Ministerial Roundtable – “Cutting the cost: can affordable access accelerate digital transformation?”

Digital World 2021 Highlights October

Opening the first Ministerial Roundtable session at ITU Digital World 2021, moderator and ITU Deputy Secretary-General Malcolm Johnson urged panelists from government and the private sector to explore ways in which digital access can be made more affordable, including government subsidies, incentives, networking sharing, regulatory reform and new spectrum policies.

International standards developed by ITU and other standardization bodies enable manufacturers to develop products in larger volumes and for multiple markets, driving competitiveness, economies of scale and, ultimately, lower costs for consumers, he reminded the panel. Spectrum licencing policies can also contribute to lowering prices to achieve nationwide coverage, in particular in developing markets. Multistakeholder collaboration and cooperation are essential:  “Together we need to redouble our efforts to create a more affordable and accessible ecosystem for the benefit of all.”

Digital transformation is a mindset

Nearly two years after the outbreak of COVID-19, the tremendous challenges created by the pandemic can be turned into an opportunity to foster digital transformation, said Nguyen Manh Hung, Minister of Information and Communications, Viet Nam. And developing countries may be at an advantage. “Digital transformation is a fundamental change – developing countries have less to replace, and less to remove, so can move more quickly and make changes faster,” he said, citing as an example the breakout success of mobile banking in Kenya.

“Digital transformation is a mindset, too,” he added, calling for enabling regulatory frameworks and new government approaches such as regulatory sandboxes. The success of digital transformation depends on the CEO of a company, not its technical officers, and on the prime minister of a country, not its ICT minister. This is the main difference between IT obligation and digital transformation.

Digital infrastructure has a key role to play in digital transformation. Vietnam is accelerating 5G coverage, allocating 25% country coverage to each of its four operators to build out 5G infrastructure and share through roaming to cut investment costs. Switching off 2G networks from 2023, and providing government subsidies for 4G handsets to the remaining 2G users, will promote internet access by ensuring all mobile users are internet ready.  Government has a vital role to play in transforming public services in digital services, supporting the digitalization of critical sectors such as healthcare, finance education and transportation, and creating an enabling environment for digital transformation.

Pham Minh Chính, Prime Minister, Viet Nam, echoed the need to change mindsets and working methods in societies and governments to turn the challenge of the health and economic crisis into an opportunity for even more robust growth, powered by the proven superiority of digital technologies. “Digital transformation to build the digital world does not belong to any single country, organization or individual. No country, organization or individual can be exempt from humanity’s digital transformation process,” he said. This is a global matter, calling for a global response and international collaboration. Governments everywhere must set the course and take the lead to effectively implement and leverage the new values of the digital space in all aspects of digital life.

“Digital transformation must revolve around people as the subject and object for development. This process will only truly succeed when every citizen can actively participate in digital transformation and reap its benefits.” Government should steer towards this aim and ensure no one is left behind, whilst working with international organizations such as ITU to ensure cybersecurity and digital sovereignty.

Vietnam’s rapid and sustainable development is based on science, technology and innovation as the guiding principle for economic development strategies and moving towards a green digital society.  International cooperation is important in working for digital economies and societies, in particular in transferring technologies, building capacity and skills, and attracting quality investment.

Invest in industry to connect

Houlin Zhao, Secretary General, ITU, reminded panelists that half the world may already being enjoying the future in the form of digital transformation – “but the true measure of success will be when everyone has access to affordable ICTs and the other half of the world is connected.” Infrastructure supported by appropriate policy frameworks is the key, and this can only come about with investment. Investment means attracting investors to not just wealthy, urban or obvious areas but to those that are not seen as profitable, the rural, remote and impoverished.  The industry is expected to roll out and maintain networks to the underserved on the one hand and invest in future networks to support transformative technologies such as 5G on the other – it cannot do this alone.

The ICT industry needs financial support and innovative approaches from government to incentivise, subsidise and promote investment and partnerships across the digital ecosystem. This includes new, flexible regulatory and policy frameworks that embrace collaborative participation. “Affordable access is everybody’s responsibility,” he said.

Meaningful connectivity and quality of service

Affordable access can accelerate digital transformation, but it is critical that those who are connected have sufficient quality of service to integrate the most powerful features such as online learning, telehealth and video streaming, said Rashad Nabiyev, Minister of Transport, Communications and High Technologies of the Republic of Azerbaijan. “At the centre of the debate is meaningful connectivity, which is achieved when everyone can use the internet every day using an appropriate device with enough data and fast connection.”

