93836 A quarterly journal on public-private partnerships FINDING THE RIGHT BROADBAND PPP: In this issue What’s key for emerging economies? REFORM HAS ITS REWARDS: Telecom takes off in Myanmar E-GOV EXCELLENCE: Models from Colombia, Ghana, India, and Portugal “KNOW WHAT YOU KNOW”: Creating a government technology strategy CLOSING THE GAP: Facebook and Intel connect the unconnected CONNECTIVITY ISSUE 15 Oct 2014 Issue #15 – October 2014 A quarterly journal on public-private partnerships World Bank Group Public-Private Partnerships 1818 H Street, NW • Washington, D.C. 20433, USA ifc.org/handshake • handshake@ifc.org Editorial Tanya Scobie Oliveira • Alison Buckholtz Art & Design Jeanine Delay & Victoria Adams-Kotsch Digital Strategy Jeanine Delay Disclaimer This journal was commissioned by the World Bank Group Public-Private Partnerships. The conclusions and judgments contained in this report should not be attributed to, and do not necessarily repre- sent, the views of the World Bank or its Executive Directors, or the countries they represent. The World Bank does not guarantee the accuracy of the data in this publication and accepts no responsibility for any consequences of its use. Cover: Illustration © esenkartal/istockphoto. Used with permission. Further permission required for reuse.; Photos (from left to right): © World Bank; © pixelfusion3d/istockphoto. Used with permission. Further permission required for reuse.; © cotesebastien/istockphoto. Used with permission. Further permission required for reuse.; Jorge Gobbi/Creative Commons license, creativecommons.org;licenses/by- sa/2.0; © Cherie Blair Foundation.; © Charlotte Kesl/World Bank. “Only connect,” E.M. Forster’s plea to readers not to live In this issue their lives in fragments, could just have easily been uttered by a telecom company in 2014 as it was by Forster in 1910. But today, connectivity—the theme of this issue—connotes the physical networks that allow people to communicate as much as it does the ability to interact with another per- son or the services one receives from an institution or organization. Public-private partnerships (PPPs) in Information and Com- munication Technology (ICT) can connect us in all of these ways. Just as important, it can connect those who are still unconnected, and might remain so without intervention. Throughout this issue, as we see how transformative ICT has already been in the developed world, we acknowledge how far there is to go until everyone is given the same digital resources to succeed. We hear first-hand from the head of Facebook’s new Internet.org initiative, which has launched its campaign to bring free Internet access to the base of the pyramid. Other articles and interviews demonstrate how PPP-powered ICT successes advance the economy, improve peoples’ health, promote gender equal- ity, and provide educational tools. No government can afford to ignore technology, and the momentum behind ICT is unrelenting. The public sector must adopt a strategy for managing it. Smarter infrastruc- ture is better infrastructure, and technology partnerships will deliver better value for money over time. Laurence Carter, Tanya Scobie Oliveira, Senior Director Editor PUBLIC-PRIVATE PARTNERSHIPS | 1 Illustration © bubaone/istockphoto. Used with permission. Further permission required for reuse. Features 68 Infrastructure Finding the right broadband PPP | 14 Bringing broadband to the Middle East | 18 Myanmar connected | 26 Share infrastructure, expand the Internet | 30 Services 26 Connecting the unconnected | 38 In Ghana, “P” is for patience | 48 Portugal’s eEscola earns top marks | 52 India’s ICT partnerships transform government | 56 ICT in frontier markets | 64 Mind the [gender] gap | 68 Connectivity and the Millenium Development Goalss | 76 In this issue 2 | WORLD BANK GROUP Columns Interviews Chris Weasler: Closing the connectivity gap | 34 PERSPECTIVE Insights & opinions Susan Crawford: “Know what you know” | 44 Connectivity equals Diego Molano Vega: A “virtuous” Plan Vive Digital | 60 opportunity | 06 MONEY TALKS Financing & Funding PPPs 34 Guiding the rushing river of ICT progress | 10 LEGALEASE Law & legislation, decoded The difference is in the details | 42 INSIDE INFRASTRUCTURE Commentary on current events The old man & ICT | 74 FAST FACTS What’s connectivity worth? | 80 PUBLIC-PRIVATE PARTNERSHIPS | 3 Contributors 44 60 Susan Crawford, co-director, Berkman Center for Internet & 72 Diego Molano Vega, Minister of Society, Harvard University Sevi Simavi, CEO, Cherie Information Technologies and Blair Foundation for Women Communications, Colombia Mavis Ampah Pierre Guislain is a Lead ICT Policy Specialist with the Trans- is the Senior Director of the Transport and ICT port and ICT Global Practice at the World Bank. Global Practice at the World Bank Group. Yann Burtin John Kjorstad is a Senior Telecom Specialist at the Multilateral leads infrastructure research and business Investment Guarantee Agency (MIGA). support for KPMG Global Services. Jeff Delmon Henriette Kolb is a Senior PPP Specialist in the PPP Group is Head of the Gender Secretariat at IFC. at the World Bank. Leonor Gonzales Koss Benoit Denis is a Consultant in PPP advisory services in is a Digital Economy economist at the the EU’s Southern Neighbourhood at the European Investment Bank. European Investment Bank. Mario Franco Tenzin Norbhu is President of the Foundation for Mobile is Regional Coordinator for ICT in the Communications, leading the team that South Asia and East Asia & Pacific regions developed and manages eEscola in Portugal. at the World Bank. 4 | WORLD BANK GROUP Shashank Ojha INTERVIEWEES is Senior e-Government Specialist at the Susan Crawford World Bank. is a Visiting Professor at the Harvard Law School Siddhartha Raja (2014) and a co-director of the Berkman Center is an ICT Policy Specialist at the World Bank. for Internet & Society at Harvard University. Michel Rogy Diego Molano Vega is an ICT Policy Advisor at the World Bank. is Colombia’s Minister of Information John Roman Technologies and Communications and the is Director of Broadband and Regulatory creator of Plan Vive Digital, the country’s Policy at Intel Corporation. national technology plan. Carlo Rossotto Chris Weasler is Regional Coordinator for ICT at the is Head of Global Connectivity for Internet.org, World Bank. the Facebook-led alliance focused on driving affordable Internet adoption globally. David Satola is a Lead Counsel and ICT Legal Advisor at the World Bank. Sevi Simavi is Chief Executive Officer of the Cherie Blair Foundation for Women. Randeep Sudan is a Practice Manager with the Transport and ICT Global Practice at the World Bank. Jose Toscano is the Director General of the International Telecommunications Satellite Organization. Francesco Totaro coordinates PPP advisory services in the EU’s Southern Neighbourhood for the European Investment Bank. PUBLIC-PRIVATE PARTNERSHIPS | 5 CONNECTIVITY EQUALS OPPORTUNITY PPPs narrow the “Broadband Gap” 6 | WORLD Illustration BANK GROUP Used with permission. Further permission required for reuse. © 3dmentat/istockphoto. PERSPECTIVE By Pierre Guislain, World Bank You don’t need to be a grandparent or even have a particularly long memory to recall a time when information and communications technology (ICT) devices were luxuries only a few could afford, if not something lifted entirely from the pages of science fiction. Reform of the ICT sector happened fast, both in broadband and mobile, and we all feel it in our personal and professional lives. The extraordinarily rapid uptake of mobile telephony in developing countries is the most compelling element of the ICT story, but it’s only partly about the technol- ogy itself. The real plot twist lies in why reform took off so quickly. Simply put, the incumbents did not see mobile services as threatening. Telecom compa- nies thought of it as a fancy, add-on service that would be useful for rich people but unthreaten- ing to the standard business model. However, PUBLIC-PRIVATE PARTNERSHIPS | 7 a quick uptake among poor people. (Today, the the new technology was able to fill gaps in mobile global penetration rate hovers around 93 countries where there was no service at all, and it percent.) What we didn’t realize back then is that was able to make very rapid inroads. Elsewhere, connectivity—in the form of mobile phones— people would have gone through a more tradi- would give poor people opportunities they didn’t tional rollout of fixed network and then mobile; have before. For example, if you are a craftsman in developing countries, mobile became the in Africa before mobile services came your way, main service because incumbent service was so you’d have to go to a client’s home to ask if they poor. Mobile moved in because the incumbents had a job for you; potential clients didn’t have a had not done their job. way to find you when they needed your service. Cellphones provide this immediate contact and This shows that the most important element of the ability to provide a service in real time. Since progress in ICT is the creation of an environ- most labor in developing countries is informal, ment where competition can flourish. Public- the way they get work is less structured and private partnerships (PPPs) are key players in the potential for having access to employment this chapter of the ICT narrative. We see this in opportunities, like contracts or jobs, is increas- articles and interviews throughout Handshake, ingly dependent on cellphones. The overall which examines PPPs in broadband and mobile/ growth story in many low income countries can telecom (which together comprise our defini- be attributed in part to the rapid expansion of tion of ICT) and the services this infrastructure cellular services. Success doesn’t follow simply makes possible. In other words, we’re looking at because people use cellphones; they get oppor- PPPs whose infrastructure creates connections tunities, productive opportunities, through their and whose services deliver connectivity. access to telephones. That’s the first wave of ICT expansion. PPPs PUSH COMPETITION With PPPs in ICT, the number one issue is The second wave of ICT expansion came with competition: is there a pro-competitive environ- access to financial services. The best known case ment for new technologies? Will innovative is M-Pesa in Kenya, but there are many others approaches be rolled out? Let’s look at the first that use nontraditional platforms and mobile two waves of the ICT revolution, which set the services as the distribution network. With this, scene for PPPs. the potential for services that reach poor people in slums or rural areas has increased dramatically. Twenty-five years ago, when mobile rollout We’re not just talking about traditional commu- began, it was seen as a substitute for fixed nications service, but other value-added services service; no one expected that it would see such that can be delivered over the air and bring a 8 | WORLD BANK GROUP deepening of the market along with lower costs. prosperity. We focus our attention specifically on Mobile health and education services, which are PPPs for expansion of broadband in the Middle profiled in these pages, have impacted peoples’ East and North Africa region, where demograph- lives in a number of positive ways. ics and current events underscore the need. Here and in other frontier, fragile, and high-risk markets, a PPP approach may be the only way to bridge the digital divide. Development agency Success doesn’t follow simply support can facilitate cross border regional solutions and create an environment that allows from increased cellphone investors to be comfortable. MIGA’s explanation penetration, but from the of how mitigating the political risk of invest- new opportunities (access to ments can contribute to ICT access delves into this in greater detail. work, services, finance, and information) made possible by If reaching critical mass with broadband was widespread cellphone availability. easy, companies would have done it. The most successful PPP approaches to connect people provide a framework whereby the government can invite companies to develop these networks. Today, we’re in the midst of the third wave of Alternately, governments might provide some ICT expansion: broadband. It’s a huge challenge type of financial support where it might not because it’s a huge need, and PPP approaches can be commercially viable, or some comfort or deliver solutions. The backstory has two parts: risk guarantees that would encourage people to One, in many countries, the networks were invest. If broadband is to reach the UN Broad- started by public sector entities, but by and large band Commission’s target of getting online 50 these do not have the capital or expertise needed. percent of the population in developing coun- Two, competition remains a key principle to get tries (this corresponds to 1 billion additional new entrants in. (This is a problem everywhere, citizens), it will require major investments over not just developing countries. In fact, the U.S. a short time, significant innovation, and creative FCC chairman has issued a significant statement financing and operating models. that the U.S. is behind in broadband due to a lack of competition.) Several articles tackle the best way to close the “Broadband Gap,” includ- ing a piece on how sharing infrastructure can boost private investment and enhance regional PUBLIC-PRIVATE PARTNERSHIPS | 9 GUIDING the rushing river of ICT PROGRESS WHY GOVERNMENT ROLES IN PPPs MATTER For private financiers, official government sup- inefficient to try to push forward something that port to information and communications tech- has its own momentum. Like a rushing river, the nology (ICT) projects might seem like trying to naysayers conclude, ICT needs no help advanc- push water downhill. After all, isn’t ICT incred- ing down its inevitable course. ibly profitable? What’s the point of a PPP in this sector, anyway? Here’s the rest of that familiar It sounds reasonable in theory, but in practice, argument: Government should stay out of the that approach just doesn’t work. The government way and let the private sector carry forward the needs to guide the river down the best course communications sector; it is a waste of effort and for the citizens it serves, building a weir or mill 10 | WORLD BANK GROUP MONEY TALKS By Jeff Delmon, World Bank to help the river provide maximum benefits to the people who need it. And, just as water is the ments. These activities also provide cost savings foundation of life, communication technolo- for the operators that should translate into better gies are necessary to prosper in today’s world. pricing for consumers, and therefore better Knowledge is power. And specifically, access to penetration of ICT services. markets is improved by mobile phones, as is access to banking services, finance, investment AS CAN PPP FIBER opportunities, and education. Successful ICT strategies usher in jobs, empowerment, and BACKBONE... economic growth. ICT services can be significantly improved by the installation of a backbone of fiber optic REGULATORY TOOLS CAN cables allowing increased capacity and speed of service. In developed markets, ICT operators HELP... install their own backbones. However, operators Governments can use regulatory powers to avoid may not be willing to undertake the expense ICT monopolies and improve efficiencies. We of installing such a backbone in developing see a great example in the Democratic Republic countries and more remote areas where revenues of Congo (DRC), which has an open market may be less obvious. Here, government can use and six mobile carriers. The DRC has 13 times public-private partnerships (PPPs) to make land as many customers per 1,000 people as does available and to bring operators together to Ethiopia, which has similar per capita income install such a system—possibly on an open access levels but only one carrier. basis. This might equate to government build- ing canals to bring the river to those parts of the Government can also encourage efficiency where country with restricted access to water. markets might not. When several competing companies wish to install fiber optic cables, for Burundi provides a good example. Here, the instance, government officials may require those government entered into a PPP with a consor- companies to install common facilities, such as tium of local operators to build out and operate ducts and street furniture, to reduce the incon- a fiber optic backbone, based on government- venience to the public. Similarly, when installing provided land and a government pre-purchase mobile networks, competing operators may wish of capacity from the system to secure financing. to install separate masts for their own purposes, Government support was specifically linked to but laws can mandate mast sharing arrange- extension of the network to lesser developed PUBLIC-PRIVATE PARTNERSHIPS | 11 of services can be developed through PPPs. areas of the country that would not normally E-procurement enables the procurement of justify the investment of operator funds. goods, works, and services by a government through an Internet-based platform, which lends itself to a PPP solution. When properly designed, it provides opportunities for a wider Governments can use regulatory spectrum of the private sector to participate in powers to avoid ICT monopolies government procurement. These types of PPPs and improve efficiencies. We see are challenging because of the requirements of software updates, new technologies, and chang- this in the Democratic Republic ing requirements. Instead of rushing water, this of Congo, which has an open is more like the water at the bottom of the well: market and six mobile carriers. sometimes a PPP is needed to draw the water up and put it to good use, especially where the soil is thirsty but the area is not well-resourced. Given the developmental and growth impacts of Haiti offers another good glimpse of the power ICT, such forms of PPP are particularly viable of