Telecom for all: not an elusive dream!

In a country where one in four people barely subsists, provision of information and communication technology (ICT) services to everybody - including millions below the poverty line - would sound ridiculous. It is pleasantly true that there is indeed an organisation which is doing just that. Its the Universal Service Fund (USF).
USF was established by the government in 2006, as a public-private-partnership, with the goal of bridging the digital divide in Pakistan.
In 2007, USF commenced operations through a Rural Telecom Project which will ultimately provide access to basic telephony and data services to some 12,000 un-served mauzas (villages), clubbed together into 26 lots across Pakistan.
Its second initiative is the USF Broadband Programme which envisages improved broadband penetration in un-served areas. The third program aims to extend 8,313 kilometers of optic fiber cable (OFC) networks across over 100 un-served tehsils and towns.
USF has achieved some significant milestones in four years. 3,500 mauzas now have basic telecom services, 460 public call offices and 46 tele-centers. 238 cities and towns now have 268,000 broadband connections. Over 790 educational broadband centers and 227 community broadband centers have been established.
In 36 tehsils and towns, 2,822 kilometers of OFC has been laid. Just last week, USF awarded Wateen a contract worth Rs2.4 billion for the laying of over 1,100 kilometers of an OFC network in northern Baluchistan.
"USF identifies the area based on feasibility studies and prefers moving into an area with larger population. Following PPRA rules, contracts are advertised to licensed operators and bid against. Once contract is awarded, USF teams conduct regular technical audits of the contractors", USF chief executive Parvez Iftikhar told BR Research.
Telecom operators contribute 1.5 percent of their adjusted revenues to the fund, in addition to some of the proceeds from Access Promotion Component (APC). With no financial support from government, USF account has received roughly Rs40 billion in contributions since the funds inception.
"USF has contracted over Rs25 billion of projects so far, committed a subsidy of Rs17 billion, and disbursed Rs7.5 billion thus far" revealed Iftikhar.
He explained that deteriorating law and order situation and the recent deluge delayed disbursals.
PTCLs footprint over USF-sponsored contracts is roughly 45 percent, primarily because it holds all three telecom licenses. However, less than 20 percent of the contracts are with the mobile network operators (MNOs). Are the MNOs shying away or is this lackluster participation due to 75 percent of the contracts being outside the direct domain of MNOs?
Parvez Iftikhar attributed MNOs reluctance to security issues in remote areas, higher operating expenditures, and the backlog factor (carrying voice services from un-served areas to the main grid). He lamented that modest participation from MNOs, has restricted USF to only 10 lots out of a total of 26 un-served lots across Pakistan.
USF has now decided to subsidise part of each MNOs operating expenditures for three years if it is awarded a contract. Contracts for five more lots have been advertised and it is hoped that the MNOs response would be better this time around.
Anchors of this public-private-partner-ship have, so far, kept political whirlwinds at bay, although rumors abound that the USF policy could be amended to curtail the funds autonomy and excess money in USF account could be transferred to the federal consolidated fund.
Highlighting the funds achievements and creation of awareness are essential for the fund to execute its mandate unfettered and preserve its independence.
Going forward, the USF management must utilise burgeoning contributions in a timely manner. They need to come up with diverse and balanced programs so that any particular industry segment does not get entirely disenchanted with the funds existence. Additionally, more projects should be identified in those telecom segments which have larger contributions to the fund.

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Performance of USF programs*

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                    Rural                       Optical

                 Telecom       Broadband    Fiber Cable

                Programme      Programme        Program

                              Operations

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                                               (Tehsils

                 (Mauzas)    (Connections)     & towns)

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Contracted          6,118        434,750             80

Completed           3,500        268,000             36

Audited             3,414         23,421             21

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                             Subsidy (Rs bn)

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Contracted           4.21           6.35            6.4

Disbursed             2.8            2.1            2.5

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                             Achievements

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                   Public    Educational /      Optical

                    Call       Community    Fibre Cable

                 Offices/     Broadband     length (Km)

              Tele centers      Center

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Contracted       844/60        1173/345           5,324

Completed        460/46         790/227           2,822

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