Enabling the Universal Access of telecommunication services through the development of private WiMAX telecenters in rural areas enabled by Universal Access Funds

Abstract

The quest to attain Universal Access and Service in the telecommunication sector is hampered mostly by the high cost of deploying telecom networks in rural areas and Non-commercial viable areas. This paper discusses how the use of WiMAX as an alternative technology, transmitted by small network operators in rural areas using telecenters as the WiMAX base stations can help in reducing the cost of deploying a telecom network as well as enable rural dwellers to afford the service by either using the telecentres of access the service remotely via Customer Premise Equipment. This is a conceptual paper based on an on-going research at CMI, Aalborg University Copenhagen on developing a Public Private Partnership framework for deploying telecommunication services in rural areas.

Keywords: Universal Access, Universal Service, Telecommunications, WiMAX, Telecentres, Policy

1. Introduction:

Telecommunications is a public good with tremendous public interest. This is because of the network effect created by telecommunications and its role in bringing government from the external agency that affects our lives to an agency that becomes a part and parcel of our lives. Today as broadband internet and the mobile phone drives the growth and interest in telecommunications due to its pervasive nature to our daily lives this public good has been viewed by some school of thought as a natural resource (Toure 2010). With this importance attached to telecommunication network and services, governments are now interested in making sure that every citizen within their domain has access to efficient and affordable telecommunication services. Hence the words Universal Access and Universal Service of telecommunication services has become a part and parcel of telecommunication discourse from time immemorial till date. Universal Access refers to the availability if the telecommunication networks to every citizen within a defined location. The defined location could be a country, province, local area or even a continent depending on the terms of reference (Falch, 2009). Universal service refers to the use of the telecoms services within the defined geographical location (Falch, 2009). Hence one can have access but not the service. You need the Customer Premise Equipment (CPE) or mobile devices to tap into the telecoms network. In another way you could view Universal Access of the telecommunication network as the diffusion of the network and Universal Service as the adoption of the network’s services. But more public interest at the moment is channelled towards the availability of the networks than the diffusion of the networks. Countries that channel their energy into the household penetration of telecommunication networks are mostly countries with very high whose effort towards Universal Access is very high and they have achieved a lot in that sense.

However, despite this quest of attaining Universal Access and Service, the reality of non-commercial areas, rural areas and other high risk investment areas has prevented the Universal Service of telecommunication networks to be achieved. Issues of having a very high cost in the deployment of telecommunication infrastructure and breaking even has led many telecommunication service providers to terminate their networks in cities. This may not be prevalent in developed countries, but in many developing countries this problem persists.

Different policy approaches over the years have been adopted to stem these problems. Notable among them are:

(1) The Liberalization Policies of the 1990’s
(2) The development of ICT for Accelerated development policies (ICT4AD)
(3) National Telecommunication Policies
(4) Broadband policies and strategies

And a host of many other policy interventions were adopted. The liberalization policies led to the deregulation of the telecommunication sector in many countries. The postal services were separated from the telecom service of the old Post and telecom companies, which were of course monopolies. Separate regulatory authorities were created to regulate the telecommunication industry. Hence the era of the monopoly regulating itself was gone. But the rise in the cost of operation from government coffers in running the monopolies led to a lot of inefficiencies (Frempong etal, 2005). Hence there was need to further cut down on government control in delivering telecommunications services from the operational point of view. Hence many governments privatized their telecommunication companies and in some cases created a second national carrier to enable competition in the system. The focus at that time was on enabling the Universal Access and Service of Voice telephony. The mobile telephony at that moment wasn’t lucrative and there was no good business model for existing Analogue standard of mobile technology. However things changed with the advent of a new Standard for Mobile Telephony. The Global System for Mobile Communications (GSM) brought about new possibilities as it was much cheaper to develop a GSM network that to deploy a fixed line network. Secondly, the GSM had new and efficient functionalities of communication enabled by the packet switching technology. These functionalities included the Short Message Service (SMS), the Multimedia Message Service (MMS), paging etc. To enable the service become ubiquitous, the pre-paid business model of mobile subscription enabled the GSM to Push the teledensity of the world farther than the fixed line telephony did in almost a half a century. Statistics on this can be viewed on line at the ITU’s statistic homepage available at: http://www.itu.int/ITU-D/ict/statistics/ ….