PPP. Here, the privatization of the telco was and can provide significant value for money. combined with a fiber backbone developed on a PPP basis, which commercial incentives alone might not have achieved. In the South Pacific, AND NOW FOR THE small islands work together with partners like the CHALLENGES World Bank to create PPP arrangements for sub- While the benefits of ICT PPPs are clear and the marine cables and backhaul to different isolated need is huge, the challenges, as with any PPP, are island nations, where private ventures might significant. not be tempted. Similar structures were used to tempt submarine cable networks ringing Africa • In developing countries and economies, to link to some of the least profitable countries. there are those who benefit from the lack of Output-based subsidies have proven successful information made available to the public. in difficult terrain like Nepal, and for vast land They may seek to undermine the relation- masses like Mongolia. ship between the new telco services and their customers, trying to lock in clients to AND LOTS MORE… financing, input supply, or other relationships ICT requirements of government, hospitals, that would deny them the benefits of the schools, universities, offices, and a variety new information. In other cases, they seek to 12 | WORLD BANK GROUP dominate access to new capacity, buying up project company to keep prices high, or to capacity, or ensuring pricing is unaffordable. delay extension of the network to additional These can act like ill-placed river walls that less developed areas. But fiber optic cables divert water away from those areas that need represent less of an absolute cost than would, it most in order to benefit from the drought. say, extra lanes on a road, or extra capacity When financing such projects, a full stake- for a power plant, and hence governments are holder assessment can identify such interest often tempted to insist on such an inefficient groups and allow preventative measures to investment. reduce their influence. Open access regimes can help to keep pricing at a sensible level All of these challenges can be overcome with and assure that access is well distributed. careful preparation, a well-structured agree- ment, and the good-faith desire that ICT should • Incumbent telcos can either be a force for serve all citizens. This is the best response to good or operate like a mighty boulder in those looking at the Internet revolution from the middle of the river, sabotaging sailors’ the outside who may be thinking “water, water best efforts at navigation. In one country, everywhere, nor any drop to drink.” the recently privatized telco offered to be a core investor in a PPP for communications, Illustration on page 10 © Olga Yakovenko/istockphoto. Used with only to undermine the structure, withhold permission. Further permission required for reuse. its equity share, change the rules at various times during project development, and finally lobby for new regulations that would under- mine the very deal it was supporting. The government supported the telco’s involve- The single biggest ment, only to later expend significant time problem in and money to manage it. communication • Government “optimism bias” plays an even is the illusion that more important role in ICT PPPs where it has taken place. relative costs are lower. In a fiber optic backbone, multiple ducts will normally be —George Bernard Shaw, installed to meet future demand. However, Leadership Skills for Managers the addition of extra fiber optic cables would impact the project’s financials and can undermine the benefits sought by forcing the PUBLIC-PRIVATE PARTNERSHIPS | 13 finding the right BROADBAND PPP COMPETITION IS KEY FOR EMERGING ECONOMIES Choosing a broadband public-private partnership (PPP) is a multi-stage process. Once the scope and type of PPP are defined, examining the legal and regulatory framework can help streamline the decision-making process. By Michel Rogy, World Bank 14 | WORLD Photo BANK GROUP © ARICAN/istockphoto. Used with permission. Further permission required for reuse. INFRASTRUCTURE Most countries in the world understand that benefits for end users, both in terms of quality broadband Internet is critical to becoming a and prices. knowledge-based economy, central to foster- ing sustainable economic development and job creation, and strategic to the goals of reducing poverty and boosting shared prosperity. How- Competition is the driving force ever, making broadband Internet ubiquitous and for accelerated and sustainable affordable remains challenging. While Internet telecoms market development. access in urban areas can be expected to be financed primarily by the private sector, there are considerably greater challenges in extending coverage to less populated areas. Consequently, it is key to ensure right from the outset that the scope of the broadband PPP does In the global race for increased broadband pene- not reduce competitive dynamics. Broadband tration, public-private partnerships (PPPs) are an PPPs should focus on infrastructure that the ever more useful instrument for implementing private sector would not do alone for quite some fiber optic projects required to carry the grow- time, either on a stand-alone basis or by engag- ing broadband Internet traffic. Lessons learned ing voluntarily into some form of infrastructure from the World Bank’s lending operations can sharing to reduce investment costs. In developed guide officials on how PPPs can facilitate new countries, authorities have set up so-called infra- fiber optic broadband networks in emerging and structure databases to keep track of existing and developed economies. planned fiber rollout, and agreed on an appropri- ate time horizon (typically around three years) to DEFINING THE SCOPE OF THE identify areas where the private sector is consid- ered unlikely to invest. Similar principles should BROADBAND PPP be applied in developing and emerging countries Competition is the driving force for accelerated by consulting operators in a transparent process. and sustainable telecoms market development. This would involve discussion of planned fiber The experience of mobile communications, optic investments in their strategic plan, which developed in most countries in a competitive often spans three to five years. environment, has allowed developing and emerg- ing markets to reach levels of penetration similar In some small or fragile states, this may lead to to those of high-income countries in a short a need for a PPP for international fiber connec- period of time. Competition triggers private tivity in the form of a submarine cable landing investment and incentivizes operators to be station that the private sector is unable to finance more efficient. As a result, it ensures maximum on its own. When authorities are striving for PUBLIC-PRIVATE PARTNERSHIPS | 15 Public Owns & Operates Assets Public-Private Partnership Utility Restructuring Management & Civil Works Leases/ Corporatization Operating Service Contracts Affermage Decentralization Contracts Low Extent of Private Sector Participation national fiber connectivity to all provincial These PPPs can take a variety of forms. For capitals and borders to create a national back- example, in Mauritania, lease/affermage and bone to support broadband traffic throughout design build operate PPPs were the two forms the territory, a PPP on some or all missing fiber evaluated to fill the missing links of the national optic links may be advisable. fiber backbone. In the Democratic Republic of Congo, lease/affermage and concessions were the Finally, there will also be a need to expand best fitting PPP forms assessed. Analysis of pros broadband in rural or remote areas using public and cons in the specific country context should subsidies. In this case, it’s necessary for the PPP be conducted in a transparent manner. to ensure that public objectives are met. Avoid- ing the creation of a digital divide, which exists The decision on the type of broadband PPP is in many developed countries, is key. easier once a reasonable consensus on the busi- ness case has been achieved. Because broadband BEST PPPs FOR RISK SHARING Internet is a new service in many developing Once the scope has been defined, selecting the countries, demand is uncertain and growth appropriate type of PPP is important. The deci- cannot be reliably predicted. This is particularly sion should be made to ensure that public funds acute for investments in less populated areas, will be used in the most effective and efficient where there is a need for so-called “patient manner while encouraging as much private sec- capital.” For the backbone missing links in tor involvement—and especially risk sharing— Mauritania, for example, analyses on the capital as possible. expenditures show positive internal rate of return 16 | WORLD BANK GROUP Private Sector Owns & Operates Assets Concessions Joint Venture/ BOT Projects Partial Divestitute Full Divestiture DBOs of Public Assets Source: PPP Arrange- ments, World Bank. High national fiber optic capacity between the capital (IRR) after 20 years, whereas the private sector city and the provincial capitals in Burundi; typically expects positive IRR up to 10 years. and the local capacity in the Limousin Region in France—there is also a need for market LEGAL AND REGULATORY power regulation. This will prevent any abuse of a dominant position that would negatively FRAMEWORK impact the downstream broadband value chain. At the sector-specific level, a telecoms regula- It involves a complex establishment of service, tory framework is central for a broadband PPP’s content, and application providers. effectiveness. First, in terms of licensing and authorization, there is a need for a “carrier’s As these examples illustrate, deciding on a carrier” status. In order to preserve competitive broadband PPP is a multi-stage process. As dynamics at the retail level, it is best practice to many developing countries are still in the process require the broadband PPP to be active purely at of visualizing, implementing, or revising their wholesale level, providing the existing operators generic PPP framework, the lessons learned so and service providers with the necessary inputs far can guide the process. As with PPPs in every (such as dark fiber, capacity expressed in Mbit/s) sector, due diligence conducted at the outset will that will enable them to serve end users. go a long way toward guaranteeing that the type of PPP reaches its goal of serving a large number Should the broadband PPP be the sole provider of people effectively. of the necessary inputs—as is the case with inter- national submarine capacity in Sierra Leone; the PUBLIC-PRIVATE PARTNERSHIPS | 17 BRINGING BROADBAND to the MIDDLE EAST By Benoit Denis, Leonor Gonzalez Koss, & Francesco Totaro, European Investment Bank 18 | WORLD BANK GROUP INFRASTRUCTURE Most agree that broadband is necessary for the Middle East and North Africa (MENA) region to achieve its potential. Examining how European institutions facilitated broad- band during the last decade offers several important lessons and can guide officials in MENA through this important transition. Few regions exemplify the importance of wide- One job created in building a network would ranging and affordable connectivity more than create three additional jobs in the economy. the Middle East and North Africa (MENA). This is crucial in a region characterized by high In 2010, only 21 percent of combined house- unemployment rates, particularly among its holds in the Southern Mediterranean countries youth, women, and university graduates. (Algeria, Egypt, the economies of Gaza and West Bank, Jordan, Lebanon, Morocco, Syria, Urbanization and youth are uniquely favorable and Tunisia) had subscribed to mobile or fixed demographics for broadband take-up. The world broadband connections. Reasons for the region’s has already seen that widespread use of social low numbers include high prices resulting from media and cross-border communication have a lack of competition; burdensome regulatory been powerful enablers of social transformation. frameworks; vast areas with low population Increased access to ICT has also driven new busi- density; and gaps in infrastructure. The national ness ventures. backbone—meaning the interconnections among the different sub-networks—was also Nonetheless, broadband penetration in the often substandard. region remains low, and varies significantly among countries. In 2013, 10 percent of the The World Bank estimates that throughout Lebanese population had a fixed broadband MENA, a 10 percent increase in broadband subscription, while in Egypt, home of the most subscriptions would lead to 1.4 percent growth prominently tweeted, blogged, and texted social in GDP and a 4.3 percent increase in exports. movement, the share is only 3.3 percent. Accord- PUBLIC-PRIVATE PARTNERSHIPS | 19 ing to a recent study by the European Investment Bank (EIB), €11 billion in investments is needed to ensure that by 2020 all Southern Mediterranean coun- try citizens have access to broadband PRIVATE DESIGN, BUILD, AND OPERATE connections of at least 10 megabits per WHAT Private sector builds, owns, and operates the second (Mbps), with at least 50 percent infrastructure but is subject to strict controls, including the setting of roll-out targets and benchmarking, as being able to access the Internet at up to well as other clearly defined targets. 30 Mbps. SHOW MENA THE + Low public sector – Limited public burden control MONEY Where will those investments come + Participation of – Funding level must commercial operator be attractive from? High-speed broadband network and New Generation Access (NGA) connections can be a very profitable EXAMPLE Superfast Cornwall, United Kingdom business. With high take-up potential Superfast Cornwall aims to make Internet connections and often already existing infrastructure, of up to 330 Mbps available through fiber broadband the densely populated coastal areas and to 95 percent of homes and premises on Cornwall and the Isles of Scilly by the end of 2014. BT won a cities in the region are an attractive public tender to provide fast fiber optic based broad- investment for private communication band services to more than 266,000 premises enterprises. In sparsely populated and including 30,000 businesses in the County of Corn- distant peri-urban and rural areas, how- wall. An amount of £132 million will be invested ever, the rollout of broadband networks in providing the network infrastructure which will is less profitable. While the public sector then be available to third party service providers on a wholesale basis. The European Regional Development will pick up a significant part of these Fund (ERDF) is supporting the project with £53.5 needed investments, many govern- million of funding. BT is providing the balance, giving ments in the region are constrained by it strong financial incentives to ensure that not only is the twin demands of limiting public the broadband network constructed to the required expenditure and meeting an increasing standards, but that take-up of services by various private service providers is achieved. number of competing demands placed on the public purse. Public-private partnerships (PPPs) can help establish universal broadband access. In addition to being an alterna- tive method of financing, PPPs in the 20 | WORLD BANK GROUP broadband sector enable the public sector to access private sector expertise and technology, engendering valuable knowledge transfers. PPPs also provide the public sector with the ability to PUBLIC OUTSOURCING/GOVERNMENT transfer risk and accelerate the rollout of OWNED—CONTRACTOR OPERATED the necessary infrastructure. WHAT Construction and operation of a fully func- tional broadband infrastructure where the funding But PPPs are far from being a panacea itself is being provided from public sector sources. The for the many challenges of providing private sector operator is appointed after a competi- tive tender and takes responsibility for implementing broadband access to a growing and the infrastructure and subsequently operating the increasingly more demanding popula- network. In addition, the private company also has tion. A crucial determinant of a PPP’s responsibility for marketing wholesale and, in certain feasibility is whether predicted demand cases, retail services. will render the project profitable. In the Southern Mediterranean region, the + Public stability mixed – Returns may not be potential for take-up is significant— with private expertise attractive to the from the private as well as the public private sector sector. In Morocco, for instance, a new health decree will introduce online + Public sector retains – Network manage- e-health services as a way to improve control ment overhead health care. EXAMPLE Region Auvergne, France To understand PPPs’ potential ben- The Region Auvergne plans to provide triple-play efits in MENA, it’s helpful to look at series, meaning high speed Internet, television, and Europe’s experience. telephony over one connection, to 95% of the popu- lation by 2025. France Telecom has a 10-year contract BROADBAND PPPs IN to operate and extend the existing broadband network, owned by the Region Auvergne, budgeted EUROPE to cost € 38.5 million. While principally based on DSL, the network incorporates fiber optic loops that The financial crisis of 2008 exposed increase download speeds. The PPP has attracted severe structural weaknesses in Europe’s major service providers to provide services economy, such as lagging productivity to customers. and a lack of social cohesion. Recogniz- ing the Internet’s pivotal role in tackling these issues, the European Commission launched its Digital Agenda in 2010, setting out an ambitious NGA program PUBLIC-PRIVATE PARTNERSHIPS | 21 that aims for all European citizens to enjoy affordable connections at 30 Mbps and for 50 percent of households to be able to access the Internet at 100 Mbps by 2020. At the time the NGA JOINT VENTURE