NATIONAL ICT CONVENTION

1. NATIONAL ICT CONVENTION UNIVERSAL ACCESS AS A MEDIUM-TERM STRATEGY FOR ICT. PRESENTATION BY Mr. ALEX KAHINDI CCK 24th March 2004 SAFARI PARK HOTEL

2. Universal Access • Until recently the concept of Universal Access was limited to access to a telephone line. However, this has now changed and is now defined as “community access to affordable and efficient information and communications facilities”. • It entails a deliberate effort by governments and regulatory authorities to make communication services available at affordable prices, to as many people as possible through such facilities as community telecentres, public call offices (telebureaus, public pay phones, etc). • Universal Access also includes provision of advanced services such as Internet, tele-education, telemedicine, etc. .

3. Universal Service • Universal Service refers to household access to telephone services. • Universal service policies are more commonly found in developed countries. • Universal service is aimed at increasing the number of individual residences with info-communication services, including those in rural, remote and high cost locations.

4. Access Gaps • In developing countries, Universal Access as opposed to Universal Service is the most feasible way of dealing with access gaps that exist. • In Kenya as in most developing countries, two access gaps are identifiable i.e. market efficiency gap and true access gap. • The market efficiency gap can be bridged through legislation and policy interventions. • On the other hand, the true access gap can only be addressed through mobilizing additional investments e.g. through Universal Access Fund and similar mechanisms.

5. Successful Funds • Universal Access Funds have been established in many different countries across the world. Some of the most successful funds are in Latin America. • In Chile for example, the fund has enabled the country to reduce the access gap from 15 per cent in 1995 to 1 percent in 2000. • In Africa, rural communication development is becoming a reality in some countries like South Africa, Nigeria and Uganda where the respective Governments through donor assistance have established Universal Access Funds

6. Sources of Funds • Direct funding from general government revenues (e.g. between 1995 – 2000, the Government of Chile allocated a total of US$ 2.8 million for rural communication). • Contribution from telecommunications operators (e.g. 0.16 % and 1% of operators’ gross revenue in South Africa and Uganda respectively). • Proceeds from telecommunications privatization, spectrum auctions and/or license/concession payment, etc.(e.g in Colombia and Bolivia). • A subscriber levy (e.g. on per access line basis) collected by telecommunications operators (e.g.in Costa Rica and Dominican Republic). • Funding from international development agencies (e.g World Bank provided seed capital in Uganda, Nigeria, Nepal, Bolivia and Nicaragua) Other Access Mechanisms • Market based reforms: privatization, competition and cost-based pricing. • Mandatory service obligation: imposed by license conditions or other regulatory measures. • Cross subsidies: between or within services provided by incumbent operators. • Access Deficit Charges: paid by telecommunication operators to subsidize the access deficit of the incumbent.

7. Situation in Kenya • Telecommunication • TKL like PCK is mandated with the provision of USO. • TKL has exchange capacity of 492,222 but only 70 % is utilized. • In order to meet the Government’s teledensity objective, the Commission has licensed one RTO, two local loop operators and in the process of licensing the second National Operator to spread the services. • Two licensed mobile operators with a coverage of about of 50% of the population but only 2.2 million subscribers have been connected (or mobile teledensity of 7 per cent). • A third mobile operator will be licensed soon. This may lower the cost and increase coverage to other areas. • Information Technology • In 2003 there were only 252,000 computers in the country (0.76 computers per 100 persons) . • There are about 80 ISPs in the country with local nodes in about 14 towns. • 550,000 Internet users in the country (90 % in Nairobi). • The government is in the process of developing an ICT policy to improve the sector.

8. Universal Access Project Collaborative funding of US$ 220,000 between CCK and IDRC. Objectives of the Project The main objective of the study is to conduct research and consultations leading to the definition and articulation of a policy, plan and mechanisms for Universal Access (UA) strategy for the country’s communication sector The Project will specifically aim at:- • Conducting research to support the definition of the overall policy goal and interrelation of the fundamental sector policy, universal access policy, regulatory and financial mechanisms including interconnection. • Establishing rural demand and user preferences by undertaking a baseline survey. • Conducting market assessment and articulate/recommend supply strategy. • Proposing/recommending mechanisms and strategies for the realization of Universal Access Progress • The Project officially commenced on 8th December 2003 and runs until July 2004. • First stakeholders workshop was held on 4th February 2004.

9. Linkages to other Projects • Education and Human Capital Development (KENET, SchoolNet, Kenya National Library Services) • Environment and Natural Resources Management. • Rural Financial Services (Pride Africa, Post Bank, K-Rep, etc). • Health (Rural Clinic, Community Health Services, Telemedicine) • Rural Communications Projects through telecenters. • Conclusion The development of universal access strategies, the creation of and operationalization of a Universal Access Fund hold a tremendous promise for the country, particularly for the majority of Kenyans (80%) who live in the rural areas. As indicated earlier, the overriding objective of UA initiative is to expand and maintain availability of affordable communication services to those who would otherwise not be served and ensure that all communities draw maximum benefits from these services. The results of the Universal Access study will therefore go a long way in the realization and convergence of the various ICT initiatives .