As standards for the 2nd Generation standards for mobile telephony kept improving, so was service capacity, enabled by bandwidth capacity also improved. Governments in order to tap into the various applications that could be harnessed from the various possible service scenarios developed National Telecommunication policies and ICT for Development (ICT4D) policies. The possibilities of E-commerce, E-health, E-government, M, commerce, M-banking, E-Education etc. were highlighted as the roadmap towards an E-economy. These possibilities were further strengthened by broadband, and Next Generation Networks (NGNs). Hence different broadband policies have been drafted and reviewed as a way of harnessing telecommunication services. Initially Fixed line telephony which was a natural, successor of the telegraph was seen as that telecommunication network of choice, but now the public agencies have added broadband technologies and mobile technologies as part of telecom network technologies that should be ubiquitous.

One beautiful thing that these policies and the development in technology have produced was a shift from the monopolistic and in some cases duopolistic market to a competitive market. Aside the advancement in technology and the enabling policies, the competitive market has been of great benefit to those in the cities than for those in rural areas, especially in third world countries.

There is need for more to be done in order to make sure that those in these non-commercially viable places have access to the services enjoyed by their counterparts in cities. There is an on-going research taking place at CMI Aalborg University, in which the Author is researching into the use of Public Private Partnership to develop rural telecommunications. There has also been implementation of telecentres as proposed by Townsend etal (2001) as a means of bringing the network service close to people in rural areas. There has been different means of implementing Universal Access and service in these places with risky investment potential. Some ideas have worked while others haven’t. This paper is a conceptual paper building on findings of Townsend and Stern (2003). It is a proposition of an idea and to make case for the developing WiMAX enabled telecentres in rural areas, financed partially by Universal Access and Service funds. An overview of different models of Universal Access will be discussed; the reason for choosing WiMAX will be discussed as well. A brief overview of the importance of having local entrepreneurs and not the public operate the telecentres will be outlined.

2.0 Overview of Universal Access

Universal Access has been mentioned in the introductory part of this paper. To achieve Universal Access, different models are employed by different telecom regulatory bodies or Universal Access and Service funds. This section takes a snapshot on some of the models.

2.1 Some Universal Access models

Some of models that will be reviewed are models identified by Morten Falch (2009), and Townsend et al (2003).

Morten Falch (2009) identifies the following models: Market based reforms, Access Deficit Charges, Universal Access Fund, Cross Subsidization efforts and Universal Access Obligation. Townsend et al (2003) identifies the telecenter initiative model.

1. Market based reforms: Reform as defined by Merriam-Webster is “to put or change into an improved form or condition; to amend or improve by change of form or removal of faults or abuses” (Merriam-Webster, 2010). In telecommunications market based reforms have been implemented by various countries to enable the expansion of telecommunication services. Market reforms are aimed at the correction of anomalies and subsequent expansion of the telecommunications market. The telecommunication market that is not saturated always has room for expansion.

There are many types of market reforms. However, this review will focus on a few that will be useful in our report. Some authors have identified some market based reforms. Morten Falch (2009) and Yongsoo Kim et al (2010) identified privatization of the telecommunication sector, promotion of access via competition, and rate balancing towards cost based prices and government support for National backbone development as some examples by which a telecommunication market can be reformed. Morten Falch (2009) went ahead to identify other forms of regulation that will lead to telecommunication market reforms. These include: Liberalization, Deregulation, Commercialization and corporatization. Liberalization is common in West Africa hence it is important to review it briefly.

Liberalization involves the separation of the post from the telecommunications arm of the state telecommunication monopoly. The regulatory aspect of the national monopoly is separated from the operations aspect. This makes the state telecom company independent. It also involves the liberalization of telecommunication services, facilities and customer premises equipments (Morten Falch, 2009).

However in this research, Promotion of Access is the focus of market based reform. The ICT regulation toolkit recognises some ways in which access to ICT can be enhanced (Practice note 3079ict, regulation toolkit). They are,

(1) The provision of services in a competitive framework using new technologies that offers both innovative services and affordable pricing options.
(2) Promotion of affordable ICT equipment. This may include reduction in custom tariffs and duties, manufacturing of ICT equipments locally and provision of end user loans to enable the affordability of ICT equipment.
(3) The creation of telecenters and Multi-purpose community centres.
(4) The provision of education and training programmes to encourage the use and impact of ICTs on local peoples on the benefits of ICT.
(5) The provision of local input which will comprise of the provision of content for the local population. This will give rise to projects which will have relevance to the local population and therefore lead to long-term financial sustainability.

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