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Alternatives for Broadband Infrastructure and Access Development” 16 November 2009

Alternatives for Broadband Infrastructure and Access Development” 16 November 2009. Dr. Tracy Cohen Managing Executive: Regulatory. Neotel. New entrant – challenger- product of foreign investment SA’s first truly converged communication NGN operator (2006) Wireline and wireless

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Alternatives for Broadband Infrastructure and Access Development” 16 November 2009

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  1. Alternatives for Broadband Infrastructure and Access Development”16 November 2009 Dr. Tracy Cohen Managing Executive: Regulatory

  2. Neotel • New entrant – challenger- product of foreign investment • SA’s first truly converged communication NGN operator (2006) • Wireline and wireless • Full service licences (network and services) • Enterprise, wholesale, consumer market • Key network technology deployments: • CDMA EvDO, WiMax, Fibre • Full cable diversity • SAT-3/SAFE • Seacom (2009) (1.2 Tbps) (Commercial open access) • EASSy (End 2010) (640 Gbps) (Telco consortium) • WACS (2011) (3.1 Tbps) (Telco consortium) • 4.9 Terabits/s approaching South Africa within the next 2 years • National backbone - Infraco

  3. ZIMBABWE Phalaborwa POLOKWANE BOTSWANA MOZAMBIQUE NELSPRUIT PRETORIA WITBANK JOHANNESBURG SWAZILAND Ermelo Sasolburg NAMIBIA Welkom KIMBERLEY Bethlehem RICHARDS BAY BLOEMFONTEIN LESOTHO PIETERMARITZBURG DURBAN Umtata Bisho EAST LONDON CAPE TOWN PORT ELIZABETH George National Fibre Network • 8000km optical fibre, linking major centres • 5000 km expansion by end 2010 • Licence Rollout obligations • 5 y: 50% of population of metros • 10 y: 80% of total population EASSy SEACOM SAFE Mtunzini WACS SAT-3 Melkbosstrand SAFE

  4. Infraco Why? • State intervention to address high broadband costs as a result of high national backbone and international connectivity costs • Accelerate economic growth by expanding availability of broadband access • Belief that SNO as only infrastructure competitor would not create incentive to set prices significantly below Telkom’s • Government to invest in critical infrastructure but not metro access • Rail and power fixed services network assets (optic fibre network) intended for SNO (Neotel) • Government to own • Legislation passed – 2008 • Public funding • Utility level IRR of 16% • No policy on broadband within which to locate Infraco • Licensing delayed and complex • Role of state? • Ministerial intervention in (independent) licensing • Licensed only for network services (wholesale) in October 2009 • Industry will build its own national backbone anyway How? And..?

  5. ZIMBABWE Phalaborwa POLOKWANE BOTSWANA MOZAMBIQUE NELSPRUIT PRETORIA WITBANK JOHANNESBURG SWAZILAND Ermelo Sasolburg NAMIBIA Welkom KIMBERLEY Bethlehem RICHARDS BAY BLOEMFONTEIN LESOTHO PIETERMARITZBURG DURBAN Umtata Bisho EAST LONDON CAPE TOWN PORT ELIZABETH George National Fibre Co-Build EASSy SEACOM SAFE Mtunzini WACS SAT-3 Melkbosstrand SAFE

  6. Co-build • Change in law on self-provisioning • Effects of monopoly infrastructure providers • Adequacy of Infraco? (maintenance, redundancy) • Cost (passive infrastructure) • 3 phases • First of its kind – Various Models • Own Build Network • Co-Build Shared Trench, Shared Cable, Shared Bandwidth • Terrain • Commercials • EIA • RoW • Reconstitution/backfill • Suppliers • Labour • Govt co-ordination • Run rates improved • 7-26km/week • 25-28km/week Why? Options Pros and Cons to all Challenges Action

  7. Assumptions Communications infrastructure (and broadband) is essential for economic and social development Objective is affordable, wide-spread access and coverage Need to increase (investment in) infrastructure Sharing will reduce costs of entry and operational costs Problems are largely “access regime” and rights of way issues The regulatory tools are available Incentive creation is critical

  8. Policy question underpinning share or build? Do you share or build infrastructure? Bottlenecks? Greenfields? Underserved areas? Competition Investment Open Access Exclusivity

  9. Policy/Regulatory Approach • Informed by different country contexts and policy • Functional/structural separation • State/privately owned infrastructure wholesaler • New entrant/greenfield player • Legacy-plus hybrid (JV, co-operative) • Non-telecoms infrastructure that allows rights of way access

  10. Best Practices • Assist RoW and EIA • Act as a clearing point for RoW if multiple agencies • Transparency – site surveys and geographical information • Reduce costs • Speed up process • Create incentives: • take strands for municipal services • retain dark fibre and light for other operators • tax incentives • spectrum Policy-makers Government Be clear on policy and role of the state Industry • Be creative with sharing • Transparency – publish information • Coordinate trenching and duct works

  11. Discussion Tracy.cohen@neotel.co.za

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