was launched, only 6.5 percent of fixed WHAT Split in ownership between the public and broadband lines in the EU provided private sectors. Construction and operation are surfing of up to 30 Mbps and only 1 undertaken by the private sector. JVs make it possible percent of the population was surfing at for the public sector to initiate a major part of the project but then allow the private sector to increas- up to 100 Mbps. ingly take control and responsibility based on certain key performance indicators. The public sector initially Public financial institutions have makes a larger financial commitment but the private been instrumental in closing the gap. sector then takes responsibility until the network The European Investment Bank, for becomes self-financing. instance, has extensive experience in financing broadband projects, bring- + Benefit to both – Conflicts of interest ing its know-how and capacity to bear parties based on may impede success on deals. Projects have typically been risk sharing of joint venture supported through lending, grants, or through blending debt finance with EXAMPLE Metroweb, Milan and Genoa, Italy EU grants. Europe’s rural and peri- The PPP was established in 1998 between a local gas urban areas have benefited particularly and electricity utility company and a new telecom pro- from EU funding, including bringing vider in Milan, and today has successfully expanded to broadband to remote regions of Scot- another city, Genoa. It has now evolved to a position land, rural Poland, and economically where the company is entirely privately owned. The disenfranchised areas of Italy. In France, company continues its self-funded expansion, with the Italian Strategic Fund and several Italian banks the EIB provided a €72 million loan having invested in it in the past years. This form of to finance a publicly-owned, privately PPP makes it possible to secure private sector exper- operated ultra-fast broadband network tise and support while the public sector retains control in the region of Haute-Savoie. A similar in the crucial early stages of network construction and project was carried out in the Polish continues to have decision rights when commercial operations have been demonstrated. region of Świętokrzyskie. In 2012, the European PPP Expertise Centre (EPEC) examined a number of these projects to try to determine which PPP models are better suited to the sector, and when PPPs are most appro- 22 | WORLD BANK GROUP priate. The study found four prevalent PUBLIC DESIGN, BUILD, AND OPERATE PPP archetypes in Europe’s broadband WHAT Significantly higher level of involvement by the public sector that is justified by the greater control sector. These models represent a range that is being sought. This model offers an alternative of options for combining public and when special funding for deprived regions is available. private investment, and offer differing The public sector develops the required infrastructure levels of involvement, commitment, for broadband services in a conventional way by and retained risk by the public sector. letting contracts individually. The design, implemen- Each model is applicable in different tation, and operation of the network itself are all directly managed by the public sector. A separate circumstances, depending on the scope publicly owned company is established that makes of the required infrastructure, the the network available to private service providers on specific aims of the public sector, and a competitive basis. the investment/risk appetite of potential private sector partners. + Full public control, no conflict of interest In each of the PPP models and cor- – No private sector responding examples described, the + Socio-economic funds or expertise project varies in the level of risk transfer benefits can be and financial contribution from the prioritized private sector. These European examples highlight points that may be useful as EXAMPLE Asturcon PPP, Spain MENA plans its broadband strategy: Asturcon is a Fiber-To-The-Premises, which means fiber goes directly to homes and businesses, in the economically disadvantaged former coal and steel PPPs offer benefits in addition to producing Principality of Asturias. The Principality’s financing government owns the network via a public company. PPPs encourage innovative approaches. Asturcon managed and implements the wholesale They are also able to address the issue of network itself, with €55 million invested, in order to migrating customers from slower, cop- keep control of its roll-out objectives and to manage the network directly. The Asturcon project operates per-based infrastructure. PPPs will help in a region of Spain. A wholly public owned, special to ensure that networks are accessible purpose company has been established (GIT) to offer and price levels remain competitive and wholesale services to private service providers. The fair. As the demand for access to digital high level of control has permitted a range of compet- data continues to increase exponentially, ing private service providers to get involved. Services the increase in access speeds will be very to business and residents include 100/100 Mbps con- nections for business and 100/20 Mbps for residential welcome. Less populated and remoter customers. parts of the MENA region should not have to face a “digital divide.” The PPP PUBLIC-PRIVATE PARTNERSHIPS | 23 models discussed in this article suggest that solu- are most likely to be attractive to investors, such tions that can prevent this. as pension funds, which are looking for low but steady annual return over a long period from a business with a steady cash flow. The speed of NGA PPP contracts pose different network rollout once the funds and contractors challenges than PPPs in other sectors are in place depends on the size and complexity It is much easier to predict demand and forecast of the project. growth for services in a mature sector, such as transport. Broadband is a new service, and it is difficult to predict the current demand and There is no “best” model for a PPP in future growth. The broadband value chain is the broadband sector more complex and involves setting up retail and The correct model needs to be assessed case by application providers. It also carries a signifi- case, taking into account the scale and scope of cant technology risk because the broadband the project, availability of existing infrastructure, technology chosen could be threatened by other and level of competition. However, the following technologies during the lifetime of the project. should be ensured: Attitudes to PPPs also vary by country, depend- • The PPP model should maximize to ing on prior experience in using the mechanism the extent possible the use of existing and the market’s appetite for risk. infrastructure. • The PPP model should maximize the use of private sector investment. Urbanization and youth are • The PPP model should maximize the competition—through, for instance, uniquely favorable demographics a wholesale-only obligation. for broadband take-up. • The PPP model should not lead to over- subsidization of the private sector while the risk is taken by the public sector. Taking a long-term view on funding and A favorable political, regulatory, and planning institutional environment is crucial for To attract the level of investment required the success of broadband PPPs to achieve universal broadband access in the A necessary condition for the successful imple- MENA region, significant private sector invest- mentation of broadband PPPs in the Southern ment will be crucial. Broadband PPP projects Mediterranean countries is creating a favorable 24 | WORLD BANK GROUP environment. Currently, the only country in the regulatory and institutional environment. A region with a specific PPP law is Egypt. Similar number of challenges exist in the regulation of PPP laws are awaiting adoption by the Tunisian NGA Internet access. These include the need to and Moroccan governments. promote competition—for example, by ensuring consistent application of costing methodologies and pricing principles across different wholesale TURNING TO MENA products and safeguarding access to broadband Despite the promise of PPPs for MENA, the infrastructure for companies without physical number of PPPs reaching financial close is assets. substantially lower than in other developing regions. This is due to two key challenges in the PPP projects need to provide an environment implementation of PPP programs in the region: that encourages potentially competing providers the identification of projects that are suitable to become wholesale customers of the PPP- for PPP procurement, and the high costs and developed network, and discourage the establish- complexity of preparing them. ment of alternative infrastructure or a separate network. This means that the network must be To address this, international financial institu- open and flexible to enable innovation by service tions have deployed several initiatives and advi- providers at price levels that are competitive and sory facilities that use the European experience fair. as a guide. For example, the EU PPP Project Preparation Facility for the Southern Neigbour- There also needs to be a high level of certainty hood (MED 5P), funded by the European that customers will migrate to the new network. Commission and led by the EIB, supports The threat from the copper network can be miti- projects at different stages of maturity. gated by incorporating the closure of the existing copper infrastructure as part of the PPP project. The transition to broadband in MENA will This requires the PPP to ensure that regulatory transform its people and its economic potential, conditions supporting existing services are met, as in every other region that has leaped the digi- and the participation of the incumbent operator tal divide. But although the promises are similar, is needed. the challenges don’t have to be. By learning from the European experience, MENA can prepare Most of the countries in the Southern Mediter- itself for success that will benefit people both ranean region have civil law jurisdictions that inside and outside its borders. rely on written laws. PPPs here are more likely to be successful when they are governed by specific Photo on page 18 © jcarillet/istockphoto. Used with permission. Further permission required for reuse. laws and regulations, thereby increasing investor confidence and creating an investment-friendly PUBLIC-PRIVATE PARTNERSHIPS | 25 MYANPolitical and social transformations in Myanmar have made possible reform of the country’s telecommunications sector. Liberalization has allowed a country with the lowest rates of telecom penetration to leapfrog into the digital age. 26 | WORLD Photo BANK GROUP © querbeet/istockphoto. Used with permission. Further permission required for reuse. INFRASTRUCTURE NMAR CONNECTED The liberalization of Myanmar’s telecom sector By Tenzin Norbhu, PUBLIC-PRIVATE World Bank PARTNERSHIPS | 27 In February 2012, it cost $300 to buy a mobile These much-needed reforms made possible SIM card anywhere in Myanmar—that is, if improvements in Myanmar’s telecommunica- such a rare find made itself available. But just tions sector and infrastructure performance. over two years later, in September 2014, you Statistics show that at the end of 2013, only could easily purchase one for $1.50—and 12.83 percent of people had access to cellphones, have your choice from among three operators. fixed telephone lines existed among just 1.04 percent of the population, and Internet users What changed? The liberalization of the tele- numbered only 1.2 percent of the population. communications sector has made possible these These figures are among the lowest in the world. and other lightning-fast telecom transitions. Because of successful sector reform, and because Myanmar’s development process is taking place LIBERALIZING THROUGH in the digital age, the nation’s citizens can expect LEGISLATION ubiquitous access to telephones and the Internet The October 8, 2013 approval of the Telecom- in the next five years. This presents a tremendous munications Law established the legal basis for opportunity for Myanmar to leverage modern sector liberalization in Myanmar. Key sets of information and communication technol- rules have been developed within the framework ogy (ICT) as a platform for socioeconomic of the law on licensing, competition, access development. and interconnection, spectrum, and number- ing; these rules provide the sector’s regulatory NOTHING EXISTS IN framework. ISOLATION A transparent, competitive licensing process But this digital leapfrogging did not just happen; was conducted in 2013 with the support of several important events paved the way. In the international advisors. The government received last three years, Myanmar, one of the largest and 91 expressions of interest on February 8, 2013 poorest countries in the South East Asian region, and issued pre-qualification criteria to all inter- embarked on a triple transition: from an authori- ested parties on February 21, 2013. On April 11, tarian military system to democratic governance; 2013, a total of 12 companies were pre-qualified from a centrally directed economy to market- from a long list of 22 companies that submitted oriented reforms; and from 60 years of conflict their documentation. toward peace. As part of the government’s ambitious economic, political, and governance The Ministry of Communications and Informa- reform program, the telecommunications sector tion Technologies (MCIT) issued a detailed was also liberalized to attract foreign investment, information memorandum, bidding documents, create jobs, support development of the local and a draft license to the pre-qualified bidders. IT industry, and promote ICT as a catalyst for Eleven bidders submitted their bids, and two social and economic change. were selected via competitive process on 28 | WORLD BANK GROUP June 27, 2013. Telenor from Norway and capacity to manage the telecommunications Ooredoo from Qatar received their telecom- sector reform program. munication service licenses in January 2014. Ooredoo launched commercial services on TRANSPARENCY IS THE August 15, 2014 and Telenor on September 27, 2014. CLEAR WINNER PPIAF’s Technical Assistance supported the To assist Myanmar’s sector reform process, the Government of Myanmar’s Ministry of Com- Public-Private Infrastructure Advisory Facility munications and Information Technology in the (PPIAF) provided a $540,000 Technical Assis- design of its sector liberalization agenda. As part tance (TA) grant to the Post and Telecommuni- of this close collaboration, an international best cations Department (PTD) in 2013. The PTD practices report on telecommunications regula- is in charge of regulatory issues as part of the tions was delivered to the ministry, providing MCIT and is expected to operate as an inde- inputs in the design process of telecommunica- pendent regulator by the end of 2015. This TA tion regulations. supported the development of an operational sector road map, the design and implementa- After this feedback was reviewed, officials drafted tion of a regulatory framework, and helped a set of key regulations on licensing, competi- develop technical and administrative capacity tion, access and interconnection, spectrum, within the PTD to address issues related to and numbering. Following public consulta- sector liberalization. tions, approval of all rules is expected in 2014. Together, these critical regulations will enable In February 2014, the International Develop- fair competition and sector liberalization. The ment Association (IDA) approved a $31.5 public consultations have served another purpose million credit toward a Telecommunications as well, institutionalizing a transparent mecha- Sector Reform Project to improve the enabling nism for the development of the regulatory environment for the telecommunications sector framework. and extend coverage in selected remote pilot locations. It also established priority eGovern- Estimates show that by the end of 2015, most of ment technological foundations and institu- Myanmar’s population will live within range of a tional capacity for the government to embark third generation (3G) or better mobile network on its public sector reform program. system. Broadband uptake in Myanmar will be driven by mobile networks. These changes— Some of the key outcomes that are expected made possible by and in turn influencing other include increased access to quality and afford- important reforms in the country—underscore able telecommunication and Internet services the role ICT plays as a platform for develop- across Myanmar; the establishment of a Myan- ment. The performance in this part of the world mar National Portal; and the development of couldn’t be more important. SHARE INFRASTRUCTURE , EXPAND THE INTERNET Emerging best practices demonstrate the power of partnerships By Siddhartha Raja, Tenzin Norbhu, & Carlo Rossotto, World Bank Utilities that share their infrastructures will help reduce the costs and time to deploy tele- communications networks. Governments that create an enabling environment and support partnerships to share infrastructure will help to expand the reach of the Internet, connect- ing more people to economic and knowledge opportunities around the world. Connecting to cyberspace requires an immense This is why telecommunications companies (tel- physical infrastructure. The telecom networks cos) often look for ways to share other networks’ on which the Internet runs are built using infrastructures, increasingly across sectors. Being thousands of miles of fiber optic cables—over- able to run fiber optic cables in an existing duct land and submarine—and hundreds of towers or put an antenna on a power transmission tower carrying antennas. So expanding the reach of the means cutting the costs and time to deploy Internet implies significant civil works to create networks. Fiber optic cables in Paris and some ducts and towers that carry those cable and