Page 39 - Trends in Telecommunication Reform 2016

At the technical level, open access services can be they are fair, equitable, transparent, competitive
provided at: and cost-effective. Privately funded broadband Chapter 1
projects, however, are not bound by these
• layer 0: civil infrastructure (ducts, poles, principles, although many of the best practice
towers); principles still apply. These principles are described
in more detail in Annex 1.
• layer 1: transmission media (fibres, copper);

• layer 2: transmission point-to-point 1.5 Alternative approaches to funding
connections; and broadband networks

• layer 3: Internet Protocol. The previous sections in this report have looked at
strategies governments and operators can use to
Open access at one level typically allows invest in publicly subsidized broadband projects –
competition at higher levels. The principle of open often PPP projects. The methods privately owned
access can be applied to a number of investment operators use to raise funds are relatively well
models. Managing authorities will need to decide known and, therefore, not discussed in this report.
when (and at what levels) to avoid network However, increasing numbers of existing operators,
duplication and when competition – including new entrants and financiers have developed
potential infrastructure "over-building" – can be alternative funding approaches for broadband
encouraged. These decisions should take place network investments. To examine such alternative
well in advance, based on analysis and modelling. approaches, we have selected examples from four
investor categories, as set out in Table 1.8.
In terms of wireless networks, there is insufficient
international experience to suggest what may Moreover, we have provided a detailed case study
constitute best practices in wholesale, open- for of each of these investor categories. Each case
access, wireless networks. Emerging projects may study provides the motivation for the financing
yet develop best practices, but such networks face approach, the role of the regulator in attracting
significant organizational and strategic challenges. investment, and an overview of potential barriers
to investment.

1.4.4 Procurement
1.5.1 Existing market players
Due to the nature of PPP projects, which involve
public funding, they are conducted normally as Operators traditionally have invested in broadband
public network procurements. Whether financed infrastructure in commercially viable areas using
through a universal service fund or by other their own capital investment funds. In some
means, such projects should be undertaken cases, operators have generated funds by selling
according to best practice principles, ensuring de-commissioned network assets (e.g. copper

Table 1.8: An overview of investor categories and corresponding case studies
Investor category Case study Existing parties

Existing market players MGTS, Russia MGTS

New market entrants Google Fiber, USA Google Fiber
Google Fiber, Uganda Google Fiber

New financiers SIGFOX, France Elliot Management
Seacom, Africa Convergence Partners
Asia–Pacific Gateway, Asia Facebook

Not-for-profit investors Community broadband, Germany Various Communities

Source: Analysys Mason, 2015

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