Government can play an active role in supporting backbone infrastructure, in particular where private companies do not have sufficient resources to reach remote areas. Incentivising private investment in digital infrastructure through public private partnerships has enabled Azerbaijan to reach an additional 150 000 households in rural areas over the course of 2021, to complement the 85% of the urban population with broadband access.  Providing access to long term financing at lower interest rates will encourage smaller providers to partner with the government and implement this project in smaller districts, so that by 2024 all the population will have broadband internet access.

Affordability can be increased by encouraging competition between private broadband service providers in the last mile segment, smart regulation focused on affordability and a mix of fixed wireless access models and fixed-mobile infrastructure.

Minister of Post and Telecommunications for Cambodia, Chea Vandeth, spoke of the need to work closely with mobile operators to ensure continuous investment in infrastructure, coverage and low cost connectivity. Cambodia’s priorities include promoting connectivity by extending backbone infrastructure far across the country in cooperation with the private sector; enhancing the efficiency of infrastructure development and quality of service for end users through infrastructure sharing and quality of service standards; and adapting the regulatory framework to enhance digital capability and capacity, digital government, cyber security, spectrum management and allocation. Digital literacy and skills have been promoted through digital training courses for government officials, as well as scholarship programmes “to spur interest in tech subjects among our students” and promote digital transformation.

Local content, digital literacy

Government –subsidized internet access and devices will increase access, but the impact is greatly reduced if this is not complemented by digital literacy initiatives and relevant content to promote the use of digital technology, stated Paola Vega Castillo, Minister of Science, Technology and Telecommunications, Costa Rica.

During the pandemic, the government doubled the benefits offered by connectivity programmes providing internet access to low income populations, including loans and subsidies to students for devices and access plans. Subsidies must be accompanied by digital skills training to support the use of digital technologies in study, work and entrepreneurship, drive social and economic development and reduce poverty, especially in rural areas.  Increased numbers of users – and skilled users – will generate sustained demand for telecom services, creating more attractive and profitable markets for operators in a virtuous circle of investment.

Costa Rica is currently developing a new national broadband plan for the next five years, including local government as an important stakeholder with first-hand information on the priorities and necessities of communities and their economic activities. “We envision public private partnerships with local government and regional operators to speed up the process of infrastructure development and last mile connectivity,” she said, as an important action to ensure meaningful connectivity to the population.

Boviengkham Vongdara, Minister of Technology and Communications, Lao P.D.R, highlighted three main issues in driving digital connectivity: “Pricing and infrastructure, local content and digital skills and awareness.” During the pandemic, the government of Lao worked with operators and service providers to encourage network expansion and internet promotion where possible. Its localization programme aims at creating relevant digital content in local languages to drive adoption, and digital skills training focuses on schools and local authorities in the provinces and rural areas.

“But the digital divide still remains with fast-changing technology. Cutting costs is only part of the solution. The key to digital transformation is collaboration in the ecosystem,” in terms of infrastructure and digital literacy, he concluded.

Spectrum policies and regulation

Affordable access to ICTs is paramount in promoting inclusive economic growth and stimulating the digital economy towards achieving the UN SDGs, said Devusinh Chauhan, Minister of State for Communications, India. He outlined how India’s 1.2 billion telecom subscribers enjoy some of the cheapest data plans in the world. One of the world’s largest rural optic fibre roll outs connects 600 000 villages in India through a flexible initiative covering every corner the country to spur socio- economic development.

Recent government reforms in the telco sector include increasing spectrum tenure from 20 to 30 years following all future auctions, allowing 100% foreign investment and better meeting the liquidity requirements of telco providers to enable investment in broadband and increase penetration, connectivity, competition and customer choice in marginalized areas. Government support at the highest level is critical for accelerating digital transformation for all.

For Karim Lesina, EVP Chief External Affairs Officer, Millicom, two ideas are central to bridging the digital divide and connecting rural and remote areas: new approaches to spectrum, and modernized regulatory frameworks.

“Let’s think in a bolder way on spectrum, and look at it as part of the strategic approach of every government to allow every telco operator to deploy services at a lower cost as an important part of networks costs in rural areas,” he urged. Operators commit to increasing coverage in remote areas as much as possible in exchange for decreased spectrum costs as part of public private partnerships, he added, citing the successful example of such an agreement in Panama.