of Japan’s cities run through the municipal antennas. Estimates are that civil works make up sewers. In India’s mountainous northeast, some more than half of the cost of building networks. states connect to the global Internet via fiber 30 | WORLD BANK GROUP INFRASTRUCTURE and countries will help identify emerging best optic cables laid along the tops of the electri- practices. cal power transmission towers, which also host mobile telephone networks’ antennas. And in Chisinau and Tbilisi, companies compete to get EXPERIENCES WITH SHARING access to municipal ducts and poles. For some time now, electric power transmission utilities around the world have been installing Yet many utilities have not begun to share their fiber optic cables to help with grid monitoring infrastructures, and many countries have not and control. However, the internal requirement promoted or at least permitted such sharing. In was a fraction of the installed data capacity. some cases, this is because of policy or regulatory India’s PowerGrid recognized the potential to use restrictions. At other times, it is due to the lack this excess capacity—available on 30,000 kilo- of coordination across agencies, poor informa- meters (km) of its network—to provide national tion sharing, or limited institutional capacity. connectivity services to a range of telecom By creating an enabling environment and the networks and government agencies. The utility mechanisms for such partnerships, governments is also beginning to use its many towers to host can play a role in cutting costs and expand- antennas for mobile telephone networks. This ing the reach of Internet services. The entry of business contributed about 1.8 percent to rev- alternative providers into telecom markets can enues and has led the utility to be a key member promote competition by opening new facili- of the national knowledge and fiber optic back- ties. This is especially true for the developing bone networks. Similarly, since 1995, Turkey’s world, where energy, transport, and water and transmission utility, TEIAS, has been sharing sanitation systems are being built or improved, with telcos about 13,000 km of fiber optic cables and where telecom incumbents might have installed on its network. Initially sharing exclus- monopoly power. ively with incumbent Turk Telecom, TEIAS has been leasing its fiber to various private networks Such partnerships—where public utilities host since the telecom sector was liberalized. telecom networks’ cables or antennas—will benefit host infrastructures as well. Utilities PowerGrid and TEIAS follow different models. can earn additional revenues by leasing these While PowerGrid has a tariff “menu” for various (often under-used or unused) assets, and can use services, TEIAS bids out leases of its fiber. As a this connectivity to support their own “smart result, PowerGrid remains fully responsible for systems” such as power grid monitoring or the operation and maintenance of connectiv- intelligent transport systems. The overall benefit, ity, while TEIAS passes this responsibility on to however, is to those citizens and businesses that leasees. The institutional structures vary accord- get to access Internet services and connect to ingly. In both cases, however, telecom regulators economic and knowledge opportunities globally. enabled this new business by having a liberal Considering the experiences of various utilities licensing regime that permitted the utilities to PUBLIC-PRIVATE PARTNERSHIPS | 31 enter the telecom market. And a new electricity SNCFT, has leased its ducts, while Morocco’s market law and licensing regulation has permit- ONCF leases installed fiber optic lines to private ted TEIAS to lease excess fiber optic capacity. telcos. Similarly, gas transmission utilities can also Use of rights-of-way alongside highways and open installed fiber optic capacity. Indonesia’s city roads is a common method to roll out PGASCOM, part of a leading gas transmission optical fiber networks. However, this often and distribution utility, offers upstream data implies multiple digs that could cause damage connectivity services across the Sumatra and Java and inconvenience many. Development of ducts regions. Germany’s GasLINE, formed in 1996, alongside roads could alleviate these problems offers connectivity capacity to telecommunica- while cutting costs. For example, the MSRDC, tion companies using fiber optics installed on a roads development agency in the Indian state the rights-of-way of 15 national and regional of Maharashtra, has rolled out fiber optic cables gas utilities. on a major expressway, which it then leases. Such joint deployment has long been undertaken in REGIONAL REWARDS the Republic of Korea. Information sharing and coordination across agencies is a key requirement Regional connectivity initiatives could also for these efforts to work. As a result, countries benefit from such sharing. The Baltic Optical across the European Union have been develop- Network is an alliance that uses each of the three ing infrastructure atlases to enable sharing of countries’ electricity transmission infrastructures, geospatial data, mapping existing and planned creating an 8,000 km fiber optic network. Each infrastructure that can be used or developed. of these networks is a part or spin-off from each Portugal now has an atlas to map usable infra- utility’s IT and telecom teams. PowerGrid has structure such as ducts and fiber optic cables on also connected with Bhutan’s electricity transmis- public roads, railways, water, and gas networks. sion utility, helping add redundancy to Bhutan’s Similar initiatives across Europe are helping in international Internet connectivity. coordination and dispute resolution. Sharing rights-of-way or assets of linear transpor- tation infrastructures such as highways, roads, EMERGING BEST PRACTICES and railways can also help. Railways have fiber Governments at the national, regional, or local optic cables or microwave networks for traf- levels can consider some emerging best practices fic management and signaling systems. India’s to promote sharing. RailTel—a subsidiary of the Indian railways— has developed fiber optic networks using the Opening markets. Some regulatory regimes railway’s rights-of-way, and now provides data prevent alternative infrastructure providers from centers, tower space, and enterprise services. entering the telecom market, while some might Some, such as Tunisia’s railroad company, set difficult conditions such as high license fees. 32 | WORLD BANK GROUP disputes between two telcos; when a non-telco is EU countries have simplified authorization involved, the case escalates to a court, where the regimes in place, and in some countries, such as telecom regulator can provide its opinion. India, specific “infrastructure provider” licenses allowed companies like PowerGrid to enter the Building capacity. Some utilities (and govern- business-to-business market. Lifting restrictions ments) are wary of initiating infrastructure on market entry, and hence on utilization of sharing efforts due to limited institutional available infrastructure, will be an important capacity, either within regulatory agencies (for first step. the utility or telecommunications) or within the utility. Utilities may face capacity constraints as Establishing coordination and dispute resolu- starting a “non-core” business could shift limited tion mechanisms. Poor information sharing or resources away from the core utility business. coordination will hamper sharing. Cross-sector However, as the foregoing examples have shown, sharing needs a means of sharing information on different models exist, including outsourcing, the stock and flow of infrastructure. Develop- spin-offs, and subsidiaries. Sufficient regulatory ing infrastructure atlases, which map out all of capacity—supported by an overall legal or policy the possible rights-of-way, ducts, or fiber optic framework—is needed to ensure that regimes for cables available for shared use can help. Clarify- each sector are clear and proportionate. ing regulatory powers will also help; for example, in Lithuania, the telecom regulator can clarify if Sharing infrastructures across sectors will help a non-telco infrastructure is shareable. In other expand access to the Internet. The precise cases, standards to develop and manage shared mechanisms to enable these partnerships will infrastructure are set up. Finland now requires vary by location, host infrastructure, market all future transport infrastructures to have ducts structure, and legal and regulatory frameworks. for optical fiber. In Brussels, plans on signifi- The ultimate objective should be to ensure cant infrastructure work have to be filed with a appropriate use of all possible infrastructures coordinating agency, facilitating co-investment to include more people and businesses into and joint development. the global information society. Efforts will be needed to ensure coordination of The Public-Private Infrastructure Advisory Facility (PPIAF) regulatory regimes to avoid overlaps in com- and the World Bank Group are developing a toolkit on cross- petency. For example, telecom regulators are sector infrastructure sharing. The aim of the toolkit is to assist typically responsible for how utilities price data stakeholders across all infrastructure sectors to identify oppor- services, while the energy regulators should focus tunities to share elements of existing or planned infrastructure and to increase the efficiency of infrastructure investments on the core business, and can assist in creating through infrastructure sharing. incentives for opening of the infrastructure. Dispute resolution mechanisms are also critical. Photo on page 30 © carefullychosen/istockphoto. Used with In Lithuania, the telecom regulator can resolve permission. Further permission required for reuse. PUBLIC-PRIVATE PARTNERSHIPS | 33 Photo © Facebook Working through its Internet.org coalition, Facebook recently launched a free app with Airtel that provides access to basic services for Zambians who have cellphones without data plans. It’s just the start of an ambitious long- term plan to close the connectivity gap. Here, Chris Weasler, Head of Global Connectivity for Facebook’s Internet.org initiative, reveals to Handshake readers the Facebook- led alliance’s strategy for driving Internet adoption globally. Interview by Alison Buckholtz CLOSING THE CONNECTIVITY GAP Facebook launches new Internet.org app in Zambia 34 | WORLD BANK GROUP INTERVIEW Last year Facebook launched also become an active contributor to it. Different Internet.org, a global partnership people will take different approaches, and we don’t want to be too prescriptive about how it to make the Internet available to “should” work in various countries; we just want the two-thirds of the world’s pop- to give everyone the opportunity to have access. ulation that isn’t connected. What It will benefit those of us already connected, too. Facebook’s founder had the benefit of open is Facebook’s role in the initiative? source tools, and there’s no reason to believe the For over 10 years, Facebook’s mission has been next Facebook couldn’t come out of a village in to give people the power to share, and make the Ghana or a remote location in Myanmar. world more open and connected. In that time, we’ve connected a lot of people to Facebook but we have also learned that there are hurdles to How does the Internet.org initia- getting people on the Internet. These hurdles tive complement the goals of are significant—and diverse. We knew that over- coming them was a task greater than what one Facebook’s Connectivity Lab, company could achieve on its own. With that which is developing ways to make in mind, we deliberately launched Internet.org affordable Internet access possible as a Facebook-led alliance of partners working together to bring Internet connectivity to in communities around the world? the nearly two-thirds of the world that isn’t At the highest level, Internet.org and the goals of online yet. the Facebook Connectivity Lab are complemen- How can Internet.org change the way the Internet represents people It’s easy to take the Internet for granted and assume most and answers their needs? people will soon have the Our starting point is to try to make the Internet access and opportunity we available to everyone. When you make it avail- have, but that just isn’t the able and affordable, with local language content, case. Connecting everyone and people see how it can provide utility in their lives, people do adopt the Internet. As you drive is one of the fundamental Internet penetration up in some of those coun- challenges of our generation. tries where it’s low, it starts to represent more people and gives them the ability to participate —Mark Zuckerberg, Wall Street Journal, July 7, 2014 in the knowledge economy. They not only tap into the collective knowledge of the world, but PUBLIC-PRIVATE PARTNERSHIPS | 35 As part of its Connectivity Lab, Internet.org is working on new delivery platforms—including planes and satellites—for con- nectivity on the ground, in the air, and in orbit. Image © Facebook. tary, and both are tied to the company mission. deepened our relationships with existing like- The Facebook Connectivity Lab is focused on an minded partners, especially mobile operators and element of Facebook’s broad connectivity agenda infrastructure providers. The Internet.org app in —developing space-based technologies to bring Zambia is a really good example of how we have the people who live outside of traditional, terres- worked with many different stakeholders, public trial network coverage online through satellites, and private, to develop a suite of free basic drones, lasers, and other space-based technology. services. In this case, we worked with the opera- tor Airtel, local governments, and other partners on the ground who all had input into the basic Internet.org can be seen as the services we’re delivering now. ultimate public-private partnership for connectivity—a global partner- Why did you choose Zambia for ship among technology leaders, the Internet.org rollout? nonprofits, local communities, and Just looking at the population of Zambia and experts who are working together knowing that only about 15 percent of the to make the Internet available to population there accesses the Internet today, all. Did Facebook have a model we saw there was a huge opportunity to bring more people online. These are early days for for a partnership of this scale? Internet.org, so we’re looking for partners that When Internet.org was launched and originally are able to move fast, alongside governments that defined, we didn’t have any specific models can embrace the projects that we’re testing and we were trying to follow—we hadn’t done trialing. The conditions were just right in this before, so we consulted with experts and Zambia to achieve that. 36 | WORLD BANK GROUP where some of these different solutions from the It’s widely understood that differ- Facebook Connectivity Lab come in. All of these ent communities require different solutions are focused outside of the core, dense, solutions for connectivity. What urban areas—for example, some of the work that we’re doing on solar powered high altitude long sort of criteria factors into how endurance aircraft could be good solutions for Internet.org can work in different low population density locations. They can stay areas of the world? aloft for months, they can be deployed pretty There are billions of people who live within easily, and the network architecture that would coverage who are not on the Internet—the use those aircraft is somewhat flexible. We’re still barriers there are affordability and awareness. working through exactly what that looks like, But when we look at the 15 percent who are not but that’s how we’re thinking through how to close to coverage areas or who might live within serve different geographies. a weak signal, we see people who live in much lower population density areas that are difficult We’re also exploring the use of satellites. Satel- to serve within a traditional terrestrial network. lites have played a meaningful role in communi- Either they are off the power grid or there’s no cations and connectivity for decades. There are reliable access to a cell site, or the challenges are latencies that need to be overcome, but our team economic—for example, there’s just not enough is looking at how we can bring the cost down network traffic for the operator to cover the and allow us to launch on a faster timeline. cost of operating that incremental site. That’s Facebook's Connectivity Lab is working on new aerospace and communica- tion technologies to advance the Internet.org mis- sion of improving and extending Internet access. PUBLIC-PRIVATE PARTNERSHIPS | 37 connecting the UNCONNECTED Universal Service Funds narrow the digital divide By John Roman, Intel Corporation BROADBAND ACCESS PYRAMID 1 billion people Contract (unlimited) broadband 2 billion people 3 billion Prepaid broadband people 4 billion people Mobile phone access US 5 billion Shared access: Ft people arg -community centers et -schools, libraries 6 billion area people 7 billion people 38 | WORLD BANK GROUP SERVICES The social and economic benefits that come with access to broadband improve lives and create economic opportunity. The “connected” have an opportunity to bring this access to all, and assistance is key. The digital divide contributes to an economic Applying the pre-paid model to broadband via divide. Countries with significant penetration the R3B program—a partnership among govern- are thriving, and despite efforts to improve ment, service providers, equipment manufac- Internet access in many developing countries, turers, and content providers offering pre-paid many nations and countless numbers of people broadband, affordable PCs, and desired con- are being left behind. The United Nations tent—has quickly added millions more online. Broadband Commission has established goals for countries to close