tell us how much was collected in the previous years.
Whereas, on the disbursement side of USF, things are fairly transparent, on the collection side lack of transparency is not understandable. Careful “guestimates” suggest that around Rs50 billion is available – after deducting the commitments. Roughly Rs12 billion is being added to this by the operators every year.
To be fair, it is unfair to the telecom sector. Just because the governments did not do enough to spend, the money collected from the operators for ploughing back into the sector is lying idle. Even the recent relatively enhanced activity of USF is not enough to utilise the huge amount in its books.
With the urbanites using broadband internet to increase their productivity and improve their lives, the urban-rural digital divide is widening.
Long-distance rural optic fibres
Lack of penetration of optic fibre information highways in the rural areas is another factor contributing towards digital divide. We must prepare for the ever-growing insatiable demand for bandwidth.
Ultimately, there will be a need to haul huge amounts of data from, and to, the villages – not only for 3G and 4G services, but also for applications pertaining to agriculture, education, governance, policing, health, commerce, livestock, etc.
However, in the last couple of years, USF funds have been going only to the last-mile operators. Although last-mile operators also lay long distance optic fibres (or microwave links) for backhaul, the problem is that those long distance links are meant for their own use.
Due to competition, the barriers are raised for other last-mile operators, who would like to launch services too.
Pure Long Distance International (LDI) operators were supposed to fill that gap since their business model rests on sharing the wholesale capacities of their “pipes” with retail last-mile operators. But unfortunately that remains only partially true because nowadays almost all LDI operators are closely associated with one or the other last-mile operator.
This defeats the purpose of pure long-distance operators. In neighbouring India, where USOF subsidy is being utilised to build a gigantic optic fibre network, which will connect 250,000 village clusters, a separate company has been formed for it.
Perhaps we need to do something similar.
Recommendation
In order to bridge the digital divide, a serious effort will have to be made to take the optic fibre highways to every nook and corner of the country.
USF will have to launch a country-wide mega project of optic fibre network for villages, which should start from connecting the existing rural cellphone towers, schools, healthcare facilities, local government offices, telecentres, post offices and so on.
Access to such a network should be available equally to all those who ask for it – including last-mile operators – at a reasonable cost. For that, one option could be to subsidise exclusive “Infrastructure Licensees”, with no direct commercial interest in telecom operations.
They lay their optic fibre networks and all last-mile operators, and others, get equal access to those networks. Their revenues should be based solely on filling their optic fibres with as many bits and bytes as possible.
However, that will require removing the condition that USF subsidy recipient must also be a USF contributor.
Another option could be to subsidise a public sector entity with no competing interests (NTC?).
USF is doing better now and the time is ripe for a mega leap forward – the need and the money are both there.
The writer is former CEO of the Universal Services Fund and is providing ICT consultancy services in several countries of Africa and Asia
Published in The Express Tribune, March 6th, 2017.