I. Reform and Access
- In access, the World Bank, IFC, and MIGA ought to:
(iii) Support catalytic public- private partnership investments to accelerate the rollout of regional and national backbone infrastructure.
(iv) Identify and support effective approaches to promote access to the underserved, building on their experience with targeted interventions in other areas.abc
- Regional communications infrastructure and backbone projects have been highly complex and have suffered delays. As the World Bank continues to extend this type of project, it should continue to draw lessons from the implementation of these programs and incorporate these lessons into the design of any future operations.
- Targeted efforts to increase access beyond what was commercially viable have largely been unsuccessful.
- Gaps in broadband and Internet access, in the context of overall expansion of coverage, argue for a selective role in supporting private investments in difficult environments. Expanding access beyond what market players would provide on a commercial basis (for example, by using public-private partnership approaches) should remain an important priority.
- Because many countries are faced with unused amounts in their universal service funds, the effectiveness of World Bank support has been quite limited. Amid the major setbacks of these operations, the Bank-supported programs in Chile, Mongolia, Pakistan, and Uganda and the use of public private partnerships provide encouraging examples that these mechanisms could work.
- Based on the experience with universal service policies, future Bank support in this area needs to be reexamined. As mobile service is becoming ubiquitous and demand for Internet access is increasing, several countries are adopting broadband subsidy programs. Given the record so far, the Bank needs to examine its experience before engaging in these programs and incorporate the lessons of experience with universal access funds.
Original Response: MIGA will continue to provide political risk mitigation services to telecommunications operators for a wide range of investments, including fixed and wireless access and backbone infrastructure.
MIGA Action A: Provide MIGA guarantees for cross-border investments to telecommunications operators, for a wide range of investments including fixed and wireless access and backbone infrastructure.
Indicator: Number of countries benefiting from MIGA guarantees for investments in the telecommunications sector
Baseline:13 (between FY07 and FY11)
Indicator: 22 (between FY12 and FY16)
Timeline: FY16
Status FY12: 12
IEG takes note that MIGA continued its support for ICT sector projects but has not supported any additional projects by FY16. Therefore the rating remains as moderate as last year.
During FY16, MIGA continued its support for ICT sector projects with ongoing due diligence of several projects. In particular, MIGA worked on the KDDI Summit Global project in Myanmar and disclosed the Summary of Proposed Guarantee (SPG) in March 2016. The project aims to operate, upgrade, and expand telecom network and service offerings in Myanmar.
There has been marginal activity in the ICT sector in FY15, with additional coverage for an existing MIGA guarantee. Therefore, IEG's assessment for FY14 remains unchanged.
- MIGA has continued to support public- private partnerships that have the potential to accelerate the rollout of regional and national backbone infrastructure, beyond the evaluation period of the ICT Report (FY03-10). These projects also serve as important illustrations of MIGA's approach for promoting access to the underserved at the bottom of the pyramid. In FY11, MIGA supported the PT Natrindo Telepon Seluler (NTS) project in Indonesia, a national GSM and 3G cellular service provider of wireless communication services. NTS is focusing its growth on lower-income segments of the market, so the beneficiaries of these services will be lower income households and remote islands. The widespread availability of telecommunications networks also provides a platform for the private sector and the government to deliver important services to underserved communities throughout Indonesia.
- In FY12, MIGA continued its support for the MTN project in Afghanistan (original guarantee provided in FY07). The project has contributed to the development of the telecommunications sector in Afghanistan by providing mobile telecom services, including the installation, operation, and maintenance of a GSM network, wireless communication and internet services. The network currently covers 21 provinces and the new investment is supporting coverage into additional provinces.
- In FY14, MIGA supported the Regional Telecom project in Iraq, a high speed mobile broadband data and internet service provider. The project is expected to expand Iraq's ICT sector by providing high-speed mobile data and voice services to the main cities in the Kurdistan region. Iraq's mobile market is one of the least developed in the Middle East, with a sole regional operator providing mobile broadband services using 3G technology and fewer than 750,000 subscribers out of a population of nearly 33 million with access to any sort of 3G mobile service. The investment is expected to have demonstration effects in terms of other investments in the sector and opening up internet access in many areas where no fixed line access exists.
- In FY14, MIGA also supported the HT DRC Infraco (HTD) project in the Democratic Republic of Congo for the construction, expansion and operation of a telecom tower network. HTD is the only independent telecom tower company operating in DRC and provides passive infrastructure (space on towers, ground space, power, site maintenance and security) to telecom operators and internet services providers. In a country with a mobile penetration rate of less than 30 percent, the proposed project is expected to achieve wide-ranging developmental benefits by facilitating an expanded and improved telephony infrastructure. Since commencing operations in 2011, HTD has signed tower lease agreements with all five mobile operators in the DRC. With the construction of additional tower sites, existing and potential mobile operators and internet service providers will be able to expand the reach of their services both in terms of geography and capacity.
- In FY15, MIGA provided additional support to HTD in the Democratic Republic of Congo for the expansion of its telecom tower network. The expansion involves the acquisition of up to an additional 971 towers from a telecom operator for the purpose of expanding HTD's tower network in the DRC.
