Universal Service Obligation
- ASEAN 2nd June 2014
Wisit Atipayakoon
ITU Regional Office for Asia and the Pacific
International
Telecommunication
Union
Overview of ITU
2
United Nations
Specialized Agencies of the United Nations
UNESCO
WB
WHO
UNWTO
ILO
FAO
UPU
IFAD
ICAO
UNIDO
WMO
WIPO
IMO
IAEA
WFP
IMF
International Telecommunication Union
is a specialized agency of the UNs & focuses on Telecommunications and ICTs
ITU: International Telecommunication Union
 Founded in 1865; Responsible for issues that concern Information
and Communication Technologies.
 193 Member States, 545 Sector Members, 161 Associates, and 33
Academia.
 HQs in Switzerland, Geneva; and 4 Regional Offices & 7 Area Office.
ITU-R
ITU’s
Radio-communication
Sector that globally manages
radio-frequency spectrum and
satellite orbits that ensure
safety of life on land, at sea
and in the skies.
ITU-T
ITU's
Telecommunication
Standardization Sector that
enable
global
communications
by
ensuring that countries’ ICT
networks and devices are
speaking
the
same
language.
ITU-D
ITU’s Development Sector
that fosters international
cooperation and solidarity in
the delivery of technical
assistance and in the
creation, development and
improvement
of
telecommunication/ICT
equipment and networks in
developing countries.
ITU: Reaching out to the World
ITU Headquarter
Geneva, Switzerland
Europe Regional Office
Geneva, Switzerland
CIS Regional Office
Moscow, Russia
Arab Regional Office
Cairo, Egypt
Americas Regional Office
Africa Regional Office
Asia-Pacific Regional Office
Brasilia, Brazil
Addis Ababa, Ethiopia
Bangkok, Thailand
Area Office
Area Office
Area Office
Central Africa (Yaounde, Cameroon)
Southern Africa (Harare, Zimbabwe)
West Africa (Dakar, Senegal)
Jakarta, Indonesia
Tegucigalpa, Honduras.
Santiago, Chile.
Bridgetown, Barbados
ITU: Regional Office for Asia and the Pacific
 Responsible for affordable and sustainable access to and
use of telecom/ICT infrastructure and applications through
assisting members with various development initiatives
and projects based on multi-stakeholders' partnerships in
the Asia-Pacific Region.
 38 Member States and over 72 Sector Members.
 Regional Director: Dr. Eun-ju Kim
Least Developed Countries
(13)
Afghanistan
Bangladesh
Bhutan
Cambodia
Lao, PDR
Nepal
Myanmar
Timor Leste
Kiribati
Samoa
Solomon Is.
Tuvalu
Vanuatu
Fiji
Maldives
Marshall Islands
Micronesia
Nauru
Tonga
PNG
Small Islands Developing States (12)
Low-Income States (9)
The Rest (10)
D.P.R. Korea
Australia
Brunei
China/Hong Kong
Iran
Japan
India
Indonesia
Mongolia
Pakistan
Sri Lanka
Malaysia
New Zealand
R.O. Korea
Vietnam
Singapore
Philippines
Thailand
6
1. Principles
7
Universal Access and Service (UAS)
Universal Service Obligation (USO)
 Universal Service means that every household or
individual in a country has the opportunity for
telephone service.
 Universal Access means that everyone in a
community can gain access to a publicly available
telephone, although not necessarily in their homes.
Key Aspects of UAS
 Availability: the service is available to inhabited
parts of the country through public, community,
shared or personal devices
 Accessibility: all citizens can use the service,
regardless of location, gender, disabilities and other
personal characteristics
 Affordability: the service is affordable to all citizens
UAS Targets
 Rural areas: unserved or underserved
 Low-population density areas: where provision of
services is not viable
 Very poor urban areas in metropolitan cities: e.g.
slums
Classic Market Gap Analysis
Market Efficiency Gap
The gap between the service reach which can be achieved in a fully
liberalized and efficient market and what is actually achieved by markets
under existing conditions.
This gap can be bridged through private service provision so long as the
regulator and policymakers remove non-economic barriers, create
enabling regulation, ensure a level playing field among all market
participants and the create a positive fiscal, business and investment
climate.
This frontier can be reached within the context of telecommunications
sector reform and does not require subsidies. Many countries are now
doing very well in bridging this gap through effective competitive service
provision.
Smart Subsidy Zone
Rural or high cost areas, and low-income population groups that will not be
reached by the market alone, even if it is an efficient market, or at least not for a
long time to come.
