Broadband Networks in the Middle East and North Africa Gelvanovska, Rogy, and Rossotto the WORLD BANK
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Broadband Networks in the MiddleBroadband East and North Africa DIRECTIONS IN DEVELOPMENT Communication and Information Technologies Gelvanovska, Rogy, and Rossotto and Rossotto Gelvanovska, Rogy, Broadband Networks in the Middle East and North Africa Accelerating High-Speed Internet Access Natalija Gelvanovska, Michel Rogy, and Carlo Maria Rossotto THE WORLD BANK Broadband Networks in the Middle East and North Africa DIRECTIONS IN DEVELOPMENT Communication and Information Technologies Broadband Networks in the Middle East and North Africa Accelerating High-Speed Internet Access Natalija Gelvanovska Michel Rogy Carlo Maria Rossotto © 2014 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW, Washington DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org Some rights reserved 1 2 3 4 16 15 14 13 This work is a product of the staff of The World Bank with external contributions. 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License: Creative Commons Attribution CC BY 3.0 Translations—If you create a translation of this work, please add the following disclaimer along with the attribution: This translation was not created by The World Bank and should not be considered an official World Bank translation. The World Bank shall not be liable for any content or error in this translation. All queries on rights and licenses should be addressed to the Office of the Publisher, The World Bank, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2625; e-mail: [email protected]. ISBN (paper): 978-1-4648-0112-9 ISBN (electronic): 978-1-4648-0113-6 DOI: 10.1596/978-1-4648-0112-9 Cover photo: Tarmak Media. London, UK. 2014. Cover design: Debra Naylor, Naylor Designs Broadband Networks in the Middle East and North Africa • http://dx.doi.org/10.1596/978-1-4648-0112-9 Contents Foreword xi Acknowledgments xiii About the Authors xv Abbreviations xvii Overview 1 Reference 15 Chapter 1 Introduction 17 Objective and Structure of the Study 17 Why Is Broadband Important for Economic and Social Development? 20 How Does MENA Compare in Terms of Broadband? 23 Notes 25 References 26 Chapter 2 National Broadband Policies and Market Development 31 The Need for Broadband Policies 31 Three Core Objectives of Broadband Policy and Three Stages of Market Development 35 Clustering Countries According to Their Level of Broadband Development 42 References 56 Chapter 3 Infrastructure Deployment and Developing Competition 59 Backbone Network Infrastructure 60 Access Network Infrastructure 61 International and Regional Infrastructure 62 National Backbone and Backhaul Infrastructure 74 Access Network Connectivity 80 Notes 97 References 98 Broadband Networks in the Middle East and North Africa • http://dx.doi.org/10.1596/978-1-4648-0112-9 v vi Contents Chapter 4 Recommendations to Accelerate the Development of Broadband Infrastructure 101 Promote Facilities-Based Competition 103 Introduce New Models of Infrastructure Supply 105 Implement Measures to Reduce Deployment Costs 111 Government Intervention to Stimulate Broadband in Underserved Areas 118 Notes 124 References 124 Chapter 5 Conclusion 127 Annex A Selected Country Case Studies 129 Morocco 129 Tunisia 140 The Arab Republic of Egypt 152 Jordan 159 Algeria 167 Libya 178 Notes 191 Boxes 2.1 Egypt’s National Broadband Plan 33 2.2 Broadband Policy: Objectives and Implementation of the Digital Agenda for Europe 34 2.3 Broadband Diffusion Curve 35 2.4 Affordability of Broadband for the Poorest 39 2.5 Ex-ante Sector-Specific Regulation in Telecommunications 41 3.1 Mobile Broadband Technologies 62 3.2 Leveraging Sovereign Wealth Funds to Expand Fiber-optic Networks: Gulf Bridge International 67 3.3 Open Access to International Submarine or Terrestrial Cables 70 3.4 Regulated Access to Submarine Cable Landing Stations in Tunisia 71 3.5 Joint Infrastructure Deployment Framework in Bahrain 79 3.6 National Infrastructure