broadband strategies handbook.pdf - Khazar University

e used between midnight and 5 a.m. Subscribers also get free technicalsetup support plus a mailbox with 5 GB of storage (Muller 2011). SouthAfrica is one of the few countries worldwide that still maintains monthlydata caps on fixed-line broadband, although such caps are more commonfor mobile broadband.The mobile phone subsidization business model is not without its detractors,and the practice is illegal in some countries. Concerns include whetherthe total cost of ownership is higher over time with subsidies and contractsversus scenarios involving unsubsidized phones and lower service prices,device locks that are used to prevent phones from being used with anotheroperator’s service, the limited variety of device models that operators arewilling to subsidize, and high fees that consumers may pay if they want toterminate their contract early. Policy makers considering some type of subsidyprogram will need to take such concerns into account as they analyzevarious subsidy approaches.Service CostsPrograms to provide affordable broadband devices to users are important,but only solve part of the problem. The longer-term issue for adoption ofbroadband services is the ongoing cost of receiving service. Some users maynot have the means to pay for broadband access on an ongoing basis, particularlyin countries where broadband service prices are still high. Moreinformation about support programs that could help users to get and keeptheir broadband service can be found in chapter 4, which addresses universalservice funds and obligations.In order to address the issue of service cost, in 2001 the Kenniswijk projectin the Netherlands proposed a two-part subsidy program for connectingusers. Notably, a year after the subsidies ended, 80 percent of subscriberswere still using the service.• Initial connection. A subsidy would be paid directly to the consumer andthe administration would be undertaken by a government agency. Thispart of the subsidy would be used to encourage people to get Internetconnections.• Ongoing support. Ongoing support would be administered by the companiesthat win the contract to build the broadband infrastructure. Theywould receive money from the government and would then distributethe full amount to individual consumers in the region in the form of alower connection tariff per household. It was thought that this wouldencourage people to adopt and keep broadband access. 23Driving Demand for Broadband Networks and Services 267