these gaps, and there has UNIVERSAL SERVICE FUNDS been progress: for example, over 134 countries now have national broadband plans. But many CLOSE THE GAP low-income and remote populations remain Connecting the remaining billions of people unserved; the International Telecommunications with broadband requires public assistance Union’s “ICT Facts and Figures” reports that because market forces are not sufficient to act in over 4 billion citizens lack Internet connections. the near term. Universal Service Funds (USFs) are one valuable tool to close these service gaps, This leaves “the connected” with a formidable and best practices from around the world can opportunity—and in many places, this oppor- model results for governments considering this tunity is being seized. Market mechanisms have approach. In Malaysia, for example, the USF connected the first 2 billion users worldwide, provided netbooks and subscriptions to more and with new business models and public-private than 1 million low-income students, which more partnerships, these same approaches are on the than doubled household Internet penetration way to enabling the third billion. The pre-paid in three years. Turkey is another success story; subscription model, along with facilities compe- the country is using USFs and other funds to tition, has made cellphones nearly ubiquitous. transform the education system, providing elec- PUBLIC-PRIVATE PARTNERSHIPS | 39 skills and services. In India and Bangladesh there tronic whiteboards, laptops, and tablets, along are also thousands of these shared access centers. with a 21st century curricula and the appropriate Some are managed by villagers, who may act teacher training. These programs greatly help to as agents of the banks (assisting with bill pay- increase broadband use. ing and microloan financing), or agents of the The reality, however, remains: several billion government (providing online registrations to people who are in the lower tier of the pyramid access government services) while also providing live in remote locations and have extremely low PC skills training and access to email. incomes, and therefore shared access can be one of the most effective solutions for the short term. WANTED: WORKSHOPS Shared access through telecenters, libraries, and Despite the benefits of USFs, much of the funds schools provides a number of benefits, such as around the world remain underutilized. A recent low cost access to devices that connect to the ITU study shows that of 69 funds reviewed, Internet, digital skills training, and access to a majority had little to no activity, and at the e-government services. time less than half permitted deployments for broadband. Out of $23.2 billion available for Universal Service Funds in 2010–2011, $11.8 billion remained unused. One factor contribut- Connecting billions of people ing to low usage of available monies is inability to manage the fund. with broadband requires public assistance because market To help address the capacity issues, Intel is lead- forces are not sufficient to act ing a series of regional broadband and Universal Service Fund workshops where government and in the near term. Universal industry leaders gather to share what works and Service Funds (USFs) are one what doesn’t to enable more people to get online. valuable tool to close the The money is available, the tools are accessible, service gaps in low-income and the will exists. As we spread the word about these resources, we look forward to connecting and remote areas. far-flung populations and making the world a little bit smaller, for the benefit of us all. This article was adapted and updated by the author for USFs have established hundreds if not thousands Handshake from the ITU Broadband Commission report, 2014. of telecenters in remote areas. Success stories in Colombia, Malaysia, Pakistan, and Ghana prove that they are providing a means for millions of underserved villagers to gain access to essential 40 | WORLD BANK GROUP BUT WHAT DOES IT ALL MEAN? Since the late 1990s, access to information and communication technologies (ICTs) has seen tremendous growth, driven primarily by the wireless technologies and liberalization of telecommunications markets. Mobile communi- cations have evolved from simple voice and text services to diversified innovative applications and mobile broadband Internet. The Little Data Book on Information and Communication Technology 2014 illustrates the progress of this revolution for 214 economies around the world. It provides comparable statistics on the sector for 2005 and 2012 across a range of indicators, enabling readers to readily compare economies. This book includes indicators covering the economic and social context, the structure of the information and communication technology sector, sector efficiency and capacity, and sector performance related to access, usage, quality, affordability, trade, and applications. The glossary contains definitions of the terms used in the tables. BY THE END OF 2013... 6.8 billion mobile-cellular subscriptions globally. 2.7 billion individuals using the Internet. 700 million fixed broad- All figures band subscriptions. estimated. PUBLIC-PRIVATE PARTNERSHIPS | 41 THE DIFFERENCE is in the DETAILS Legal Aspects of ICT & Telecom PPPs ICT PPPs differ from those in other infrastructure sectors. Though PPPs are still an effective way of using scarce public funds to catalyze and “crowd-in” private sector participation and financing, each project needs to be looked at individually, while pay- ing close attention to risk allocation. By David Satola, World Bank does not conflict with that of the PPP supervisor Although PPPs are at their core an assignment and vice versa. of risk between private sector and public sector parties, these agreements also define governance arrangements. For PPPs in information and PPPs IN TELECOM communications technology (including telecom- In telecom, PPPs are often used for the financ- munications), or ICT, the governance arrange- ing, installation, and operation of infrastructure ments ensure fair competition and open access. (typically fiber optic broadband, both terrestrial This is an area where PPPs in ICTs differ from and submarine), and the provision of services PPPs in other infrastructure sectors. that use the infrastructure. The contracts are typically “transactional”—they involve setting Most countries have telecommunications legisla- up joint ventures, sometimes through a corpo- tion and a sector regulator to ensure efficiency rate vehicle and sometimes via contract for the and fair competition in the provision of infra- express purposes of the project. structure and services. Generally, regulated industries such as ICT require different levels of For example, the Africa Connects Europe (ACE) oversight from the PPP regulator. Governments submarine cable consortium is not an entity, must be careful to limit the opportunity for but a joint venture (JV) by contract. Of the 20+ regulatory arbitrage among the PPP and sector members of ACE, consortium members who are regulators by market players, ensuring that the benefitting from World Bank financing are using regulatory oversight of the telecom regulator PPPs for the construction of domestic infrastruc- 42 | WORLD BANK GROUP LEGALEASE ture and the distribution of broadband capacity even “outsourcing” the network operations locally, mostly in the form of corporate JVs that functions to third parties. include shareholder agreements and articles of incorporation or the equivalent. PPPs IN E-GOVERNMENT Some elements of the corporate JV type of PPP that the ACE agreements incorporate are worth While some of the legal arrangements for noting: e-government projects may include the purchase of hardware and software from vendors for • Entry, exit, and continuity: Provisions running government databases, or outsourcing regarding entry and exit from the venture, contracts with other vendors to run systems on including the rights of first refusal upon exit, behalf of governmental entities, these arrange- should be considered. The JV PPP should ments are qualitatively different than the trans- actional PPPs typical in telecommunications. An also include appropriate provisions that give e-government contract is a long term, ongoing the parties incentives to continue in the relationship typified by the transfer of some venture. These could include spacing out governmental function to a private party. The investment obligations throughout the rollout PPP contract focuses on the service-level aspects of the project (as opposed to allowing private of the activity, shifting risk and liability to the participants to “back-load” their investment private provider that is performing a function on after public sector money is invested). behalf of a governmental entity. • Open access and fair competition: JV PPP contracts address the governance of The financial aspects of these contracts are very the venture, including, critically, issues of different from those in the telecom infrastructure open access and fair competition. For added context. While there is an element of investment, protection, material decisions affecting open the main distinguishing factor is the ongoing access and fair competition could be given provision of service. Accordingly, the financing “super-majority” voting rights in the con- of these PPPs may also include financing by sortium documentation. This gives minority the government of the service provider through participants (usually the government entity) ongoing operational revenues via license fees, rights to ensure that the public policy objec- or using revenues generating from provision of tives that the venture was set up to achieve the service. Though these differences may seem are respected. minor at first, each one creates a set of circum- stances that deserves close attention to result in • Downstream arrangements: The contract a successful project. should also consider the need for the JV to enter into further downstream arrangements, For a set of materials on Telecom and ICT frameworks, laws, including financing and construction of infra- regulations, toolkits and other reference, visit the Public-Private structure, obtaining operational licenses, and Partnerships Infrastructure Resource Center. PUBLIC-PRIVATE PARTNERSHIPS | 43 KNOW YOU KNOW WHAT How local governments can engage communities through technology In a paper for the Berkman Center for Internet & Society at Harvard University, scholars looked at three cases of community fiber networks in the U.S. to determine what went wrong, what went right, and what lessons could be learned as these networks are rolled out in other cities around the world. Susan Crawford, a Visiting Professor at Harvard Law School, is the paper’s lead author and the coauthor of the new book, The Responsive City: Engaging Communities Through Data Smart Governance. She also served as Special Assistant to President Barack Obama for Sci- ence, Technology, and Innovation Policy (2009) and as a member of Mayor Michael Bloomberg’s Advisory Council on Technology and Innovation. Here, she discusses how government officials can make technology a priority, how to get public-private partnerships right the first time, and why “e-governance” is just “governance.” 44 | WORLD BANK GROUP INTERVIEW Interview by Alison Buckholtz In your recent paper, you looked at three ahead—they won’t be stuck on a cable plateau American cities’ approaches to commu- in the same way the U.S. is—and move right to nity fiber networks. How would the les- fiber. Large financial institutions are coming to sons learned from these cities apply to understand the business model for fiber and will similarly-sized cities around the world? be in a position to back these plans. We have a major problem in the U.S. when it comes to high-speed Internet access, and that Which cities are doing a good job problem is undermining our ability to take on improving governance through technol- other challenges—including widening inequal- ogy, and what elements have converged ity, educational deficits, expensive healthcare, to make these e-government projects crumbling infrastructure, and climate change, among other issues. Our problem is that Ameri- successful? cans pay too much for second-class (cable) access The arrival of fiber connections to the Inter- to the Internet, and too many poor and rural net, decreasing costs for storage of data, wide Americans are being left behind entirely. availability of smartphones, knowledge of data analytics, and a new generation of policy/ We have gotten in this situation because of tech leaders in local government is creating the policy failures at the federal level over the last opportunity for thickening the mesh of democ- ten years or so, and mayors across the country racy in a positive way. The goal is to build trust are getting fed up. So I have been focusing on in the public sector by “showing your work” city-level fiber planning that will help mayors get in innumerable small ways that are visible to inexpensive, ubiquitous, unlimited fiber optic the public—which will help cities collectively connections in place. This will facilitate broad address major civic problems. The Responsive City wireless coverage as well. Many cities already lifts up a wide variety of stories along these lines. have public fiber assets in place but have not We are just at the beginning of this paradigm thought about how to use those facilities to help shift. their citizens. Chicago is one of my favorite cities in the world, My recent paper (written with three of my stu- and it is making great progress on the responsive dents) about San Francisco, Washington, D.C., front. Mayor Rahm Emanuel’s leadership has and Seattle fiber efforts outlines what those cities been critical; he has a terrific team in City Hall have already been through with respect to fiber that is building open-source tools that will, planning. All three have a long way to go, but among other things, provide a map-based inter- other cities around the world can benefit from face to city services that could be adopted by their thinking. Developing societies can leapfrog smaller cities. Chicago has built a “data diction- PUBLIC-PRIVATE PARTNERSHIPS | 45 running room to make progress on pilot projects ary” that identifies all the fields in all of its data, that will prove to city agencies that collaborating making interoperability among databases belong- both inside and outside the walls of their local ing to different cities possible—and thus com- city hall will benefit everyone. parisons among cities. A local nonprofit, Smart Chicago, in partnership with local foundations and community groups (as well as City Hall), What should public-private partner- devised a way for constituents to identify and ships (PPPs) do better to be more widely track neglected buildings—feeding that informa- utilized as e-Governance tools? tion right into the city’s 311 system and putting pressure on the city to be responsive. Chicago is When it comes to software and servers, cities carefully proceeding with understanding its own do not necessarily need to buy large enterprise data (formerly hidden in databases that were not systems that will trigger ongoing payment linked) to help it understand how to target its obligations. A city should not have to pay to ask resources. Where are air quality issues? How is questions of its own data. But a future crucial traffic flowing? What infrastructure needs fixing? partnership may involve borrowing employees Many of the steps Chicago has taken are quite from the private sector to serve for short (two- simple—but they’re revolutionary given the way year) stints in government—bringing in 21st local government usually operates. This isn’t century expertise to help infuse local government “e-government.” It’s just government. with current technology knowledge. And city employees should have opportunities to exit and return, for the same reason and for similar What are the most important figures periods of time. No amount of “continuing edu- that local officials should look at if they cation” will substitute for these real-life opportu- want to leverage data and be more nities. The current generation of students should be given the chance to work for a short period of responsive to their citizens’ needs? time in local government as well. These steps will The first step for a local government is to know lead to long-term changes that will strengthen what it knows. This sounds simple, but it may democracy. take months to figure out what data and other technology assets are hiding in various city agen- Another important PPP may involve fiber cies and how they might relate to each other. infrastructure. A city or local government may Transport data, infrastructure data, city fiber, not be the best actor to itself manage a dark city employees who are knowledgeable about fiber installation. While retaining ownership and data science—a thorough inventory needs to control, and while requiring openness to retail- be taken. The next step is to ensure the city has level services, the city can call for fiber to be built hired people who are flexible, knowledgeable and assist the private entrant by providing loan about technology, and have the full trust of the guarantees, access to city poles and rights-of-way, city leadership—and to give them a budget and and other assistance. 