Targeted financial intervention beyond normal regulatory measures and
incentives is required to provide services to these population groups and areas.
A smart subsidy is the term used to describe an initial subsidy (usually given on
a once-only basis) that is designed to be results-oriented, does not distort the
market, and encourages cost minimization and growth of the market. It helps to
kick start a project or service, with the ultimate objective of the programme
becoming commercially viable, whereas without the subsidy investors might
otherwise have been reluctant to invest.
No further subsidies are needed if the service targets are set realistically, with
medium term commercial viability in view. Targeted interventions are usually
implemented using a Universal Access and Service Fund (UASF).
True Access Gap
The true access gap comprises areas or communications targets that
are beyond commercial viability, even in instances where initial smart
subsidies are given.
Commercial sector operators or service providers serving these areas or
population groups would need ongoing financial support, possibly in the
form of operating subsidies (or end-user subsidies in the case of
universal service [US]).
It is a political decision if and to what extent to subsidize ongoing service
provision to areas and population groups that are beyond the limits of
the smart subsidy zone and whether or not to use UASFs to finance
such operations.
In some cases, true access gap areas can be combined with more
profitable areas, without need for ongoing subsidy.
Low Income Country Market Gap
Analysis
Scope of UAS/USO
Telephony
Data & Internet Communications
Broadband
Broadcasting
Contents & Applications
2. USO Practices in ASEAN
USO Context in ASEAN
Country
USO Policy
in-charge
Univ. Access Policy
Univ. Service Policy
Voice
Data
Voice
Data
Regulator
Y
Y
Y
-
Cambodia
Min/Reg
Y
Y
-
-
Indonesia
Min/Reg
Y
Y
Y
Planned
Laos
Ministry
Y
Y
Y
-
Malaysia
Regulator
Y
Y
Y
Y
Myanmar
Ministry
Y
Y
-
-
Philippines
Ministry
Y
Y
-
-
Singapore
Regulator
Y
Y
Y
Y
Thailand
Regulator
Y
Y
Y
Y
Vietnam
Ministry
Y
Y
Y
-
Brunei
USO Mechanism
Country
Brunei
Darussalam
Cambodia
Via License
condition
Other (specify)
X (in
process?)
X
X
Malaysia
X
X
Myanmar
X
Philippines
Singapore
Mandatory
Obligation via
State-ownedoperator
X
Indonesia
Lao PDR
Bidding
from
USOF
Obligations by the
law
X
Thailand
X
Viet Nam
X
Financing USO
Country
Brunei
Darussalam
USO Levy
Govt.
Budget
Cross-subsidy
(Internal
financing)
X
X
Lao PDR
Malaysia
Other
X
Cambodia
Indonesia
Foreign
Aid
X
X
X
X
Myanmar
Local authority
contribution
X
Philippines
X
Singapore
X
Thailand
X
Viet Nam
X
X
X
ASEAN Countries with USO Funds
Country
% of USO levy
Who pays?
Who manages?
Brunei
Darussalam
0.2% of periodic gross
turnover
Infrastructure &
Service Providers in
Telecom Industry
Indonesia
1.25% of Gross Revenue
contributed to State
Treasury
All telecom operators
BP3TI under MCIT
Malaysia
6% of weighted net
revenue
All network/facilitiesbased operators
MCMC
Thailand
3.75% of Gross Revenue
minus inter-operator
payments
Licensed Operator
3-5%
Telecommunication
enterprises
Viet Nam
AITI
NBTC
Vietnam Public-Utility
Telecommunication
Service Fund (VTF)
USO Activities
Country
Roll-out
Tele-com
net-work
Operation
of existing
network
Brunei
Darussalam
Community
Internet
centre
IT
Components
X
Indonesia
X
Malaysia
X
Thailand
X
Viet Nam
X
X
X
X
X
Subsidy
Software &
to target
Applica-tion
customer
R&D
X
X
X
X
Training
Program or
HRD
X
X
X
X
X
X
X
X
X
X
Community Internet Centres Model
Country
Central
government
owned
Local
authority
owned
Operator
owned
Local
Entrepreneur
owned
Brunei
Darussalam
Cambodia
X
Indonesia
X
Hybrid
Note
X
PPP
Model
Lao PDR
Malaysia
X
Myanmar
X
Philippines
X
X
X
X
X
Singapore
Thailand
X
Viet Nam
X
X
X
USO in Brunei