New regulatory approaches fit for purpose in the current environment must be developed as soon as possible. We must stop working on the basis of regulations developed twenty or thirty years ago, where the climate and nature of the ICT sector was very different, if we are to rise to the global challenge of connecting everyone in developed and developing economies alike.

Digital transformation has disrupted regulatory structures and traditional frameworks organized on a sectoral basis, agreed Ramiro Camacho, Commissioner, IFT, Mexico. Regulatory authorities are attempting to balance the regulatory burden between traditional telco operators and digital platforms to enable investment in innovation.

The cost of providing coverage to the millions unconnected in Mexico is around 1.5bn USD, with the majority of the underserved in rural or hard to reach areas. “Private investment is the engine behind the growth of digital access, but we need additional funds for distant, remote and rural areas.”

Universal service policies to close the digital divide in Mexico include public private networks to operate and manage wholesale sharing networks; federal government provision of community telecoms and internet services in hospitals, schools and public buildings in partnership with electricity companies; decreased taxes and sector-specific fees; mechanisms to reduce spectrum costs for mobile operators, including credit for spectrum licence fees through infrastructure deployment in rural areas.

Infrastructure sharing and rights of way

COVID-19 has highlighted the need for robust broadband networks to continue social and economic activities, agreed Tin Aung San, Union Minister, Ministry of Transport and Communications, Myanmar. He noted: “Businesses need to reengineer strategies to embrace technology, survive and grow during the pandemic and beyond; government must integrate ICT and digital technology into other economic sectors.”

Despite Myanmar’s impressive access rates, with 96% of the population accessing mobile networks and 140% internet penetration, there is still a disparity between urban and rural usage in terms of connectivity, accessibility and affordability.

The four key pillars of successful, people-centred digital transformation are infrastructure, investment, inclusiveness and innovation. Investment in ICT infrastructure is decreasing whilst demand for services is increasing making universal access difficult as services are both less affordable and less accessible.  Developing appropriate policies to facilitate continued investment in infrastructure and adopting enabling policies is therefore key.

These include active and passive infrastructure sharing, innovative approaches for more effective use of spectrum and rethinking universal service strategies. Myanmar is additionally making public land available for siting telecom infrastructure, setting prices across different regions and developing universal service strategies to reduce costs and increase affordability.

In Nigeria, with a population of 210 million, broadband penetration of the landmass is around 50% and of the population 60%, according to Isa Ali Ibrahim Pantami, Minister of Communications and Digital Economy, Nigeria. Accelerated broadband penetration in recent years has been achieved following the conclusions of a special commission of public and private sector experts outlining the obstacles and addressing them as far as possible.

One major challenge is the price of right of way, which varied greatly across different states but tended in general to be disproportionately high. These rates were reduced significantly across the country, or abolished entirely, allowing mobile network operators to accelerate penetration. Incidences of vandalization of infrastructure, another serious issue, were reduced by 80% through the provision of government approved security services. Tackling multiple taxation brought down costs by aligning local, state and federal taxation policies. A national digital strategy for the digital economy was development to increase digital administration.

Ending digital inequality

“We urgently need to reimagine our world as one where digital inequality and exclusion are excluded,” exhorted Jean Philbert Nsengimana, Honorary Chairperson, Alliance for Affordable Internet (World Wide Web Foundation) in his passionate intervention.  Technology should work for everyone, everywhere, not just the privileged. The global pandemic revealed vast inequalities in access, type and quality of access, with millions of children missing out on education alone. One billion people still live in areas where basic access is not affordable; more than half of the world’s low- and middle income countries have not yet reached “1 for 2”, where 1GB of mobile broadband data is priced at 2% or less of average monthly income.

“The digital divide is not about being on line or off line but about meaningful connectivity – everyday use on an appropriate device with fast connection,” he said. He outlined three important steps to closing the divide – and creating billions of dollars through additional economic activity which could be spent on government priorities such as housing, education and healthcare. Governments must incentivise the right investment to realise meaningful connectivity, at an estimated cost of USD 428 billion worldwide by 2030, according to the Broadband Commission; create national broadband plans; and ensure that all sectors and stakeholders work together to establish digital connectivity as the future enabler of healthcare, finance, education and other sectors.

Summing up the session, moderator Johnson highlighted the difficulties in providing affordable connectivity to rural areas with poor return on investment, the role of new spectrum and regulatory approaches, and the importance of collaboration between public and private stakeholders, affirming that “Only when we all bring our own specific competencies to the table, avoid duplication of effort and pool our resources will we succeed in accelerating digital transformation for everyone, everywhere.”

 

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