46 | WORLD BANK GROUP When advising high-level government You’ve emphasized that data-smart gov- officials on using technology to innovate ernance needs a cadre of city officials for the benefit of communities, what and innovators to lead the charge and arguments are most convincing? empower public employees with the dis- By 2050, three-quarters of the world’s people cretion to translate these technological will be living in cities. Cities are under great advances into action. What’s the key? pressure to do more with less, while facing grave The secret sauce here is leadership. Leaders who challenges of inequality, climate change, and fundamentally understand the transformative economic dislocation. At the same time, the impact of interactivity and the Internet will long-run benefits of democracy over authoritari- be able to articulate the vision and provide the anism need to be demonstrated. Digital technol- political cover that is needed to accomplish the ogy, harnessed by thoughtful policy and wielded goals of The Responsive City. Without leadership, by knowledgeable leaders, can help on both none of this will happen. these fronts, allowing the city to show its work, listen to the concerns of its inhabitants, and Paper citation: Crawford, Susan P. and Connolly, John S. deliver services more effectively. Yes, it requires and Nally, Melissa and West, Travis, Community Fiber in an upfront investment in the city’s employees Washington, D.C., Seattle, WA, and San Francisco, CA: and in basic infrastructure. But the payoffs are Developments and Lessons Learned (May 27, 2014). Berkman incalculable. Center Research Publication No. 2014-9. Available at SSRN: http://ssrn.com/abstract=2439429 ABOUT THE RESPONSIVE CITY The Responsive City is a compelling guide to civic engagement and governance in the digital age that will help municipal leaders link important breakthroughs in technology and data analytics with age-old lessons of small-group community input to create more agile, competitive, and economically resilient cities. The book is co-authored by Professor Stephen Goldsmith, director of Data- Smart City Solutions at Harvard Kennedy School, and Professor Susan Crawford, co-director of Harvard’s Berkman Center for Internet & Society. PUBLIC-PRIVATE PARTNERSHIPS | 47 P IN GHANA, is for Ghana’s e-government PPP and By Mavis Ampah & the value of long-term strategies Randeep Sudan, World Bank Most African countries have realized the importance of private investment and are experimenting with private sector partnerships for the construction, maintenance, and/ or operation of capital intensive projects. Where they have succeeded, as with Ghana’s e-government public-private partnership (PPP), results benefit the entire society. In April 2010, the Government of Ghana signed The PPP was structured on a design, finance, a public-private partnership (PPP) contract build, operate, and transfer model. The govern- to reengineer business registration processes, ment supported the project through resources deploy state-of-the-art application software and from a World Bank-financed “eGhana Project,” hardware, and employ best-in-class solutions for contributing about one-third of the $60 million the Ghana Revenue Authority and the Registrar project costs; the private sector contributed the General’s Office. This was part of a broader remainder. The agreement was for the private program to achieve greater efficiency, transpar- sector to build and manage the e-tax and elec- ency, and effectiveness in the delivery of selected tronic business registration platform until their government services using ICT. investment costs were recovered—within five 48 | WORLD BANK GROUP SERVICES and not exceeding seven years from the effective date of the contract. At the end of the operations contract. This required consolidation of the period, the system would be turned over to des- five original revenue agencies into a single ignated government organizations for continuing Revenue Authority and changed the scope operation. of the awarded contract, though the payment terms remained unchanged. The objective of eGhana was to broaden the • Ghana discovered oil, which made any tax base, increase compliance and transparency, perception of revenue sharing with its private reduce incidence of fraud, and improve the com- partner politically sensitive, even though the petitiveness of the business climate in Ghana. repayment was limited to total cost. The existing processes led to fraud and signifi- cant delays; for example, business registration in • Protracted World Bank procurement Ghana before the automation took on average processes added to delays in starting the about two weeks. After automation, businesses program. This was due in large part to the could complete registration in three to five World Bank’s rigorous due diligence process, days, and planned improvements will ultimately given that the contract was not awarded to reduce this to one day. the lowest bidder, because the winning bidder had technical superiority. OVERCOMING CHALLENGES • Disagreements between private partners and The process of automating Ghana’s revenue their sub-contractors on intellectual property agencies and the business registration system rights issues delayed implementation. faced significant challenges along the way. For • Inadequate capacity of the public partner example: to manage complex business re-engineering processes further slowed the project’s • The consultation process to validate the PPP implementation. design took over a year. • A first bid process to select private partners Despite these challenges, the eGhana PPP—now overlapped with the financial crisis, which in its fourth year of implementation—is consid- resulted in potential private partners request- ered a flagship project for the government and ing a greater contribution from the public one of the more successful PPPs in the country. sector. The tax registration systems are streamlined, bringing on-line some 400,000 new taxpayers. • Prices for the second bid were about 40 The combined impact of new taxpayers and new percent higher than the government had businesses seeking to normalize operations is projected. already having a positive impact on the revenues • A new Ghana Revenue Authority Bill was of the Registrar General’s department and the passed immediately after award of the economy as a whole. PUBLIC-PRIVATE PARTNERSHIPS | 49 GHANA’S REVENUE AGENCY BEFORE AUTOMATION D ia lU RGO Pro VIPs p Li Registrar General’s VAT Service nk Department Manual Re-key Smart Tax TIN System Revenue IRS Agencies Governing Board Occasional Data Dump—portable media D B Li nk Collections and Targets Large Taxpayer Unit COBOL Legacy System IRS L-TIPS Ghana Tax Large Taxpayer Unit Management System IRS MODELING CHANGE ners remain flexible to policy changes that may Other countries can learn from Ghana’s improve outcomes. Communicating continu- e-government PPP. In particular, it’s important ously with the public and relevant stakeholder to keep in mind that the implementation of institutions throughout the project implementa- complex PPPs (especially for tax modernization) tion process is key as well. requires the utmost commitment of all partners to the broader vision of improved efficiency and Staying the course brings measurable benefits services to citizens. It also requires that all part- to all parties. For the government, it includes a 50 | WORLD BANK GROUP GHANA’S REVENUE AGENCY AFTER AUTOMATION Online Service Provision via Portal PORTAL TRIPS Shared Services GeReg Ghana Revenue Registrar-General’s Authority Real Time Data Sharing via Web Services Department DATA REPOSITORY broadened tax base, potential increase in rev- country. This is particularly important follow- enues, reduced inefficiencies, and cost savings. ing the country’s adoption in June 2011 of the Taxpayers gain access to new, simplified online National Policy on PPPs, as the country moves services. For the private partner, rewards vary to put in place the requisite legal framework. The and may include agreed interest on investment potential benefits of the partnership, including or share of revenue collected in other coun- leveraging private capital to complement limited tries. In Ghana’s case, the share of revenue was public resources, more efficient public services, capped at total cost of investment. There are also and improved national and business competitive- rewards for development partners in the form of ness, provide promising lessons for structuring improved governance and judicious use of scarce more PPPs both within and beyond Ghana’s public funds. borders. Ghana’s experience with the e-government PPP Photo on page 48 © AfricaImages/istockphoto. Used with permis- sion. Further permission required for reuse. provides lessons for other PPP projects in the PUBLIC-PRIVATE PARTNERSHIPS | 51 eESCOLA TOP PORTUGAL’S EARNS MARKS Government’s ICT strategy increases competitiveness in Portugal By Mario Franco, Foundation for Mobile Communications 52 | WORLD Photo BANK © Charlotte GROUP Kesl/World Bank SERVICES When the Portuguese government introduced broad, deep Internet access to society during the last decade, the results were described as a “technological shock.” The aftershocks in education have been especially strong because of eEscola, which has raised education outcomes and increased competitiveness. Portugal’s eEscola program has been the most schools, and youth associations. The aim was to significant element of government efforts to develop a knowledge society and economy in provide society with broad, deep Internet access. Portugal, and over a decade after implementa- eEscola debuted with ambitious goals: to make tion, eEscola boasts about 1.7 million beneficia- computer equipment (portable devices) and ries. Overall, about 17 percent of the Portuguese broadband Internet (particularly wireless) easily population has directly benefited, and about available to students, teachers, adults in training 43 percent of the Portuguese population has PORTUGUESE PROGRESS TRACKED IN GLOBAL COMPETITIVENESS REPORT According to the Global Competitive- ness Report, Portugal moved ahead PORTUGAL PORTUGAL 2013–2014 2014–2015 15 positions in 2014, jumping from the 51st to the 36th position. Portugal Technological Technological also improved in the technical readi- Readiness Readiness ness category among the 144 coun- tries studied, climbing from the 29th Overall Overall to 26th position. PUBLIC-PRIVATE PARTNERSHIPS | 53 indirectly benefited. In total, the program has • Supported the transformation of Portuguese involved about 1.2 million new subscribers. schools through digital learning spaces, promoting collaboration, creativity, commu- nication, and problem solving skills; eEscola has created a networked • Provided access to eContent and eServices, society characterized by its social and further strengthened the ICT skills of interactions, knowledge sharing, students, teachers, adults in training pro- and information research. grams, youth associations, and their families; • Supported the education technology indus- try development, leveraging its degree of But eEscola has done more than simply earn expertise; good grades for itself and its students. It has • Improved dialogue capacity among teachers, shifted Portugal’s education paradigm and students, and parents; and created a networked society characterized by its social interactions, knowledge sharing, and infor- • Bridged the digital divide by stimulating the mation research. Specifically, it has: diffusion of ICT among Portuguese families. • Prepared new generations for the challenges PART OF A LARGER PLAN of the information and knowledge society The eEscola program is a critical component and economy; of the Portuguese Technological Plan for Edu- • Contributed to the technological moderniza- cation, an unprecedented effort to promote tion of Portuguese schools and society as well schools’ technological infrastructure and the as to entrepreneurship; availability of content and services online for ABOUT THE FOUNDATION FOR MOBILE COMMUNICATIONS The Foundation for Mobile Communications manages eEscola. It was created by the govern- ment and comprises three mobile operators: Vodafone Portugal, Portugal Telecom and Optimus (Orange). To ensure the Foundation’s independence from the different operators, the telecom operators bestowed on the government the management power of the Foundation. 54 | WORLD BANK GROUP by an approach that leverages industry expertise, students, teachers, and others. Specific goals for and above all, industry’s full involvement. schools included: On the government side, three elements are key: • Simplification of school management; • Make equipment available and provide easy • Provide schools with quality web services, access at affordable prices; critical for the education system; • Mobilize all the “actors”—publishers, com- • Launch IT infrastructures allowing “digital munications operators, educational com- education”; munity officials, producers and distributors of • Facilitate education entities with tools to bet- equipment, and the educational community ter coordinate, supervise, and control results; in general; and and • Mobilize and sensitize society and the busi- • Provide schools with high-speed broadband ness community to the availability of people Internetv and enable services such as voice, with new skills and consequently the need for videoconference, TV, and surveillance over IP. new profiles of employability. Both the overall national ICT plan and the eEsc- A program like eEscola, executed carefully and ola model may be very useful to other govern- within the context of a national ICT strategy, ments seeking to enhance student scores as well can facilitate students’ improvement, entre- as overall competitiveness. To create a successful preneurship, and innovation while enhancing initiative, it is important to have a holistic view citizens’ competencies across an entire society. of the classroom, the school, and all levels of the Ultimately, such a positive report card reaps education administration. It must be sustained rewards throughout the economy. TELECOM OPERATORS WIN, TOO eEscola strengthened telecom operators’ investments in the modernization, expansion, and quality of their mobile networks and services, in order to respond to the growth of data transfers. It also widened the territorial coverage, especially toward the more disadvantaged and remote areas. Overall, eEscola promoted competition among operators while leveraging the 3G and other network capabili- ties. Services improved while the market grew. PUBLIC-PRIVATE PARTNERSHIPS | 55 Photo © VikramRaghuvanshi/istockphoto. Used with permission. Further permission required for reuse. 56 | WORLD BANK GROUP INDIA’S ICT By Shashank Ojha, World Bank transform government SERVICES The organizational transformation that is required for successful e-government proj- TO PROCURE OR TO PARTNER? ects demands the sort of highly structured relationship that public-private partnerships THAT IS THE QUESTION are known for. India’s National e-Gover- • E-government projects require complex nance Program—which takes a holistic technology design and solution. view of e-government across the country, integrating departmental initiatives into a • High level of obsolescence due to collective vision, a shared cause, and a evolving technology trends make massive countrywide infrastructure—is a these projects risky. proven model that other governments • Technical capabilities required for can adapt. e-government project are diverse, high-cost, and are difficult to retain; they cannot be developed overnight. Innovative use of information and communi- cations technology (ICT) has revolutionized • The failure rate of e-government projects business, but the pace of adoption in govern- is very high, so optimal sharing of ment remains slow as many struggle to keep up. risks between partners is critical. It’s not for lack of desire: many officials fear that their administration will miss out on the fruits of the ICT revolution due to their inability to DEFINITION, PLEASE deliver on expectations from citizens and busi- nesses. Policymakers worldwide, and especially The Gartner Group defines e-government in the developing world, are eager to “leapfrog” as “the continuous optimization of service into the digital way of doing things. delivery, constituency participation, and governance by transforming internal and But e-government projects that involve success- external relationships through technology, ful adoption of these complex and ever-changing the Internet, and new media.” technologies also require significant organi- zational transformation. It’s no wonder that e-government initiatives are often regarded as high risk, high return investments. example projects). Its National e-Governance Plan, supported by the World Bank, is a INDIA’S PPP LEADERSHIP national program which takes a holistic view India leads the developing world in public- of e-government across the country. It integrates private partnerships (PPPs) for e-government departmental initiatives into a collective vision, projects and it has several successful initiatives a shared cause, and a massive countrywide infra- that are useful models for others to follow (see structure and has created the foundation PUBLIC-PRIVATE PARTNERSHIPS | 57 for other successful projects. This program has strength- ened the PPP approach in e-government through a clear set of policies on PPPs, a Guidance Note, and a model Request for Proposal. This foundation is critical. Most government agencies do not have the capability and experience to manage the multi-dimensional risks resulting from complex technol- ogy adoption, and organizational change, or the technical expertise to effectively manage these investments. The challenge is not about procurement of these new ICT tools, but managing the risks and challenges during the entire project life cycle, which includes planning, acquisi- tion/construction of the assets, and its efficient operation. This requires expert core capabilities within the organiza- tion. Too often, their absence results in failure of e-government investments. RELATIONSHIPS MATTER Success is more likely when officials realize that e-govern- ment PPPs are not a standard replacement for the run- of-the-mill procurement approach for all of government’s ICT needs. It is not about procuring the best technical expertise from the private sector and dumping all the project risks on the private partner. Instead, every successful PPP is a carefully crafted relationship that has been designed with care and under- standing of realities on the