24
USO in Brunei
 No formailised USO Programme
 AITI has yet to determine the regulations
for the USPF on the new licensing
framework to supply basic telephony
services to any person in Brunei
 The policy will come to effect when the PTL
has been migrated to the new licensing
framework
USO in Cambodia
26
USO in Cambodia
 Universal Service programme focuses on:
 Improving communications access in rural areas
 Bringing first time telephone service to low income
families in remote rural areas
 Funding for those projects is still in the stage of
policy development
 USO policy is in progress
USO in Laos PDR
28
USO in Lao
 Fewer than 4% households have a telephone
 Less than half of Laos’ districts (58/142) have
fixed telephone services and only urban areas in
half of the provinces are covered by a mobile
cellular signal
 No specific plan for developing universal access to
telecommunications
USO in Indonesia
30
MCIT
•
•
•
•
•
•
•
•
USO in Indonesia
NON TAX STATE INCOME (PNBP)
1.25 % ANNUAL GROSS REVENUE (2009-PRESENT)
MANAGED BY BP3TI (UNDER MCIT)
EARMARKED
DISBURST TO CONTRIBUTORS BY OPEN TENDER
LOWEST SUBSIDY FOR OPEX (ex. PALAPA RING)
REGULATED USER TARIFF
5 YEARS CONTRACT PERIOD
(1 Y DEPLOYMENT + 4 Ys OPERATION)
31
MCIT
2009-2014
5,748
2009-2014
33,824
DERING
&
PINTER
PLIK &
PLIK-S
2011-2016
1,907
2012-2017
746
USO PROJECTS
M-PLIK
Wi-Fi Kab.
NIX
IIX
PALAPA
RING
2012-2017
1,235
2010-2017
33
LOCUS
Villages
Sub Dis.
District
2012-2017
4
District
Prov.
2014
Nation
Region
32
PUSAT LAYANAN INTERNET KECAMATAN (PLIK) FACILITY
MCIT
33
MCIT
M-PLIK FACILITY
34
MCIT
WiFi KABUPATEN
3 PoPs @ District
35
MCIT
PALAPA RING
Existing focus on West & Mid Areas by industry initiatives
36
PALAPA RING
MCIT
Next, East Areas optical fibre backbone
A
B
E
C
D
F
Rute:
1. Ke Papua: Manado – Ternate – Sorong – Fakfak – Ambon – Kendari – Makassar
(A-B-C-D)
2. Utara Papua: Sorong – Manokwari – Biak – Sarmi – Jayapura (B-E)
37
3. Selatan Papua: Fakfak – Kaimana – Timika – Merauke (C-F)
USO in Malaysia
38
USO in Myanmar
49
USO in Myanmar
 USO with objectives to develop rural communications is still in
consideration stage to be mandated in the Telecommunication
Act
 Myanmar implemented many project for telephone, data,
Internet to fulfill the requirement of 7 States and 7 Divisions
USO in Philippines
51
USO in Philippines
 As mandated by Executive Order No. 109 (1993), USO
Programmes provide:
 Basic telecommunications services to unserved and
underserved areas
 To the general public with affordable access to services such
as Internet, e-mail, fax, computer training, distance learning,
online services.
USO in Singapore
53
USO in Singapore
 Info-communications Development Authority Act of Singapore
1999: “telecommunication service are reasonably accessible to
all people in Singapore and are supplied as efficiently and
economically as practicable.”
 There is no USO Fund. Although Singapore has USO policies,
different USO policies are for different service providers. They
are more broadband-based.
USO in Thailand
55
USO in Thailand
Telecommunications Business Act 2001, Section 17
The Commission shall have the duty to provide the following
telecommunications services:
(1) telecommunications services in rural areas, or low rate of return
areas, or any area where there is no or insufficient service providers
or where there is insufficient supply of service to meet the user
demand;
(2) telecommunications services for educational institutions, religious
institutions, medical institutions and other social assistance agencies;
(3) certain nature or types of public telecommunications services for
low-income person as prescribed by the Commission;
(4) services facilitating the use of public telecommunications service
for disabled, children, senior citizen and under-privileged.
