Bandwidth Reduction and Latency Tolerance in Real Time Internet Applications
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Transcript of International internet bandwidth: Supply and demand ITU workshop on Internet Traffic Infrastructure,...
International internet bandwidth: Supply and demand
ITU workshop on Internet Traffic Infrastructure, Doha, 6 November 2012
Dr. Tim Kelly, Lead ICT Policy Specialist, World Bank
New World Bank Group Strategy, 2012-2020
Three Pillars of Strategy• Innovate – Support ICT innovation for jobs
and competitiveness across industries– Promote ICT skills to develop competitive IT-
based service industries in selected countries– Promote ICT-enabled productivity gains across
industries
• Connect – Scale up affordable access to broadband internet– Support policy and institutional reforms for
private investment in broadband– Selective support of PPPs in frontier markets to
promote affordable access for all
• Transform – Use ICT to transform service delivery across sectors – Promote open and accountable development
using open government, open data, and aid accountability
– Transform service delivery using ICT applications in economic and social sectors, and establishing cross-sector foundations
Climate Change
Trade
Governance
Ener
gy
Agriculture
Heal
th
Finance
Transport
Broadband Gap: The Opportunity and the Challenge
3
Although the global digital divide is disappearing for mobile access, it is still evident for broadband internet access
4
International Bandwidth Growth
International Bandwidth Growth, Tbit/s, 2008-2012Source: TeleGeography Inc.
Globally, bandwidth growth is slowing, but has still increased almost 5-fold between 2008 and 2012
In Africa, bandwidth increased 20-fold between 2008-2012, helping to narrow the international bandwidth divide Nevertheless, bringing internet capacity into the interior of Africa and other continents remains the major communications challenge of the 21st Century
5
Delivery of broadband involves a complex supply chain
International connectivity
Domestic backbone
Switching/Routing
Access
Retail services
Connection to the rest of the worldprovided by satellite or fiber optic cable (usually submarine).
Carries traffic between fixed points within a network. Provided by satellite, microwave, or fiber optic cable.
“Intelligence” in the network that ensures that communications traffic is routed correctly.
Link between the customer and the network. Usually xDSL or cable networks. In developing countries, wireless dominates.
The “soft” inputs required, such as sales, customer care, and billing.
Regionalconnectivity
Connection from the border to the nearest connection to the rest of the world.
6
International connectivity
Domestic backbone
Switching/Routing
Access
Retail services
Connection to the rest of the worldprovided by satellite or fiber optic cable (usually submarine).
Carries traffic between fixed points within a network. Provided by satellite, microwave, or fiber optic cable.
“Intelligence” in the network that ensures that communications traffic is routed correctly.
Link between the customer and the network. Usually xDSL or cable networks. In developing countries, wireless dominates.
The “soft” inputs required, such as sales, customer care, and billing.
Regionalconnectivity
Connection from the border to the nearest connection to the rest of the world.
Some parts of this supply-chain are potentially more competitive
Low barriers to entry
Moderate barriers to entry
High barriers to entry
7
Africa and Middle East
International Internet Connectivity
Projected, 2014
2011
2007 submarine cables
ImplementedCommitted FY07-10Committed FY11 and in Preparation
Since 2007 the Bank has approved regional connectivity programs (WARCIP, CAB, RCIP…) amounting to $1.2 billion
involving more than 30 countries
9
Regional Communications Infrastructure Program (RCIP)
Burundi Communications Infrastructure Project - US$ 20.1m1. Enabling environment2. Connectivity: national backbone, capacity purchase
Madagascar Communications Infrastructure Project - US$ 30m1. Enabling environment2. Connectivity: national backbone, capacity purchase
US$ 424 million regional Adaptable Program Loan, disbursed in phases
Open to 26 countries in East and Southern Africa
Loans and grants made available on basis of open access principles
Countries covered include Burundi, Comoros, Kenya, Madagascar, Malawi, Mozambique, Rwanda, Tanzania, UgandaKenya Transparency and Communications Infrastructure Project -
US$ 114.4m1. Enabling environment2. Connectivity: capacity purchase, digital villages3. Transparency: eGovernment applications
KENYA
BURUNDI
MADAGASCAR
Using PPP to roll out backbone networks
10Ownership / Risk
Scop
e of
Ent
erpr
ise
Func
tiona
lity
/ Se
rvic
e O
fferin
g
Public Private
Limited Scope
Wide Scope
Management Contract
NetworkLeasing
IPO Full Privatization
Concession Contract
Outsource (BPO)
BOO
PPP case study (STP)
PPP case study (Burundi)
• Emerging international experience in the telecom sector shows that the use of PPP is the best solution to guarantee the interests of the government, private partners and consumers in frontier markets. Reducing operational risk for the public sector Reducing capital risk for the private sector Lowest cost solution and highest quality of service Faster delivery/time to market and expert project management skillsAccess to private capitalEnables high risk /low return projects
• A Public Private Partnership (PPP) is an agreement between the government and private organizations to develop, operate, maintain and market a network by sharing risks and rewards (there are several forms).
