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operate a broadband network on its behalf. The outsourcing deal. Instead, the private sector
government typically funds the entire network constructs the broadband infrastructure and
and the infrastructure remains in government operates the broadband network on behalf of the
ownership. government, in return for payments at pre-agreed
milestones.
The private company normally gets a contract
(after a competitive tender) for a wholesale, Although the government is fully responsible for
open-access network. It may also be required to financing and financial risk, this approach does
market the wholesale services to other Internet give it a greater responsibility and control over
Service Providers (ISPs), and in some cases to the design of the network and the technical-
offer retail broadband services as well. Contracts and service-performance criteria. Typically, the
typically last between 10 and 15 years, after government defines clear performance milestones
which a competitively procured contractor may be for the private operator (such as network roll-out
appointed to operate the network. timescales, take-up and service levels) as part of
the contract. Failure to meet these terms may
Most, if not all, funding for this approach needs result in fines or other penalties.
to come from the public sector. Unlike the private
DBO and JV investment models, the private sector Two examples of private DBOs are set out in
does not make any financial investment in a public greater detail below.

Table 1.4: Selected examples of public outsourcing

Name of private DBO Description
National ICT Broadband Backbone (NICTBB), Tanzania 38 National core fibre network built across Tanzania. (See case
study below)

City of Johannesburg Broadband Network Project (South Fibre network operated across Johannesburg by the
Africa) 39 government. However, in a recent development the city
cancelled the contract and is proposing to convert it into a
public DBO. (See case study below)

Auvergne (France) 40 This model leverages the expertise of the private sector,
while ownership remains in the public sector. The private
operator receives an income to run the network for ten
years.

Metropolitan Area Networks (Ireland) 41 Sells open-access, active and passive, wholesale services to
operators in areas that do not have adequate private-sector
broadband provision.

Shetland SHEFA 2 Interconnect Project (Scotland) 42 This project aims to provide an adequate backhaul network
in the Shetland Islands in areas where such infrastructure is
currently unavailable.
South Yorkshire (UK) 43 Local authorities invested in an FTTC network, with a
partnership arrangement for network management.
(However, this initiative is no longer running and has
reverted to a private DBO.)
DORSAL (France) 44 A collection of local authorities invested in network
backbone, DSL and WiMAX services.
Project Isizwe municipal Wi-Fi (South Africa) 45 The private-firm Project Isizwe is being contracted by
several municipalities to deploy Wi-Fi hotspots in public
buildings and schools.

Western Cape Government broadband (South Africa) 46 The Western Cape Government has outsourced the
deployment and management of a network connecting all
provincial government buildings to Neotel.

Source: Analysys Mason, 2015

12 Trends in Telecommunication Reform 2016