ground. These models must be developed by a team of multi-disciplinary experts. They must be based on legitimate and well-established manage- ment concepts for developing customized solutions for risk management, capital optimization, and creation of project-specific governance structures in project financ- ing. When these pieces are in place—as the examples here demonstrate—e-government can serve the people as well as the government, sealing the unofficial compact between the two to work together for the benefit of all. 58 | WORLD BANK GROUP COMMON SERVICE CENTERS PROJECT: VEHICLE FOR INCLUSIVE GROWTH • Citizen service delivery outlets. • Government-to-citizen, government ANDHRA PRADESH E-PROCUREMENT -to-business, and government-to- PROJECT government services. • PPP approach using the Build- • Over 100,000 across the country. Own-Operate model. • Largest telecenter project in the world • Capital investment by private partner. • Cost: $1.3 billion • Tender fees shared between • Private Partners: $1 billion government and private partner. • Government: $300 million • Sound business model. • Capex + Opex by private partner. • Procurements worth about $2 • Staffed by entrepreneurs from village. billion per year. • Government provided viability gap • Reduced tender cycle time (135 support for four years. days to 35 days). • Government services to citizens • Speedy rollout and 24/7 help and businesses. desk support by private partner. • Managed through a Special Purpose • Huge cost savings. Vehicle at the national level. • Fair and transparent. Cartels eliminated. More details: www.csc.gov.in More details: http://www.eprocurement.gov.in MCA 21: A PPP MODEL FOR MINISTRY OF CORPORATE AFFAIRS • PPP approach uses the Build-Own-Operate-Transfer model. • Entire government-to-business interaction processes automated. • Digitizing about 45 million paper documents in MCA’s archives. • Setting up a data center. • Building the computing infrastructure. • Setting up 52 facilitation centers and operational support for five years. • Designing the application software. • Setting up secure electronic payment gateways. More details: www.mca.gov.in/MCA21 PUBLIC-PRIVATE Photo © MarcelC/istockphoto. Used with permission. PARTNERSHIPS Further permission | 59 required for reuse. a “virtuous” PLAN VIVE DIGITAL Greater access, greater demand in Colombia rio TIC Ministe Photo © 60 | WORLD BANK GROUP INTERVIEW Diego Molano Vega is Colombia’s Minister of Information Tech- nologies and Communications. In 2010, Molano created Plan Vive Digital, the ambitious national technology plan that places Colombia among one of the top countries in the region for information and communications technology (ICT) progress. Here, he gives Handshake readers an inside perspective on how Interview by the strategy developed, why it’s been so successful, and what Alison Buckholtz steps other governments can take to achieve similar results. You’ve described Plan Vive Digital as a virtuous cycle, where better infrastructure will allow more and bet- ter services at lower prices, which in turn stimulates the development of content and applications, and thus the growth of demand. How have you seen this work in practice? Infrastructure is key: in the last four years, we consolidated one of the largest high speed broadband infrastructures in the region, where 96 percent of the municipalities in Colombia now have a fiber optic backbone and the additional 4 percent of the municipalities will be connected with microwaves by 2015. We also promoted competition in the mobile service, where now we have 10 mobile operators. Six of them operate 4G networks. We have been working hard to connect the SMEs, where Internet pen- etration increased from 7 percent in 2010 to 60.6 percent in 2014. For households, while only 17 percent were connected in 2010, 50 percent will be connected at the end of this year. PUBLIC-PRIVATE PARTNERSHIPS | 61 to strengthen the demand side of the digital But you weren’t satisfied with ecosystem. This new Plan has two main goals: those numbers. Why? to be world leaders in the development of social Having this backbone infrastructure was not applications aimed at the base of the pyramid, enough. We needed to reach the final users at and to be the most efficient and transparent the base of the pyramid and the rural areas of government through ICT. Colombia. We addressed this issue by creating Community Internet Centers: 899 Puntos Vive Digital, and 7,621 Kioscos Vive Digital (rural Two of your goals include encour- centers of more than 100 inhabitants). In those aging good government through centers we provide training, connectivity, tele- the use of ICTs and giving citizens phony, entertainment, and other tech services. the power to interact with the The Ministry has also delivered 2 million state through the use of ICTs. How computers and tablets to public schools and has this changed the way people libraries. To be consistent, this strategy has been reinforced with training for teachers and think about the government and children. Other strategies implemented are the how it works for them? ViveLabs (digital content centers) aimed to Colombia is a leader in e-government in Latin foster the digital content industry, such as video America. Colombian citizens interact even more games, animation, and audiovisual. Apps.co, our with the state because many procedures are now digital entrepreneurship program, has more than done online in a faster and efficient way. Today, 66,000 entrepreneurs being trained in business we have more than 2,000 public services online. models and ICT skills. As Plan Vive Digital’s milestones Having this backbone are reached, how do your goals infrastructure was not and strategies for the project enough. We needed to change? reach the final users at In 2010 we had 2.2 million broadband connec- the base of the pyramid tions in the country. Now have more than 9.3 and the rural areas of million. Infrastructure is still very important, Colombia. and we have to keep increasing that number. But the new Digital Plan 2014–2018 aims 62 | WORLD BANK GROUP However, we still have some challenges. In order to accomplish our goals, we will require that Congress, the regional governments, the private state entities share online information; we will sector, and the international community that also implement digital rights for Colombian we crafted a solid ICT policy. And most impor- citizens, for which we will create the “Digital tantly, we showed them the importance of ICT Citizen Folder.” Through this “folder,” every in every sector of the economy and how tech- Colombian will have an ID, an email, a space nology can help address the main concerns of in the cloud, and access to all e-government the country. In our case, this includes reducing services. poverty, creating jobs, and fostering productivity and competitiveness. What advice would you give to All eyes were on us, because Plan Vive Digital was so ambitious. Over time, because of hard government officials in other work, our results were even better than we ever countries who want to create expected. a Plan Vive Digital of their own? Plan Vive Digital has been effective at involv- ing all the stakeholders, and this is the key What elements of Plan Vive Digital to success. Despite tough situations, we have are public-private partnerships, explained and internalized the necessity of digital and how can such partnerships development in our country. This has been one advance national ICT strategies in of the greatest, and not so visible, achievements. We managed to demonstrate to the Colombian general? The first principle of Plan Vive Digital is “the market as far as possible, the State as far as needed.” It is a quote from President Santos’ book, The Third Way, which was written in 1999. The first principle of Plan What it means is that for every project of the Vive Digital is ‘the market Ministry we aim to promote public-private part- as far as possible, the nerships to expand infrastructure and services in State as far as needed.’ the country. The Plan has always sought to make public-private alliances in order to encourage investment. One of the Ministry’s most impor- tant roles is to generate public policies that will grow the private sector. PUBLIC-PRIVATE PARTNERSHIPS | 63 ICT IN FRONTIER MARKETS Mitigating risks brings rewards Photos (from left to right, top to bottom) © World Bank; © World Bank; © cotesebastien/istockphoto. Used with permission. Further permission required for reuse.; © Charlotte Kesl/World Bank; © Tom Perry/World Bank. Frontier markets continue to offer opportunities or shareholder agreements when these involve and higher rates of return for ICT investors as the government (as with partial privatizations, or other markets have become saturated. Over the broadband public-private partnerships). Another past several years, eager consumers in countries challenge for telecommunications projects, such as Afghanistan, Iraq, and Myanmar have whose revenues come in local currency, is the sought to join the connectivity revolution. Yet ability to convert and transfer earnings outside investors are aware of the significant and unique the country in order to pay dividends or service risks associated with these markets—especially hard-currency debt. In addition, for frontier with key sector regulatory instruments such as markets that are affected by conflict, the risk of licensing and frequency allocations. sabotage and destruction of assets can be acute. ICT operators are often concerned about the possibility a host government will impose RISK INSURANCE TO THE RESCUE arbitrary or discriminatory changes to terms and Awareness of these risks has resulted in a steady conditions or cancel licenses, concessions, and/ demand for political risk insurance coverage of 64 | WORLD BANK GROUP SERVICES and spectrum—their most valuable assets. They are particularly interested in obtaining protection against arbitrary changes made by host govern- ments to terms and conditions of licenses. These risks can be particularly prevalent in countries where a political transition is triggered by events such as a coup d’état. MIGA’s research on political risk bears out this prevailing concern in the broader investment For frontier markets that are affected community: adverse regulatory change is cited by conflict, the risk of sabotage and as the risk of most concern to investors. destruction of assets can be acute. Awareness of these risks has resulted in a steady demand for political risk EXPERIENCE PAYS insurance coverage of ICT investments MIGA’s experience in managing potential claims over the past decade. highlights the broad range of political risks in the telecoms sector. In one MIGA-guaranteed investment, the host country government unilat- By Yann Burtin, MIGA erally closed several private cellphone operators. In this case, the government first attempted to make a retroactive increase of 600 percent in the 10-year licensing fees of the MIGA-insured ICT investments over the past decade. The Mul- cellular phone company, and then simply termi- tilateral Investment Guarantee Agency (MIGA), nated the company’s license. the political risk insurance arm of the World Bank Group, has supported projects in nearly 30 countries, including Afghanistan, Democratic Republic of Congo, and Iraq. MIGA’s robust pipeline coming from well-established and new Adverse regulatory change operators (both mobile 4G and broadband), pri- is cited as the risk of most marily in lower-income countries, testifies to an concern to investors. ongoing demand for risk mitigation for telecoms investments. In MIGA’s experience, operators who approach MIGA to discuss political risk insurance are con- At the request of its guarantee holder, MIGA cerned about issues surrounding telecom licenses met with the government to discuss the suspen- PUBLIC-PRIVATE PARTNERSHIPS | 65 TYPES OF POLITICAL RISK OF CONCERN TO INVESTORS IN DEVELOPING ECONOMIES (PERCENT OF RESPONDENTS) Adverse regulatory changes Breach of contract Transfer & convertibility restrictions Civil disturbance Non-honoring government Expropriation/nationalism Next 3 years Terrorism Next 12 months War 0% 10% 20% 30% 40% 50% 60% 70% Source: MIGA-EIU Political Risk Survey 2013 sion and noted the detrimental impact of the In another country, military authorities seized government’s actions on the nation’s investment and denied an operator’s access to its cellphone climate, especially given the government’s pub- towers. This situation would have warranted licized desire to make the country attractive to a business interruption claim under war and investors. Continued negotiations, the assistance civil disturbance coverage, or possibly even an of the World Bank, and diplomatic pressure expropriation claim. Ultimately the assets were from the investor’s home country resulted in returned to the operator because the host coun- an amicable settlement of the dispute and the try authorities did not want to trigger a claim issuance of a new license. Immediate interven- under a MIGA guarantee. tion and the prospect of reduced foreign direct investment helped to achieve a resolution in only MIGA also intervened in a case where an opera- a few months. tor encountered difficulties in converting locally 66 | WORLD BANK GROUP earned currency in order to repay its loans. contributions to the country. The company Again, MIGA drew on its leverage as part of offers its customers a range of affordable tele- the World Bank Group to resolve the issue with communications services, including cellphone, the central bank of the host country. Transfers Internet, satellite, and public pay phones. were completed in a timely manner, allowing the investor to repay its loans. MORE IMPORTANT THAN EVER MIGA is supporting MTN Afghanistan, one of Operators who approach MIGA Afghanistan’s four major mobile operators. The to discuss political risk insurance company has been remarkably successful and are concerned about issues boasts over 6.2 million subscribers as of June 2014. MIGA first provided coverage to MTN surrounding telecom licenses in 2007 when it started its operations in the and spectrum—their most country. The MIGA guarantees covered MTN’s valuable assets. installation and operation of a mobile GSM net- work via its Afghan subsidiary. In 2011, MIGA issued an additional guarantee totaling $80.4 million for a period of up to 10 years, covering the expansion of the company’s operations. Intervention has been key to successfully mitigat- ing political risks in the ICT sector. In Afghani- It’s worth noting that MIGA’s coverage for war stan, for example, the World Bank supported and civil disturbance was not used in this invest- reform of the telecommunications sector with ment, as the operator was able to obtain coverage a comprehensive package of capacity building, at a more competitive rate through its corporate support for drafting of legislation and licenses, political violence insurance program. MIGA and rehabilitation of the government’s network. is covering the investment against the risks of From having a single operator with a barely transfer restriction and expropriation, which functioning network in 2002, Afghanistan is were deemed as essential in a relatively untested now home to a thriving and competitive indus- regulatory environment with limited capacity, try that benefits local consumers and businesses. a weak public sector, uncertain property rights, That’s the definition of turning risk into and pronounced insecurity. reward. Despite these grave risks, MTN continues to enjoy high profitability while making significant PUBLIC-PRIVATE PARTNERSHIPS | 67 Mind the [Gender] Gap Why broadband and mobile matter for women 68 | WORLD BANK GROUP SERVICES CALLING FOR GENDER EQUALITY “More than twenty years after the birth of the Internet, two- thirds of the planet’s population still do not have regular access to the Internet, and a greater proportion of these unconnected global citizens are women. The International Telecommunica- tion Union (ITU), the United Nations specialized agency for ICT, estimates that some 200 million fewer women are online than men. Women are coming online later and, as a gender, more slowly, than men. Digital gender gaps reflect gender inequalities throughout societies and economies—a range of socio-economic and political factors affect gender divides, with attitudes and cultural beliefs likely to be self-reinforcing. Women or girls may be choosing not to go online, or be prevented from going online, because there is a belief that women and girls cannot master technology—but if women fail to go online, they may never mas- ter technology, and miss out on acquiring vital ICT skills which are helpful in everyday life, and increasingly essential in the modern digital economy. Women may also miss out on new opportunities of earning more income, starting a new business, accessing or selling products to new markets, participation in decision-making processes that affect their lives, finding or changing jobs, or forg- ing new contacts and accessing information—in short, women may miss out on the new digital opportunities offered by access to the Internet and broadband. For these reasons and more, in March 2013, the ITU/UNESCO Broadband Commission for Digital Development endorsed a fifth broadband advocacy target, calling for gender equality in access to broadband by 2020.” —from “Doubling Digital Opportunities: Enhancing the Inclusion of Women & Girls In the Information Society,” a report by the Broadband Commission Working Group on Broadband and Gender, 2013. I​ TU and UNESCO set up the Broadband Commission for Digital Development in 2010, responding to UN efforts to meet the Millennium Development Goals. PUBLIC-PRIVATE Photo © pixelfusion3d/istockphoto. Used with permission. PARTNERSHIPS Further permission | 69 required for reuse. By Henriette Kolb, IFC Mobile telephony has the power to do this and overcome other social and economic bottlenecks MOBILE PARTNERSHIPS faced by women. However, there’s the not-so- BUILD small matter of getting mobile phones into the hands of women that need them most. Across the developing world, several partnerships are underway to overcome this access gap. A BRIDGE FOR WOMEN INDIA In India, mobile operator Telewings, also known as Uninor, partnered with GSMA, a trade Studies have shown that women reinvest 90 organization for mobile operators, to roll out a percent of their incomes in community and fam- pilot project to launch a service featuring a pair ily versus roughly 35 percent for men. And yet of linked SIMs; recharging one with airtime women are frequently shut out of fully benefit- will top up the other with bonus minutes. The ing from and contributing to economic activ- only criteria is that at least one of the SIMs ity owing to constrained access to health care, must be used by a woman. Uninor hopes its trial education, market information, and financial will shed light on barriers to women’s access to services. mobile phones and services, and improve tele- density among rural Indian women. According to recent data, 300 million fewer women than men across the world use mobile AFRICA phones. But those that do enjoy enhanced In Sub-Saharan Africa, as mobile penetration access to information and markets, and can has grown rapidly, demand has developed for more effectively participate in and contribute to more sophisticated mobile financial products. In economic activity. This improvement in women’s Ghana, a partnership of local operator Tigo and productivity and livelihoods is critical not only the insurance firms MicroEnsure and Vanguard for development but for GDP. Vodafone has put Life offers Family Care Insurance, a free-of- the economic value of closing the mobile gender charge life insurance plan. Tigo customers gain gap at $6.6 billion, and that figure covered only cover based on airtime purchases made during the 27 markets in which it is active. Figures like the previous month, which makes Tigo “stickier” this demonstrate that mobile is no longer “just” to its subscribers. In markets where the vast about making a call—it’s about making the call majority of mobile users buy pre-paid cards and for shared prosperity beyond gender and geo- may switch among as many as three SIM cards, graphical barriers. customer loyalty is essential to mobile providers. 