Providing affordable broadband – II

Proposal is to let public sector entity acquire/lay optic fibre infrastructure and sell onwards

ISLAMABAD: About two weeks ago I wrote in this newspaper that in order to promote broadband in the country (especially outside main cities), wholesale internet bandwidth in the backbones has to be made available everywhere, at affordable rates, to all those who ask for it.

I further argued that for this the public sector will have to become a provider of wholesale bandwidth over the optic fibre information highways, because private sector providers have competition issues to cater to.

I ventured a step further and proposed that the state-owned National Telecommunication Corporation (NTC) is a suitable candidate to be that public sector wholesale bandwidth provider.



Quite a few friends and colleagues of Pakistani ICT sector offered their comments on this - some in writing, some verbally. Predictably, no one questioned the basic concept, ie wholesale bandwidth should be available at affordable rates, everywhere, to everyone, without any discrimination.

It was also generally agreed that in Pakistan at smaller locations, off the main routes, the only available optic fibre cables belong to one or the other private sector wholesale bandwidth providers, who are not always willing to offer affordable access, particularly to those who could be their potential competitors in the retail end of the internet business.

And if one ventures deeper into rural areas, optic fibre connectivity does not exist at all. Therefore, there is a dire need of widespread optic fibre cable access – access that is affordable and offers equal access to all.

In some African countries like Uganda and Ghana, Google is fulfilling this need of ‘equal access’ fibre networks (albeit in metros) by laying optic fibres and selling cheap bandwidth to whoever asks for it.

Google is a neutral wholesale bandwidth provider there, whose interest lies in filling the optic fibres with bits and bytes. Since Google has no retail business over there, it actively strives to sell bandwidth to local retail broadband sellers at rates affordable for them. A similar ‘neutral’ bandwidth provider is what we also need.

That is where the public sector comes in.

Difference of opinion

The proposal is to let a public sector entity acquire/lay optic fibre infrastructure, then bring wholesale internet bandwidth over it, and sell onwards - to ISPs and telecoms - who re-sell it in retail. Thus, in case of the retail business the entity becomes a facilitator, rather than a competitor, for the private sector.



The difference of opinion arises in whether the neutral wholesale bandwidth provider in Pakistan should be in the public sector or not. There is a lot of scepticism about public sector in general.

The state of current public sector service providers is cited as a reason why one should not entrust it with this “heavy burden”. It may be noted that in most countries the perception about public sector is similar.

However, the trend is towards going back to public sector for such important infrastructure elements like optic fibre information highways.

NTC’s suitability

Some friends and colleagues also expressed doubts over the suitability of NTC as the public sector wholesale bandwidth seller. However, firstly, as stated in the previous article, NTC has now come of age and has shown signs of maturity in the last few years, (it does not mean that NTC does not need to be strengthened).

Secondly, NTC happens to be the only public sector national telecom operator in the country. Unlike all other possible wholesale bandwidth sellers, it has no issues of competition in the retail end of the value chain, simply because it does not operate there. This unique position of NTC would remove one of the barriers to start small broadband businesses in Pakistan.

Some friends opined that a new telecom operator should be created specifically for this purpose. But even then, NTC would still be required to provide data connectivity to the federal, provincial and local government offices, as per its mandate.

Therefore, sooner or later, NTC will have to have its own country-wide optic fibre infrastructure anyway.  In the proposal being discussed, NTC uses that same infrastructure to provide wholesale bandwidth to the last-mile private sector operators.

Consequence

If affordable bandwidth becomes easily available, then, it would accelerate deployment of last-mile broadband networks by large telecoms, even in areas that are not so lucrative.

It would also enable small local entrepreneurs to start last-mile fixed broadband ISP businesses in mohallahs and communities, using the free unlicensed Wi-Fi spectrum.



This would be similar to small cable-TV operators who mushroomed all over the country when cable-TV picked up. In turn, this would help all types of small and medium businesses, who would generate much-needed jobs in the under-served locations of the country.

Availability of affordable, equal access, wholesale bandwidth from a neutral public sector optic fibre network operator (like NTC) can be enormously beneficial to the nation.

The writer is former CEO of the Universal Services Fund and is providing ICT consultancy services in several countries of Africa and Asia

Published in The Express Tribune, September 12^th, 2016.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.