universal service Archives — LIRNEasia


It appears that Myanmar’s universal service strategy has been finalized. Our work was represented in the draft that was put out for comments, but we made additional comments on that draft, which are here. Current mobile networks cover over 90% of Myanmar’s population, but the government believes the USF will be necessary to fund the development of network towers in unserved areas. Through the project the government is targeting 94% population coverage by the first quarter of next year and 99% coverage in the future. Once basic infrastructure is deployed to the rural areas, more advanced telecommunications services can be introduced in the future, the report states.
The results of our 2016 nationally representative survey were quoted extensively in Myanmar’s Universal Service Strategy document released in January 2018. This work has fed into the Government’s proposals in multiple areas including affordability, ownership of devices and digital skills. The manner in which our work on digital skills contributed towards the Government’s recommendations is depicted  in the table below. A more comprehensive document which includes the linkages between our work in affordability and ownership of devices can be found here.
The consultation document on Myanmar’s Universal Service Strategy includes the following paragraph: For Myanmar, mobile voice and broadband data services are considered basic communications services and thus are part of the country’s universal service definition. In 2016, 83% of households have a mobile phone, and 78% of mobile phone owners have a smartphone, allowing broadband Internet services to be used on mobile devices. Clearly, the large majority of the population enjoys these services, therefore these ‘universal’ services also need to be made available for the minority that do not have these services today. Given how many countries debated whether or not broadband should be included in universal service subsidy programs, the above conclusion at the very outset of the program is quite significant. The conclusion is based on specific evidence.
When we discovered that Nepal had only spent 2.6 percent of the universal-service funds it had collected since 1997, we were shocked. No government could do worse, we thought. But we were wrong. The Bangladesh government’s disbursement rate is much easier to calculate.
Better late than never. Why it took multiple decades after the establishment of the Universal Service Fund to spend the money to connect the unconnected in India’s North East is the question. It’s not that there was a shortage of money. Bharti Airtel Ltd will set up 2,000 mobile towers across villages and national highways in the North East with the help of government funding, the company said in a press statement on Sunday. The telecom operator has signed an agreement with the department of telecommunications and the Universal Service Obligation Fund (USOF) to provide mobile services in 2,100 villages across Assam, Manipur, Mizoram, Nagaland, Sikkim, Tripura and Arunachal Pradesh over the next 18 months.
Better late than never. Why it took multiple decades after the establishment of the Universal Service Fund to spend the money to connect the unconnected in India’s North East is the question. It’s not that there was a shortage of money. Bharti Airtel Ltd will set up 2,000 mobile towers across villages and national highways in the North East with the help of government funding, the company said in a press statement on Sunday. The telecom operator has signed an agreement with the department of telecommunications and the Universal Service Obligation Fund (USOF) to provide mobile services in 2,100 villages across Assam, Manipur, Mizoram, Nagaland, Sikkim, Tripura and Arunachal Pradesh over the next 18 months.
I was pleased to that the journalist had chosen to report on how we obtained the data on the massive amounts of money lying fallow in government accounts. More researchers should consider using RTI requests to obtain data. “The money has been collected, and it’s in the Treasury not being spent,” LIRNEasia Chairman Professor Rohan Samarajiva said at the 2nd Sri Lanka Broadband Forum organized by the Telecommunication and Digital Infrastructure Ministry and Huawei. According to Telecommunications Regulatory Commission data he obtained through a Right to Information request, the government had collected US$351 million by the end of 2015. Sri Lanka’s Universal Service Fund is less burdensome on telecom companies—compared to other countries where a fee is levied from annual revenue—since just US$ 0.
Unlike many countries, Sri Lanka did not impose a universal-service levy on customers of telecom services, directly or indirectly. One reason was the clause in the SLT privatization agreements that no universal-service levies would be imposed on the company. When you exempt the biggest player, you can’t then go and impose levies on the competitors. So that was an intended good result of the privatization. However, when the international telecom market was liberalized in 2003, the government imposed certain fees on incoming and outgoing calls that were to be kept in a fund and given to the companies which generated the calls when they provided documentation that approved rural infrastructure investments had been completed.
Yesterday, I presented at CPRsouth 2017 a policy brief on the disbursement efficacy of universal service funds. We presented two relatively easy to develop metrics (year-on-year disbursement rate and cumulative disbursement rate) and applied them to four countries, India, Malaysia, Pakistan and Sri Lanka. The conclusion was that irrespective of country and irrespective of political and administrative leadership, the funds failed to get the money out. In India, for example, USD 10 billion had accumulated in the fund by 2016 taken out of a highly competitive sector and making no contribution to connecting the unconnected. We pointed out that any tax or levy imposed on an operator that is a regular payment is passed on to customers and serves to depress demand.
The big news from the last broadband course we taught in Nepal was that only 2.6 percent of all the universal service funds collected since 1998 had been disbursed.  This information, unearthed in the course of completing an assignment, was presented to decision makers in government who came to judge the mock public hearing.  It was published in the Nepali media. Two years later, the Senior Director of the Nepal Telecom Authority who spoke about the regulatory aspects of broadband rollout did not speak in vague generalities or in the future tense.
LIRNEasia’s research findings from the nationally representative survey on ICT use and information needs conducted in 2016 are being quoted by officials from the Ministry of Transport and Communications in Myanmar, Htaike Htaike Aung of MIDO reports.  Most recently, it has been quoted by U Myo Swe, Deputy Director General of the Post and Telecommunications Department at a consultative workshop on universal service strategy, design and implementation held today (16 February 2017) in Yangon. Key figures such as household mobile ownership (83%) and poor digital skills were mentioned by U Swe.  The increase in mobile ownership in rural areas was also highlighted. LIRNEasia’s research findings showed that mobile ownership in rural Myanmar increased from 26% to 53% between 2015 and 2016.
I and many others have been critical about the performance of universal service funds. One of the main criticisms has been their inability to efficiently disburse the collected funds. Having USD billions stagnating in these funds does not make any sense. In previous comments I have simply referred to the massive accumulations in the Indian and Brazilian funds, but I always thought it would be a good idea to develop an index. The data are not always easy to get a hold of, but we are proposing an index, or actually two.
IIC is an organization that provides a platform for discussion of ICT policy and regulation with a specialized focus. They are spending a week in our neck of the woods, Bangkok. The main conference will be on October 12-13. Here are the two sessions I am participating in on Day 1. SESSION 2: LINKING ICT POLICY AND REGULATION WITH SUSTAINABLE DEVELOPMENT GOALS AND INCLUSIVE GROWTH – WHAT MUST BE DONE DIFFERENTLY TO ALLEVIATE OBSTACLES TO UNIVERSAL CONNECTIVITY AND ACCESSIBILITY?
A4AI has published all the slidesets used at the universal service workshop, that LIRNEasia attended. The presentations are here.
One of the advantages Myanmar has in telecom is that it can learn from the experience of others, including countries that are/were similarly situated. This was the central proposition I advanced in my first piece on Myanmar telecom reforms, published in 2012 in Myanmar. Keeping to that theme, I spoke on what can be learned from the experience of others in designing and implementing universal service/access policies at a workshop organized by the Alliance for Affordable Internet on 27th July 2015 in Yangon. Presentation slides
The United States has been at the bleeding edge of universal service policy ever since the term was misinterpreted from the early competitive era. It is therefore worth paying attention to the current FCC efforts. We will soon have US Aid and others promoting these ideas in our parts. More than 12 million households now participate in Lifeline, which was created in 1985 by the Reagan administration to subsidize landline telephone service. In 2008, the program was extended to cover the cost of mobile phones.