It is difficult to discern a trend in MIGA support to telecommunications projects in the period following the IEG ICT evaluation (2011), compared with the period preceding it. While in FY11 (baseline) there were 13 projects (in 13 countries) active in MIGAâs portfolio, this number has declined to 11 in FY14. However, MIGA has supported three new projects (3 countries), and has provided additional coverage for an existing project since FY12 for an exposure of $192 million as described by management in their response to MAR#191 and 192, including support to internet broadband infrastructure as per IEG's recommendation. Furthermore, the location of these investments shows an increased focus on high risk, fragile or conflict affected environments. Recognizing the increased difficulty of supporting investment in these difficult environments and MIGA's progress in targeting projects in telecommunication, based on MIGAâs objective (of supporting 22 countries by FY16), IEG rates implementation as âmediumâ.
MIGA has continued to support public- private partnerships that have the potential to accelerate the rollout of regional and national backbone infrastructure, beyond the evaluation period of the ICT Report (FY03-10). These projects also serve as important illustrations of MIGAâs approach for promoting access to the underserved at the bottom of the pyramid. In FY11, MIGA supported the PT Natrindo Telepon Seluler (NTS) project in Indonesia, a national GSM and 3G cellular service provider of wireless communication services. NTS is focusing its growth on lower-income segments of the market, so the beneficiaries of these services will be lower income households and remote islands. The widespread availability of telecommunications networks also provides a platform for the private sector and the government to deliver important services to underserved communities throughout Indonesia.
In FY12, MIGA continued its support for the MTN project in Afghanistan (original guarantee provided in FY07). The project has contributed to the development of the telecommunications sector in Afghanistan by providing mobile telecom services, including the installation, operation, and maintenance of a GSM network, wireless communication and internet services. The network currently covers 21 provinces and the new investment is supporting coverage into additional provinces.
In FY14, MIGA supported the Regional Telecom project in Iraq, a high speed mobile broadband data and internet service provider. The project is expected to expand Iraqâs ICT sector by providing high-speed mobile data and voice services to the main cities in the Kurdistan region. Iraqâs mobile market is one of the least developed in the Middle East, with a sole regional operator providing mobile broadband services using 3G technology and fewer than 750,000 subscribers out of a population of nearly 33 million with access to any sort of 3G mobile service. The investment is expected to have demonstration effects in terms of other investments in the sector and opening up internet access in many areas where no fixed line access exists.
In FY14, MIGA also supported the HT DRC Infraco (HTD) project in the Democratic Republic of Congo for the construction, expansion and operation of a telecom tower network. HTD is the only independent telecom tower company operating in DRC and provides passive infrastructure (space on towers, ground space, power, site maintenance and security) to telecom operators and internet services providers. In a country with a mobile penetration rate of less than 30 percent, the proposed project is expected to achieve wide-ranging developmental benefits by facilitating an expanded and improved telephony infrastructure. Since commencing operations in 2011, HTD has signed tower lease agreements with all five mobile operators in the DRC. With the construction of additional tower sites, existing and potential mobile operators and internet service providers will be able to expand the reach of their services both in terms of geography and capacity.
(IEG Rating 2013: Medium)
(Response from 2013. First MAR follow-up will be in 2014)
Since FY12, MIGA has issued two guarantees in the telecommunications sector. One was for the expansion of an existing telecom operator previously supported by a MIGA guarantee in Afghanistan, a low-income, high-risk FCS country. The earlier MIGA project was evaluated as being successful in increasing access and connectivity. The other supported an internet broadband project.
While MIGA has made progress towards increasing the number of countries benefiting from MIGA guarantees in the telecom sector, it has yet to reach its target (22 countries, between FY12 and FY16 compared to 12 in FY12).
(Management Rating 2013: High)
(Response from 2013. First MAR follow-up will be in 2014)
MIGA is supporting ICT investments in post-conflict areas where many underserved are located. Since the last evaluation, MIGA provided additional coverage to MTN, a South Africa based telecom operator, for its on-going expansion in Afghanistan. MIGA's support for MTN in Afghanistan, and its complementarity with the work of the World Bank and IFC in the ICT sector in the country, has received a positive IEG evaluation (see below). Furthermore, MIGA is underwriting a project in the Kurdistan area of Iraq that involves the roll-out of 4G/LTE network. In addition, MIGA provided coverage to 4G Africa AG for the establishment of a wireless network to deliver affordable Internet broadband services in three major cities in Cameroon (Douala, Yaoundé, and Edéa)
Evaluation of the World Bank Group Program
Chapter 5: Supporting Growth of the Formal Private Sector
âThe Bank Groupâs work on the private sector in Afghanistan provides a window on the complementarity of World Bank, IFC, and MIGA activities. In the ICT sector, the World Bank played a significant and influential role in assisting the government to restructure and liberalize the sector. Through grant operations and non-lending technical assistance, the World Bank helped in the establishment of the institutional framework that would attract private investment. An IFC investment and MIGA guarantees supported the entry and expansion of a third cellular operator to increase competition and expand coverage from 50 percent to 80 percent of the population. The MIGA- and IFC-supported company is now among the three largest in the country in market share and subscribers.â
Source:
Afghanistan Country Program Evaluation, 2002-11: Evaluation of the World Bank Group Program
(Box 5.2: Synergies Among World Bank Group Institutions)