11
Examples of PPP models used by the World Bank in Africa
1. Cooperative Model - Burundi Backbone System (BBS)– Cooperative solution in which users (mobile operators and ISPs) are owners ($ 10 million
investment) , enabling “self –regulation” of the network (open access, non-discrimination, low cost oriented pricing, high quality)
– Government provides subsidy ($ 10 million) with no ownership (national backbone would not be feasible without, nor backbone extensions to rural areas)
2. SPV Share ownership model - Sao Tome Principe, Liberia, Sierra Leone, Gambia– SPV created with Government and private operators as equity shareholders– Ownership reflects capacity uses and provides for government shares (warehoused) to be divested
in future to new operators or investors
3. Bulk purchase model - international connectivity – Rwanda and Malawi– Stimulate investment through aggregating demand (anchor tenant approach)– Competitive tender to supply fiber-based connection to submarine cables– Long-term supply contract to government (no government ownership)– Operator acts as wholesaler in the market
4. Concession Model – Congo, traditional BOT approach whereby assets transferred to the client government at the end of the concession period (e.g. 20 -25 years)
5. Management Contract (O&M) – Gabon, private sector operator contracted to manage and operate the network during (for 3-5 years) with core assets remaining the property of the state
PPP case study (1) Cooperative model: national links in Burundi
12
• Problem– All domestic network infrastructure is
wireless– Limited broadband– National fiber optic network would not
be feasible without government subsidy• Strategy
– Operators and ISPs form company to develop and operate network
– Government co-finances ($ 10 million) development of national backbone network through WB project
– Government finances ($ 10 million) through subsidy/prepayment, no public ownership
– Users (are owners , enabling “self –regulation” of the network (open access, non-discrimination, low cost oriented pricing, high quality)
– WB project finances studies and designs– Construction and operation governed by
PPP contracts and license/concession agreement
Example 1: Burundi Backbone System
Subsidy
IDA Credit
Equity
Africell
BurundiBackbone
System
TelecelONATEL
OthersCBINETECONET
BurundiGovernment
Dividends
Dividends
X% Y% Z%
Capacity sales
All operators who wants to buy
capacity
X% Y% Z%
US$10m US$10m
Fbre fiberSDH MW ring
PPP case study (2) SPV Share ownership model :ACE international connectivity in STP
14
• Problem– Africa’s smallest economy and one of the
poorest countries in the world– Prices for voice and internet services are
above average in the region– Unsuccessful attempt to introduce mobile
competition in 2007– International fiber optic connectivity
would not be feasible without government subsidy
• Strategy– forming a local SPV (Special Purpose
Vehicle) company to channel the different parties’ contributions into the ACE consortium ($ 25 million) and to access ACE capacity
– Ownership reflects capacity uses and provides for government shares (warehoused) to be divested in future to new operators or investors under open access conditions
– WB project finances Government’s contribution in ACE and studies to support policy and institutional reforms
Sao Tome Principe, Liberia, Sierra Leone,
Gambia, Guinea+
Mauritania
15
International lessons learned
• Infrastructure competition is the most effective way of promoting investment and competition
• Competition is viable at some level in many segments of the international/domestic backbone infrastructure. If government supports competition through providing easy access to rights of way, alternative infrastructure (e.g. railways) and through direct support to passive infrastructure, infrastructure competition will develop.
• But full infrastructure competition not possible in all areas of a country and in all segments of the market
• Regulated access to dominant operators’ infrastructure is the second-best solution where competition is not yet effective. Regulation is always difficult because of information and skills asymmetries. Operators fight regulation, sometimes for years.
• Government’s attempts to regulate key bottlenecks (e.g. landing stations) have been expensive and usually not fully effective.
16
For more information
• Tim Kelly ([email protected])
• Broadband Strategies Toolkit (www.broadband-toolkit.org)
• Regional Communication Infrastructure Program (RCIP) in Africa http://go.worldbank.org/1UNCU3TTM0