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Private and Public Sectors’ Roles

Private and Public Sectors’ Roles in Establishing Effective and Sustainable Measures Towards Solving the Digital Divide. January 12, 2003. Satoshi Fujita NTT Communications. Lessons Learned in Sri Lanka and the Philippines (1). NTT in Sri Lanka and the Philippines ■ Sri Lanka

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Private and Public Sectors’ Roles

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  1. Private and Public Sectors’ Roles in Establishing Effective and Sustainable Measures Towards Solving the Digital Divide January 12, 2003 Satoshi Fujita NTT Communications

  2. Lessons Learned in Sri Lanka and the Philippines (1) NTT in Sri Lanka and the Philippines ■Sri Lanka 　●　Sri Lanka Telecom - No.1 carrier in Sri Lanka - NTT’s investment share: 35.2% - Services: Regional, long distance and international, Internet, cellular - CEO from NTT Com - IPO in 2002 ■The Philippines 　● ODA (National Telephone Program: NTP) - From 1991 to 1995 - 60,000 lines in 71 town and cities that previously had no telephones 　● PLDT - No.1 carrier in the Philippines - NTT’s investment share: 15% - Services: Cellular, regional, long distance and international, Internet

  3. Lessons Learned in Sri Lanka and the Philippines (2) Sri Lanka ■Importance of efficient operations: Private sector and privatized organizations 　● Significant improvement in operation performance 　● Realization of IPO in 2002 　● Contribution to country’s industrial development 　● Cooperation with government programs ■Role of public sector: Support and compliment private sector (privatized telecos, etc.) 　● National Communications Policy ● Universal Access Policy towards raising living standards - Communications in remote areas and user groups inadequately served - Establishment of indicators to evaluate ICT access 　● Telecommunications Development Fund (TDF) - Contribution by licensed operators - Focus on rural areas, but at same time following market principles - Telephone access to rural post offices and sub post offices -Multi-purpose Community Telecenters (planned)

  4. 708,000 Double 22,060Rs.Mil. Triple 13,725Rs.Mil. 315,000 1997 2001 1997 2001 Operation Revenue No. of Subscribers 16% 0.9Rs.Mil.UP Half 2.5Rs.Mil. ■ 1.6Rs.Mil. 7.3% ■ ■ ■ 1998 2001 1997 2001 Productivity (Revenue / Employees) Fault Rate* Improvement in Service and Financial Performance Sri Lanka Telecom *Fault rate per 100 subscribers

  5. Lessons Learned in Sri Lanka and the Philippines (3) The Philippines - 1 ■Expansion of telecommunications network in rural areas: Only 1/3 of 30,000 “Barangay”s (smallest unit of local communities) enjoy fixed-line telephone service 　● Competition - Long history of laissez-faire - Concentration of investments in main cities ● Public sector - “Telepono sa Barangay!” : “Telephone in every village!” * Burden to operators, program stopped: commission and cost 10 to 20 times higher than normal) ● ODA - ODA is efficient. NTP was a success to some extent. - Organization problems: European programs failed.

  6. Lessons Learned in Sri Lanka and the Philippines (4) The Philippines - 2 ■Success of “private” and “mobile phones” ● Smart (PLDT) and Globe ● 80% service coverage ● No. of subscribers: 11M with a penetration rate of 14.5% (Fixed-line: 3.1M subscribers with a penetration rate of 4%) ● Cost effective - Cost reduction: from $500 to $50 (Fixed-line cost $1k in cities, $2k in rural areas) - Mobile phone set - open tender - Pre-paid method popular

  7. ‘Disruptive’ Technologies Impact of Disruptive Technologies in Telecommunications ISDN Analog Tel. 3G Performance Disruptive Innovation i-mode Fixed-line Telephone Optical DSL WLL Mobile Mobile LAN Internet Time

  8. Internet Access Charges in Japan ： Flat Rate/1M （yen） 150,000 ＩＳＤＮ（64k） 125,000yen 100,000 56,250yen 70,312yen 43,750yen 1/320 in two years (ISDN→ＡDSL8M) 50,000 51,562yen 45,312yen 4,000 3,400yen 3,066yen 3,000 2,533yen ＡＤＳＬ（1.5M） 2,000 1,933yen 1,300yen ＡＤＳＬ（8M） 1,000 Optical（10M） 500yen 387yen 0 June 2001 January 2000 June January 2001 June December （Month） 1 yen = $0.008

  9. Best Mix of Private Options & Public Initiatives ■Adoption of the most efficient technologies ● ‘Disruptive’ technologies: “low-cost, high-service” 　● Combination of fixed-line and wireless, including cellular phones, such as in Sri Lanka and the Philippines ■Role of public sector 　● Human resource development - Education, IT literature: For example, the Multi-media University in MSC (Multi-media Super Corridor), Malaysia 　● Regulations - Competition guidance and monitoring ● Finance: Secure universal access ● Information and knowledge sharing ■ Cooperation between private and public sectors, including NPOs and international Institutes, is important.

  10. % As of 2001

  11. ＜Top 20: Number of Mobile Subscribers and Mobile Penetration Rate＞ As of 2001 Million

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