Page 48 - Trends in Telecommunication Reform 2016

1.5.5 Investments in disruptive technologies is being driven by an increase in take-up and usage
of higher-layer services and applications. Without
The term disruptive technologies refers to technical broadband, it would not be possible to run the
innovations that are being developed – but not yet higher-layer services and applications. Given this
in full deployment – that may offer an alternative tight relationship, and in the context of investment
to current technical solutions for the provision strategies, this section reviews what financial
of broadband services. Investing in disruptive innovations are being used to fund investments
technologies can be high-risk, as it may be difficult in services and applications that depend on
for new technologies to challenge well-established broadband connectivity.
ones that have been tried and tested. Disruptive
technologies may also face implementation Table 1.9: Types of financial innovations and
barriers due to regulatory concerns or from related case studies
market players that feel their business model is
threatened. Therefore, the financial backers of Financial Executing
disruptive technologies tend to be non-traditional innovation Case study parties
operators looking for alternative, low-cost means Crowdfunding Star Citizen, USA Individuals
to address specific connectivity issues (e.g., in
remote areas). Pebble, USA Individuals
Shyp, USA Private
investors
One such technology that is gaining prominence
is the transmission of data using "white space" Pension funding Hipcom, UK Business
in the UHF spectrum range. The term TV white owner
spaces usually refers to unoccupied portions of
spectrum in the VHF/UHF terrestrial television Bitcoin currency mexBT, Mexico Seedcoin
frequency bands in some geographical areas. This Charity or non- Aentropico, INNPulsa and
approach can address issues such as the lack of profit institutions Colombia Fundación
available spectrum, because it is licence-exempt . Bavaria
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It also benefits from the strong propagation
characteristics allowed by the UHF spectrum, Source: Analysys Mason, 2015
meaning fewer base stations are required to cover
a given area. These financial innovations are alternatives to
other, more common financing sources such as
The interest in white-space technology is not bank loans, angel investment, venture capital or
confined to any particular region. Pilot projects private equity. Those are all well-known means of
have been launched across the world for different financing and therefore are not discussed in this
types of applications, such as connecting remote report. The section below provides a description
health units in Bhutan and providing Internet of each new funding approach, followed by
access on a ferry boat in Scotland . Some examples of companies that have benefited from
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countries have staged trials of TV white-spaces that type of investment. Note that regulators
operations. Other countries – such as the US and have played a minimal role in deploying higher-
UK – are developing TV white-space regulations . layer services and so the role of regulators is not
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included in this section.

1.6 Financial innovations in funding
services and applications 1.6.1 Crowdfunding
Crowdfunding is a significant and recent
So far, this chapter has looked at funding strategies financial innovation that has lowered investment
used by investors and governments to finance barriers, making investment more accessible
broadband networks. But the digital ecosystem
has evolved so that there is a very tight and to entrepreneurs. As the name suggests,
crowdfunding raises investment from a large
direct relationship between the development number of people over the Internet on a
of broadband infrastructure and the evolution crowdfunding website such as Kickstarter,
of higher-layer services and applications. For RocketHub or AngelList. It is also often called
example, the demand for broadband infrastructure
"peer-to-peer lending."

30 Trends in Telecommunication Reform 2016