Deployment Project in Lebanon 80 3.7 Jordan’s National Broadband Network 81 3.8 Broadband Usage Patterns in the Youth Population 86 3.9 The Digital Dividend 88 3.10 Ladder of Investment and Regulated Wholesale Broadband Offers 92 4.1 Relaxing Regulations for Aerial Wiring to Stimulate Broadband Development 105 4.2 Mobile Network Operators Are Pioneers in the Optimization of Network Costs 106 4.3 Leapfrogging in Lithuania 112 Broadband Networks in the Middle East and North Africa • http://dx.doi.org/10.1596/978-1-4648-0112-9 Contents vii 4.4 Cutting the Rollout Costs of Broadband Infrastructure in the European Union 114 4.5 Cross-Sectoral Passive Infrastructure Sharing in Portugal 116 4.6 Approaches to Passive Infrastructure Mapping 118 4.7 Coverage Obligations in 4G/LTE Licenses in Germany and Sweden 121 4.8 Designing Public Subsidies for Rural Broadband: The Example of Chile 122 4.9 Satellite Rural Broadband in Canada 123 Figures 1.1 Broadband Consumer Needs and Technology Options 18 1.2 Percentage of Wikipedia Articles per Language 22 B2.3.1 The S-Curve 35 B2.3.2 Penetration of Wireline Broadband Services in Various Countries 36 2.1 Fixed and Mobile Broadband Prices 37 2.2 Mobile Broadband Penetration and Affordability, December 2012 38 2.3 Fixed Broadband Penetration and Affordability, December 2012 38 2.4 Importance of Policy Objectives Depends on the Stage of Broadband Market Development 40 2.5 Fixed Broadband Penetration and Access Prices, December 2012 43 2.6 Fixed-to-Mobile Substitution in an Emerging Market (Arab Republic of Egypt) and a Mature Market (Bahrain), December 2012 45 2.7 Fixed-to-Mobile Substitution in Jordan, December 2012 48 2.8 S-Curves of Fixed Broadband Market Development in Bahrain, the United Arab Emirates, and Qatar 49 2.9 Trends in Fixed Broadband Access Technologies in Bahrain and the United Arab Emirates, December 2012 50 2.10 Mobile Broadband Penetration and Access Prices, December 2012 52 2.11 Take-up of Mobile Broadband in the Arab Republic of Egypt, Morocco, and Libya, December 2012 53 3.1 Network Components of Broadband Infrastructure 60 B3.1.1 Mobile Broadband Technologies 62 3.2 Synergies from Utilities’ Investments: Roads and Water Distribution/Sanitation in Jordan 78 3.3 Global Consumer Internet Video Traffic 82 3.4 Complementary Fixed and Mobile Architectures 83 B3.8.1 Population Distribution in MENA 86 B3.8.2 User Age Distribution on Facebook in Egypt and Saudi Arabia 87 B3.8.3 Proportion of Mobile Phone Use, by Age and Activity 87 3.5 Distribution of Fixed Broadband Connections per Technology in Four MENA Subregions, December 2012 90 Broadband Networks in the Middle East and North Africa • http://dx.doi.org/10.1596/978-1-4648-0112-9 viii Contents 3.6 Distribution of Fixed Broadband Connections per Technology in MENA, December 2012 91 3.7 Fixed Broadband Market Shares of Incumbent Operators in MENA, December 2012 92 B3.10.1 Investment Ladder and Optimal Broadband Regulatory Model 93 3.8 Growth in Fixed Broadband Connections per Technology in MENA, December 2011–December 2012 94 4.1 Liberalization of the Telecommunications Sector in Bahrain 102 4.2 Supply-Side Policy Measures to Accelerate Broadband Deployment 103 B4.2.1 Overview of Mobile Network Cost Optimization Models 107 4.3 Overview of Possible New Models of Infrastructure Supply 108 4.4 Involvement of Real-Estate Companies in the Passive Infrastructure Layer 110 B4.3.1 Evolution of Breakdown of FTTx Deployment by Operator Type in Lithuania 113 4.5 Typical Stages of the Broadband Network Deployment Chain 113 B4.8.1 Mobile Broadband Subscriptions per Operator in Chile 122 A.1 Libyan Market Structure 178 Maps 1.1 Economies in the MENA Region 19 3.1 Submarine Cables and Cross-border Connections in North Africa 63 3.2 Submarine Cables and Cross-border Connections in the Middle East 64 3.3 Cross-border Connections in Maghreb Countries 66 B3.2.1 Fiber-optic cables 68 3.4 International Submarine Cable Connectivity in Morocco 73 A.1 International Submarine Cable Connectivity in Morocco