USO Master Plan for Provision of Basic
Telecommunication Services (2012-2016)
10 targets planned to achieve within 5 years
1. Not less than 95% of population access
voice services
6. Provision of not less than 500 Internet
centers with speed not less than 2Mbps for
the disabled, youth, the elderly, and
marginal people
2. Provision of 1-2 public telephones per
village in USO area
7. Provision of special communication
system for not less than 100,000 disabled
people
3. Not less than 80% of population access
8. Promotion and development of the
high speed internet with no less than 2Mbps Internet content
4. Provision of the Internet center with
speed not less than 2Mbps in communities,
schools and public health centers in USO
area
9. Provision of emergency numbers
5. Provision of high speed internet to not
less than 50,000 households in USO areas
10. Promotion of Research and Development
of basic telecommunication services and
universal service obligation
USO Policy Framework
Old (2005-2011)
 Pay or Play
 only network provider pay
or play
 4% contribution of net
revenue (Gross revenue
minus inter-operator
payment)
New (2012 onward)




Least cost subsidy through
competitive Bidding Process
All telecom licensees pay
Maximum 3.75% of net
revenue (review every 2 years)
No contribution if service
provider has net revenue
below 20 millions baht
Basic USO
Services
Voice
Data
Community
Individual
Community
Individual
Public
Phone
Mobile/
Fixed
Internet
Center
BB@home
USO in Viet Nam
60
USO in Viet Nam
Before the year
2004
From 2005 up to
now
• No Universal Service Fund;
• Use Internal Cross subsidy
regime to universalize
services
• Universalize
telecommunication services
through (Vietnam PublicUtility Telecommunication
Service Fund (VTF)
USO in Viet Nam
 Universal Services include:
 Standard telephone service
 Standard Internet access service
 Compulsory Services are:
 Emergency communication service
 Telephone number inquiry service
 VTF is a State financial institution under the Ministry of
Information and Communications (MIC)
 USO Fees
 5% of revenue for mobile telecommunication services;
 4% of revenue for international telephone service and
international leased-line subscription service;
 3% of revenue for domestic telephone service and domestic
leased-line service.
USO in Viet Nam
Ministry
1. Guide the implement Program on US;
2. Specify the zone to implement Program
3. Decide the subsidy for each project in
Program.
4. Guide the collect contributions and fund
disbursement
5. Manage and Monitor VTF
Government
Telecommunications
Enterprises
1. Dicide to set up VTF, policies
on Universal service,
1. Pay distributions
2. Appove Program on
Universal Service for each
stage;
2. Implement the projects on
US
3. Decide the contribution
rate
VTF
Roles and responsibilities
USO in Viet Nam
USO Programmes 2005 - 2010
Fixed tele-density in universal service areas:
5 telephone sets per 100 people
By 2010
100% of communes throughout the country
have public telephone service access point;
70% communes throughout the country
have public Internet service access point;
Ensure all citizen are entitled to free
compulsory telecommunication services
USO in Viet Nam
USO Contributions
Total contribution
7.785 billion VND
(~ 380 million USD)
Contribution ratio
 5% of the revenues, for mobile services (3%
from 2008)
 4% of the revenues, for international
telephone service (2% from 2008)
 3% of the revenues, for domestic long
distance telephone service (1% from 2008)
Number of TEs
made contribution
12 Telecommunications Enterprises
(All telcos which legally operate in VN)
3. Program, stage 2005-2010 (con’t)
 Financing of the Program:
The total
funding of the
program
Form of budget
allocation
• 5.200 billion VND
• (≈ 260 milliion USD)
• Assigning TE to implement
plans on provision of universal
service: 2005 – 2007
• Order TE to provide universal
service: 2008 – 2010
66
3. Program, stage 2005-2010 (con’t)
 Results:
Fixed tele-density in universal service areas:
16 telephone sets per 100 people
By 2010
97% of communes throughout the country
have public telephone service access point;
55% communes throughout the country have
public Internet service access point;
Ensure all citizen are entitled to free
compulsory telecommunication services
67
4. Strategy & Plans, stage 2013 – 2020
Content of the Program: 4 component Programs
BB
infrastructure
• To develop the BB
access network in
high cost areas
Emergency
connection
• Emergency
services;
• Fixed phone
directories
services;
• Search, rescue
and disaster
prevention
services
Community
connection
Public
Connection
• To develop,
maintain public
access points in
poor communes
• To provide
service, terminals
for poor
households,
closed-poor
households;
Fishing vessel
Owner
• To connect &
provide Internet
BB services for
state hospitals
and schools
• To provide
connection for the
People's
Committees in 69
poor communes
for Teleconference
68
I
Thank
U
ITU : http://www.itu.int
ITU Asia Pacific : http://www.itu.int/ITU-D/asp/CMS/index.asp
69