70 | WORLD BANK GROUP The value of this life insurance offering to poor Ghanaian families is difficult to overstate. MicroEnsure claims that because “less than two Thanks to Text to Treatment I was able to percent of Ghanaians have a life insurance policy, receive treatment for fistula at the CCBRT families typically sell assets, [and] use savings to hospital. My travel cost was paid for via finance funerals. Women and children are often M-Pesa. I needed two operations but now I the first to be affected; children are removed am able to work and lead an active life. I’m from school and women and children forgo an ambassador for CCBRT and I find other patients who can benefit from treatment. proper nutrition and healthcare.” I’ve even rented a house that they can stay in while they wait to travel for surgery. Mobile banking also offers a path to better health and safety. For instance, with support Elizabeth lives with her two children and husband in from the Vodafone Foundation, a Tanzanian Mbeya, 830 kilometers from Dar es Salaam. hospital recently set up Text to Treatment, a service that uses the online currency service M-Pesa to facilitate treatment for obstetric fistula—a childbirth-related condition that affects one million women worldwide. Prospec- tive patients receive cash transfers via M-Pesa for transport costs; service “ambassadors” receive Source & photo credit: Connected Women, Vodafone. rewards for each patient referral. MOBILE BANKING AND THE “STICKY” FACTOR: THE STORY OF M-PESA This 6-minute animation tells the story of how M-Pesa, the popular mobile money transfer program, came to Kenya. It's narrated by Michael Joseph, the managing director of mobile money at Vodafone and the program's founder. PUBLIC-PRIVATE PARTNERSHIPS | 71 By Sevi Simavi, Cherie Blair Foundation for Women Pho t o© Ch MOBILE PARTNERSHIPS er i FEED eB lai Fo r un d a ti on ENTREPRENEURSHIP There’s no disputing that mobile phone owner- stock orders. In partnership with SEWA and the ship, coupled with value added services, gives Vodafone Foundation in India, the Cherie Blair women in business a chance to succeed. But Foundation developed a mobile-based manage- when the mobile industry and the develop- ment information system to support the RUDI ment sector partner to offer sustainable, tailored network. solutions for women entrepreneurs, the results are transformational. The Cherie Blair Founda- Before the inception of the system, RUDIbens tion’s partnership with Self Employed Women’s traveled up to seven hours to order and collect Association (SEWA) and Vodafone Foundation stock from the RUDI processing centers, only to in India is an ongoing example of how mobile find the products unavailable because of difficul- technology makes a lasting difference in women’s ties forecasting demand. The mobile application lives. now enables the women to place orders and generate sales reports using their simple feature SEWA’s Rural Distribution Network (RUDI) phones. The information is sent to a cloud-based is a successful agricultural cooperative with server using inexpensive SMS and orders are 3,000 members. Based in Gujarat, India, RUDI instantly captured on the RUDI management buys raw produce, such as lentils and spices, computers, providing greater visibility of their from local farmers and adds value by cleaning, sales by product, geography, and RUDIben. processing, and packaging the stock. These are Since the application launched in December then sold across Gujarat through a network of 2012, RUDI has increased its turnover by 10 saleswomen, known as “RUDIbens,” reaching percent. over a million households annually. This model proves that for women entrepreneurs The growing scale of RUDI’s operations could in developing economies, even the most basic no longer be supported by its informal paper- phones can be the key to increasing income and based management system and word-of-mouth managing their businesses. 72 | WORLD BANK GROUP ion dat un Fo l air erieB Ch o©t Pho nd ation Fou lair B ie er Ch AND THE WINNER IS.... o© Phot The RUDI Sandesha Vyavhar appli- cation is the winner of the 2014 GSMA Global Mobile Award for Best Mobile Product, Initiative, or Service in Emerging Markets and the 2014 mBillionth award for mWomen and Children. cherieblairfoundation.org/mobile. PUBLIC-PRIVATE PARTNERSHIPS | 73 & The Old Man ICT HOW TECHNOLOGY PPPs CAN REEL IN PROGRESS By John Kjorstad, KPMG Our world is filled with advancing information Infrastructure is expensive and built to operate and communications technology. Most of us for decades. ICT changes overnight. It may sur- can’t escape it—a buzz in the pocket whenever prise you to recall that Apple’s first iPhone (the an email has landed or a blinking notifica- one that didn’t allegedly bend in your pocket) tion that suggests something important has was released less than 10 years ago, in June 2007. happened. The first iPad debuted less than five years ago, in April 2010. These devices, and others like them, (The author pauses to check his smartphone... have revolutionized human behavior in terms of someone he has never met completed an ice e-commerce and how we process the information bucket challenge, and his recently purchased we use to interact with everyday infrastructure. copy of Ernest Hemingway’s The Old Man And The Sea has been dispatched by Amazon.) I can now wield my phone to pay for my daily commute by using “tap and pay” to pass through It’s become part of the fabric of our lives—for the same barriers as those carrying paper tickets. better or for worse. I can also find out if my train is delayed by checking an app long before I’ve arrived at the Government and infrastructure are different. station—diverting my commute to alternative They are “salao” in the words of Hemingway, and routes if there are any reported issues. The train particularly unlucky when it comes to modern- operators haven’t created this technology on izing information and communications technol- their own. They’ve partnered with those with the ogy (ICT). For them, this pursuit is not unlike expertise to deliver a more effective service. Santiago’s literary battle with the great marlin. It’s not that ICT is beyond their capability, but with their rigid institutions and long-term PURSUING POLITICAL CHANGE investments in aging assets, they are ill-equipped This sort of instant information changes every- to stay ahead of rapidly changing technology. thing—even how our elected officials choose to 74 | WORLD BANK GROUP INSIDE INFRASTRUCTURE The concept of e-government and e-infrastruc- interact with us. Gone are the days of a passive ture has been slower to catch on, and it’s not democracy when politicians would canvass surprising why. Government, infrastructure, local opinion on the campaign trail ahead of and public services are institutions where rapid an important election. Welcome to the age of change poses a significant risk to public order. 24-hour news and an active democracy, where Even when change is encouraged, it is rarely millions of smartphone users can sway public executed cheaply, swiftly, or without great opinion overnight, forcing elected leaders to difficulty. react more swiftly. For decades the U.S. government has grappled YouGov, an online polling and research firm with plans to transform American air traffic in the United Kingdom, raised eyebrows in control from a ground-based to a satellite-based September ahead of Scotland’s referendum for system. The disappearance this year of Malaysia independence. The firm uses a reward system Airlines flight MH370 may finally spur real and email to attract users and get them to com- action. However, by the time a new system gets plete online surveys. Its tightening poll numbers implemented—might the technology already ahead of the historic Scottish vote—some of be out of date? How can governments ensure which even suggested a lead for the Yes cam- that they remain in step with the rapid pace of paign—spurred political action from a nervous change instead of forever trailing it? establishment. Leaders from the UK’s three main political parties united to promise Scots more One good example to follow is the health sec- devolution in exchange for a No vote less than tor, which uses private partnering and service 24 hours before polling stations opened. The contracts as an effective method for managing next day YouGov published its final poll shortly technology risk and leveraging professional after voting ended: No-54 percent to Yes-46 expertise—including upgrades when relevant percent—an accurate forecast of the eventual 55 new technologies become available. The public percent—45 percent official result. sector can effectively transfer this risk onto a private partner who is then incentivized to stay DON’T CATCH THIS FISH ALONE ahead of the technology curve. These provisions Advancing technology will continue to redefine will work for ICT as well. our individual relationship with government and public services. The establishment would be Governments can no longer afford to ignore ill-advised to try and land this fish on its own. technology. The momentum behind ICT is as By partnering with the private sector to get the unrelenting as it is sophisticated. The public best out of ICT, government can drive competi- sector must adopt a strategy for managing it. tion, promote innovation, and demand perfor- Smarter infrastructure is better infrastructure mance through concession-based public-private and technology partnerships will deliver better partnerships. value-for-money over time. PUBLIC-PRIVATE PARTNERSHIPS | 75 Illustration © esenkartal/istockphoto. Used with permission. Further permission required for reuse. 1 76 | WORLD BANK GROUP 2 3 4  5 7 8 CONNECTIVITY 6 SERVICES the When the Millennium Development Goals (MDGs) were originally defined in 2002, no one could have imagined what an important part Information and Communica- tions Technology (ICT) would play in accelerating progress. Here are just some of the ways ICT brings each of these goals within reach. ERADICATE EXTREME ENSURE ENVIRONMENTAL POVERTY AND HUNGER SUSTAINABILITY ICTs can help reduce poverty by increasing Broadband networks have made an impor- access to economic opportunities, allow- tant contribution to ensuring environmental ing for the expansion of local businesses, sustainability. These networks improve practices strengthening social networks, and reducing in agriculture and forestry; monitor air and and averting transportation costs. Access to water pollution; improve disaster warning and knowledge assets—information, expertise, relief; improve the efficiency of the energy, market price data, and basic healthcare and transportation, and goods and services sectors; nutrition guidelines—can also improve and harness social networking for transforma- living standards and bring people out of the tive change. poverty trap. Connectivity is key to making this happen; available data suggests a strong and positive correlation between commu- nications and levels of development. At the GLOBAL PARTNERSHIP micro level, even for very small fishing and farming businesses, good communication FOR DEVELOPMENT links facilitate market matching efficiencies. Connectivity afforded by ICTs and the increase of broadband availability has encouraged global & By Jose Toscano, INTELSAT partnerships and facilitated cooperation in many areas. PUBLIC-PRIVATE PARTNERSHIPS | 77 ACHIEVE UNIVERSAL PRIMARY EDUCATION Education contributes to the overall eco- PROMOTE GENDER nomic growth potential of a nation, and EQUALITY AND broadband-enabled ICT enables the devel- EMPOWER WOMEN opment of m-learning and e-learning. Women remain economically and socially mar- ginalized and undereducated in many emerging IMPROVE economies and rural areas. ICTs can give these HEALTH  women access to education, healthcare, govern- ment services, employment opportunities, and ACCESS financial services. In particular, there’s a poten- ICTs and broadband telemedicine have tial virtuous circle at play between mobile finan- already made a significant impact with rela- cial services and access for women. One study tively simple and low-cost technology. It has across five diverse, emerging markets shows that helped to reduce child mortality; improve women consistently prove to be highly active maternal health; and combat HIV/AIDs, household financial managers and could benefit malaria, and other public health issues in greatly from access to mobile financial services. many areas of the world. 78 | WORLD BANK GROUP ICT BRINGS DOCTORS AND PATIENTS This network allows doctors at Children’s National TOGETHER Medical Center in Washington, D.C. to conduct med- ical consultations and training sessions with health Intelsat’s satellite technology supports associations care professionals in Morocco, increasing efficiency at in the fight against HIV/AIDS in Africa. The Global a low cost. Digital Solidarity Fund is using a DVB/SCPC service technology out of Intelsat gateway hub station in Fuchsstadt, Germany to support associations in the EDUCATION VIA SATELLITE fight against HIV/AIDS in Burundi and Burkina Faso. Intelsat and Mindset, a developer and distributor of The new Internet connections create a link with clin- educational materials in Africa, have developed a ics located far from urban centers. Bush doctors have partnership to support increased access to educa- access to high throughput IP two-way connectivity tion via satellite. Their mission is to provide quality with leading hospitals in Africa and worldwide. With Internet access and support to deliver educational this technology, patients can be monitored regularly, materials to schools, hospitals, and clinics in South starting with their first visit to the clinic doctor. Africa, as well as to homes. Applications include Intelsat has also provided satellite capacity to support distance learning, telemedicine, video conferencing, an international telemedicine network in Morocco. and voice communications. PUBLIC-PRIVATE Photo © Jorge Gobbi/Creative Commons PARTNERSHIPS | 79 license, creativecommons.org;licenses/by-sa/2.0 FAST FACTS WHAT’S CONNECTIVITY WORTH? Of the world’s 7 billion people, only 2.7 billion have access to the Internet today. A Deloitte study finds that extending Internet access in Africa, Latin America, India, and South and East Asia to levels seen in developed countries today would deliver these results: $ The resulting economic activity could generate $2.2 Personal incomes would Long run productivity could trillion in additional GDP, a increase by up to $600 per be enhanced by as much as 72% increase in the GDP person per year, thus lifting 25% in these developing growth rate, and more 160 million people out of economies. than 140 million new jobs. extreme poverty. Evidence on the link between 2.5 million HIV/AIDS patients Another 640 million children health literacy and mortality could increase their life may be able to access the rates suggests that Internet expectancy thanks to better Internet and the wealth of access could save 2.5 million monitoring and adherence information it makes avail- people and 250,000 children. to treatment. able while they study. Source: Value of connectivity: Economic and social benefits of expanding Internet access, February 2014. Deloitte. 80 | WORLD BANK GROUP Jarle Naustvik/Creative Commons license, creativecommons.org;licenses/by-sa/2.0 Freedom of connection with any appli- cation to any party is the fundamental social basis of the Internet. And now, [it] is the basis of the society built on the Internet. —Tim Berners-Lee, creator of the World Wide Web, on Net Neutrality Subscribe: ifc.org/handshake Connect with us: twitter.com/WBG_PPP scribd.com/WBG_PPP ifcppp.tumblr.com handshake@ifc.org October 2014