Nation building

Next generation national broadband networks (NGNBNs) offer huge benefits to countries that deploy them, but what role should governments play in their development?

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Nation building
By  Roger Field Published  August 17, 2009 Communications Middle East & Africa Logo

While numerous countries around the world are deploying next generation broadband networks at a national level, there remain many questions about the best way to deploy these networks, and how much involvement governments should have. Bahjat El Darwiche, principal at Booz & Co spoke to CommsMEA about the importance of next generation networks at the national level, and why he thinks governments should be at the forefront of their deployment.

What are Next Generation National Broadband Networks?
They are networks that will provide every customer with an ultra high speed connection and enable the customer to access much more powerful applications than the ones being accessed today. We are talking about national telecom networks with connections of around 50mbps and 100mbps and potentially 1 gig.

The idea behind these networks is that they will enable a whole set of new applications for home, enterprise, governance. They will have a significant impact on society, on the way we live as well as on the economy. All types of industry will be able to benefit.

Another advantage is for governments, with the concept of e-citizens, where all government applications would be able to be dealt with online. When you have very fast networks and you can download pictures, scan documents and so on in a fraction of a second, then it becomes efficient, especially for mass applications where millions or hundreds of thousands of people are using those applications.

The same thing applies for the home and office in terms of automation, e-learning, IPTV, high definition video conferencing. Enterprises will benefit by not needing to buy any costly software and hardware that has to be hosted at their premises.

Operators will also benefit because these are all new growth revenues.

Should governments be formulating plans for NGNBNs now?
These applications are happening already in some markets and demand is starting to mature around them. So building these NGNBNs is becoming a necessity because it will definitely accelerate the uptake of these applications and will allow society and the economy to benefit.

Governments are going to reap significant benefits because the impact of this is not just on the telecoms sector but all the other economic sectors and it is about the performance of the broader economy and competitiveness.

For this reason, we think governments should position these networks as national assets rather than "just another telecoms network" that an operator is developing.

How much involvement should governments have?
There is no one-size-fits-all model that works for all countries because every market has its own conditions. There is a need for government intervention in this because the investment needed for building these networks has a magnitude beyond anything that has happened in the past. Second, demand is still maturing and there is still work to do in terms of stimulating demand and defining the business models for monetising this demand.

Thirdly, the regulatory environments are still too immature to cater for this type of network and applications. Today many regulatory frameworks are still tailored for a world where you have operators selling voice minutes. Governments need to intervene in a capacity of policy maker, regulator or potentially even investor.

When and how should governments intervene?
The main drivers for government intervention is to drive broad availability and deployment of these networks and secondly to make sure they are offered at affordable prices because if they are affordable, then the applications that sit on top of them will become affordable and the whole ecosystem will start working.

In order to achieve this there are several models of intervention. One is for governments - in cases where it is not expected that operators will ensure nationwide coverage - to consider providing some investment in order to support national broadband networks.

In other cases, it is expected operators will deploy NGNs nationwide, but in a very costly manner because of possible duplications in investment or because the market is not very efficient. In this case our advice is that governments should  introduce new business models in the market, either by licencing new types of operators or by introducing regulations that push towards more infrastructure sharing and more consolidation. Then you reduce the cost of deploying these networks and you accelerate the migration towards more affordable services.

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