The World Bank’s Plan for Regional Open Access Infrastructure

In March 2007, the World Bank announced the approval of $164.5 million financing for Burundi, Kenya and Madagascar as the first tranche of the $424 million Regional Communications Infrastructure Programme (RCIP) for East and Southern Africa. CIPESA spoke to an RCIP team coordinated by World Bank RCIP Team Leader Laurent Besancon. What follows are excerpts:

Q. The World Bank has just announced financing of the initial tranche of $164.5 million. When will this money be available, and when is it hoped the projects it is going to fund will materialise?

The timing for the disbursement of the funds approved end of March may vary between countries covered by Phase 1 of the RCIP. It is nonetheless expected that disbursement will start in the course of July 2007. The activities financed for the Phase 1 of RCIP are expected to materialise over the next four years (Burundi and Madagascar) and next five years (Kenya), which is the planned duration of the respective projects. It is expected that the first two years will be particularly active based on the current momentum for swift implementation.

Q. Why are you financing the building of terrestrial fibre optics while the region does not have access to international fibre? What benefits will this create?

Based on the current number of international submarine cable initiatives aimed at connecting East and Southern Africa, as well as based on their advancement, it is fair to assume that the region will have submarine cable connectivity by 2009. RCIP supports countries in the region to ensure they will be able to take full advantage of that connectivity when it is available. RCIP also supports countries in accelerating terrestrial cross-border connectivity.

Q. Who will this money be given to in the various countries, and what exactly are they going to do with it? 

Financing in Burundi and Madagascar is notably aimed at accelerating the roll-out of backbone infrastructure. This will be carried out in cooperation with telecommunications operators. Although the nature of the Public Private Partnerships will vary in both countries, the resulting infrastructure will be operator-run on an open access basis.

Financing in Kenya is notably aimed at financing (i) capacity purchase schemes for Government users, Universities (through the Kenya Education Network – KENET), and the Business Process Outsourcing industry; (ii) a government virtual private network and (iii) key eGovernment activities which are expected to increase transparency and quality of service provided to citizens and businesses.

Q. How does this programme feed into ongoing and planned fibre programmes in the region, both by governments and private entities? 

The activities financed under RCIP, including the ones related to fibre connectivity in Burundi and Madagascar, have been designed by the respective Governments. Furthermore, the emphasis on leveraging investment by private entities will ensure consistency with their programs. As an example, five fixed and mobile telecommunications operators are participating in the formulation of the related public-private partnership in Burundi where activities are most advanced.

In Kenya, capacity purchase schemes financed under RCIP will take the form of capacity requirements being tendered out (i.e. any operator which can fulfil the capacity demand expressed can bid).

Q. Does this programme complement EASSy? Are they related at all? 

While a separate proposal by International Finance Corporation (IFC is the private sector arm of the World Bank Group) is focused on the EASSy submarine cable, the World Bank-financed RCIP operation focuses on the terrestrial elements of the overall regional communications infrastructure and on activities generating demand for the infrastructure being put in place. As such RCIP and EASSy are complementary. It is important to note that RCIP will be equally complementary to EASSy, SEACOM, TEAMS or FLAG Africa, should any of these East Africa submarine cables materialise.

Q. Will the fibre built by RCIP financing be subjected to Open Access principles? Who will run this fibre, and how will the Bank ensure it is accessed at affordable terms?

One of the founding principles for World Bank financing under RCIP is indeed Open Access, broadly defined as an equal opportunity for operators to have unfettered access to given infrastructure or services under similar terms and conditions. It is expected that the principle of Open Access as well as cost-based pricing will be enshrined into the Public Private Partnerships arrangements referred to above.

Q. What is your take on the various marine cables (besides EASSy) which are planned on the east coast of Africa? Do you think all these planned cables will materialise, and if they do, will they all be feasible? 

We do not expect all the current initiatives to necessarily materialise in the current timeframe but we note that the resulting competition means the various initiatives are racing to be the first to materialise. We believe this momentum is positive. It means the region will be connected by 2009. Should there be more than one cable, this would mean additional downward pressure on prices, which, from the policy angle, would be a welcome development.

Q. Why were Kenya, Madagascar and Burundi specifically chosen for this programme? And are there ways in which other countries in the region will benefit from the programme? 

The countries participating in the first phase of RCIP World Bank operation (Kenya, Burundi and Madagascar) were chosen based on readiness and based on the timing of their official support request addressed to the World Bank (from their respective Ministries of Finance), which showed: (i) ownership of the activities beyond the Ministry of Telecommunications or its equivalent; (ii) the desire to work with the World Bank Group; and (iii) the activities to be financed are at the core of the country’s priorities. It is also worth noting that the three countries have subscribed to an open access platform and have advanced considerably in terms of ICT sector liberalisation and sector reform, both of which will enhance the impact of RCIP.

Overall, RCIP is open to other countries including: Angola, Botswana, Comoros, DRC, Djibouti, Eritrea, Ethiopia, Lesotho, Malawi, Mauritius, Mozambique, Namibia, Rwanda, Seychelles, Somalia, South Africa, Sudan, Swaziland, Tanzania, Uganda, Zambia, and Zimbabwe, provided these countries are eligible for World Bank financing at the time of request for support.

Q. In your view, what needs to be done to improve the uptake of Internet in East/Southern Africa? And besides this programme, are there other initiatives the World Bank is engaged in/plans in this regard? 

We believe uptake of Internet in the region will be seriously boosted provided (i) the cost of Internet access is dramatically reduced; (ii) cost of personal computers available in the region is reduced; and (iii) the literacy challenge is tackled.

RCIP is targeting the cost of Internet access by contributing to solve the connectivity issue. For Burundi and Madagascar, RCIP will also finance domestic Internet Exchange Points so as to allow national internet traffic to remain national (instead of having to transit through Europe or the US, consuming expensive international bandwidth along the way). In Kenya, RCIP will also support the roll-out of “digital villages”, essentially a one-stop shop for e-government services and Internet access.

Q. One of the stated outcomes of RCIP is that “bandwidth costs are projected to decline more than tenfold from between USD 5,000-8,000 per month for 1 Megabit today to around US$150 per Megabit in 2008 at retail level, and to rapidly decline further.” What other initiatives are planned under RCIP to help achieve this? 

RCIP will accelerate national infrastructure roll-out, encourage traffic demand and support eGovernment applications. The proposed RCIP is designed to: (i) accelerate the roll-out of the terrestrial regional and related national backbone infrastructure to extend the reach of submarine cable traffic to consumers in all the countries of the Eastern and Southern region, rather than only the coastal countries; (ii) finance purchase of capacity for use by Government and by other targeted users (schools, universities, hospitals, etc.); and (iii) finance related activities such as eGovernment.

We expect that the combined outcome of RCIP-financed activities, availability of submarine cable connectivity, similar connectivity efforts funded by other development partners, private sector entities and Governments will be the commoditisation of international bandwidth capacity.

Q. How do you plan on stimulating demand for the infrastructure which RCIP is putting into place? 

RCIP support is tailored to the individual country’s request. For instance, in the case of Kenya, the Government would like to use RCIP to finance capacity purchase schemes for targeted user groups (Government users, universities, Business Process Outsourcing industry), as well as to accelerate the roll-out of digital villages. – May 2007

0 comments… add one

Leave a Comment