A litigious incumbent A litigious incumbent and a cautious regulatorand a cautious regulator

and other reasons why R&E networking and other reasons why R&E networking is expensive in some countriesis expensive in some countries

Marko Bonač

ARNES, Slovenia

bonac@arnes.si

Status in EuropeStatus in Europe

EC document: Science, Technology and Innovation in EU+ 2002:“Candidate countries posses a huge potential capacity to produce scientific and technological knowledge.Their integration in the European Research Area opens new dimensions and opportunities in Europe”

The researchers all over the ERA would like to do the similar work

There is a big gap in the state of networking infrastructure for R&E between more and less developed European countries.

The gap is big and The gap is big and is becoming biggeris becoming bigger

Comparing research network elements

in more and less developed European countries:

International capacity: 1: 1000

National links: 1: 5000

Why:

Do less developed countries spend less on R&E networks ?

Are networks more expensive in less developed countries ?

NREN budget pNREN budget peer capita 2002r capita 2002

NREN budget per capita in 2002 (TERENA Compendium)0,5 EUR/cap 1 EUR/cap More than 1 EUR/cap-------------------------------------------------------- ------------------------------------------------------------ ---------------------------------------------------------------------------------

France Czech Rep. IrelandGermany Estonia PortugalItaly Lithuania CroatiaSpain Latvia Slovenia Denmark The Netherlands Belgium Norway United Kingdom Finland Switzerland

Luxemburg

It is mainly dependant on size of the country and not on its GDP per capita (as one would expect) !

NREN budget per capita/NREN budget per capita/GDP per capitaGDP per capita

France Germany Italy Spain UK

(size = x)

Belgium Finland Sweden Switzerland

(size = 2x)

Latvia Lithuania Estonia Croatia Hungary Czech Republic Portugal Slovenia Ireland The Netherlands Luxemburg

(size = 3x – 8x)

Networking is relatively more expensive Networking is relatively more expensive in less developed European countriesin less developed European countries

GDP per capita in candidate countries is 25 to 70 % of the EU average

Telecommunication infrastructure is missing Prices for leasing infrastructure are high because

– telecommunication market is often not yet liberalized– telecommunication market is too small for real competition

Most of less developed countries are small – this brings additional problems.

Running an NREN in a small country Running an NREN in a small country is expensiveis expensive

In a small country it is more expensive

(calculated per user) to provide the same level of service.

Relatively more international capacity is needed Low capacity circuits are relatively more expensive Circuits so the same capacity are often more expensive The NREN needs the same effort to introduce a new

service

NREN externalNREN external capacity (2001) capacity (2001)

NREN external capacity in Mbps

in country per 1 million inhabitants

Germany 12 France 14 UK 13

Slovenia 23 Ireland 32 Switzerland 43 Luxembourg 50

NREN external capacity NREN external capacity in Mbps per 1 mil in Mbps per 1 mil inhabitantsinhabitants (2002) (2002)

Italy 52 Poland 62 France 84 Germany 118 Estonia 142 Slovenia 155 Czech Republic 175

Ireland 205

Hungary 238 Luxemburg 375 The Netherlands 484 Belgium

573 Switzerland 548 Finland

1135

Subscription to GEANTSubscription to GEANTin Mbps per 1 mil in Mbps per 1 mil inhabitantsinhabitants in 2003 in 2003

Ireland 641 Luxembourg 388 Switzerland 342 Slovenia 326 Hungary 248 Belgium 243 Lithuania 172 The Netherlands 150 Croatia 141 Czech Republic 120

Greece 116 Estonia 111 Nordunet 103 Poland 65 Spain 62 Italy 43 UK 42 France 42 Germany 30

Average traffic received from GEANTAverage traffic received from GEANTJuly 2002July 2002

Average received traffic per capita in

Austria, Slovenia, Croatia, Estonia, Greece, Hungary, Lithuania, Luxemburg, Switzerland

was at least 6 times greater than in

France, United Kingdom, Germany, Spain

GEANT cost per 1 mil GEANT cost per 1 mil inhabitantsinhabitantsx = the cost for the cheapest countryx = the cost for the cheapest country

Germany United Kingdom France Italy Spain Poland Nordunet Rumania

(x – 4x)

Greece Estonia Slovenia Cyprus Lithuania Ireland Malta Luxembourg

(16x – 57x)

0.000

0.200

0.400

0.600

0.800

1.000

1.200

0

capacity in Mbps

price per Mbps

Price for international circuit is not a Price for international circuit is not a linear function of capacitylinear function of capacity

This graph applies to SDH,This graph applies to SDH,for DWDM the curve goes even lowerfor DWDM the curve goes even lower

Circuits of the same capacity Circuits of the same capacity are more expensive are more expensive

For less developed countries Telecommunication market is often not yet liberalized

orit is liberalized on the paper but not in the practice.

If the country is also small: In many cases there is only one operator There is less demand for high capacity circuits Telecommunication regulator has not enough staff (but

the problems are the same as in bigger countries)

What can be done (now) in less developed What can be done (now) in less developed countries for the realization of “equal countries for the realization of “equal

opportunities” in ERA ?opportunities” in ERA ? NREN can enlarge its user community

(connecting schools and libraries)– NREN can double its user community with 20 % additional funds– Access outside towns could be a problem (ISDN, ADSL)– Is this an unfair competition in the ISPs market ?

The government can stimulate real competition in telecommunication infrastructure sector

NREN can get more money from the local sources NREN can get some support from other NRENs NREN can get more financial support from the EC