broadband strategies handbook.pdf - Khazar University

ollout through regulatory measures rather than more direct forms of interventionsuch as investment.In the context of a private sector–led approach to broadband development,it is recognized that allowing competition to flourish will usually leadto greater deployment and efficiencies in network build-out. Competition inbroadband supply is crucial for reducing prices, improving quality of service,and improving customer service (ITU 2003). It has a positive effect onmarket growth, as it expands access, increases affordability, and augmentsthe value proposition. Conversely, lack of access to infrastructure and highprices can act as strong barriers to broadband diffusion. If no broadbandinfrastructure is available, consumers cannot access the service. Even if anetwork is available, it will be of little use for consumers if the service is notaffordable. The government, therefore, should place a priority on developingenabling policies that will facilitate competition throughout the supplychain to encourage deployment and lower consumer prices.However, in certain instances, competition and market forces will not besufficient for broadband to develop. In those cases—due to factors such asgeography or low population density, for example—private sector playerswill be unwilling to invest capital where they perceive that they will get alow (or no) return on their investment. For these areas, it will be necessaryfor the government to intervene more directly to ensure that un- and underservedareas and populations are able to get access to broadband networksand services.Use Competition to Promote Market GrowthA key lesson from countries surveyed in Kim, Kelly, and Raja (2010) is thatcompetition is critical to successful broadband market promotion. Eachcountry studied used different mechanisms to spur competition and promotebroadband market growth. Some focused primarily on fostering facilities-basedcompetition, while others focused more generally on increasingthe level of competition at the service level. The presence of established,competitive telecommunications operators in many countries also contributedto broadband market development.In the long term, liberalization and promotion of competition amongfacilities are the best ways to guarantee lower costs. For example, the initiationof the Southern and East Africa Cable System (SEACOM) network thatlinks Kenya, Madagascar, Mozambique, South Africa, and Tanzania resultedin Kenya Data Networks (KDN), a Kenyan data services provider, announcingthat it would reduce its Internet prices by up to 90 percent. 5 However,liberalization may be difficult in some developing countries, particularlythose that have small populations, are geographically isolated, or are small54 Broadband Strategies Handbook