Connectivity Supporting Digital Transformation in CMLV

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Natasha Beschorner, Digital Development Global Practice, July 2020

Digital transformation

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Moving towards the implementation phase.

Enable every individual,

business and government to participate in

the digital economy

Digital Infrastructure is a Good Investment.

(World Bank, IMF, Deloitte, 2014)

Economic impacts of extending internet penetration by region

Affordable and reliable connectivity essential for digital platforms, in the public and private sector

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Enabling Environment Government Platforms Private Sector Platforms

Policies & Regulations

Systems & Infrastructure

Standards & Protocols

Skills & Capacity Building

Digital Identity

Digital Financial Management

Digital Taxation

Additional Applications

Digital Payments

Digital Commerce

Digital Marketplaces

Additional Applications

Digital adoption varies across Southeast Asian economies…CML are lagging, Vietnam needs to accelerate

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BruneiIndonesiaCambodiaLao PDRMyanmar MalaysiaPhilippines SingaporeThailandVietnam

-2

-1.5

-1

-.5

0

.5

1

1.5

2

Sta

ndard

devia

tion d

iffe

rence

Digital Adoption Index Business sub-index People sub-index Government sub-index

Source: World Bank 2018.

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Despite progress CMLV faces a continuing digital divide….

Source: Telegeography, 2020

▪ The global pandemic is boosting demand for e-commerce, online health and education

▪ Mobile broadband penetration is increasing but 4G needs to accelerate▪ The majority of users access the internet

through mobile devices. Mobile broadband is important for both households and businesses esp. SMEs

▪ 5G mobile transition is approaching▪ Fixed broadband is very low in Cambodia,

Lao PDR and Myanmar, higher in Vietnam▪ Fixed broadband access is essential for

data-intensive transactions and very important for business, government, schools and health care facilities.

Across ASEAN around 50% of people still lack fast, cheap, reliable quality internet services

0.0%

50.0%

100.0%

150.0%

Indonesia TimorLeste

Lao PDR Cambodia Myanmar Philippines Brunei Vietnam Thailand Singapore Malaysia

ASEAN Mobile penetration per technology % population (2019 Q3)

GSM 3G LTE

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

Indonesia TimorLeste

Lao PDR Cambodia Myanmar Philippines Brunei Vietnam Thailand Singapore Malaysia

ASEAN Fixed broadband penetration % population (2019 Q3)

Fixed Broadband Population Penetration Fixed Broadband HH Penetration

…impacting growth, competitiveness and service delivery prospects

IXPs by region-

IXP Potential Benefits

• Bandwidth & Cost Saving. Bandwidth saving is the initial goal for IXP creation, keeping internet traffic local for the connected ISPs

• Quality of Service (decreasing Latency). Using IXPs enables improved network performance and an enhanced QoS (quality of service) for customers, due to the bandwidth savings, decreased RTT and use of local links.

• New Revenue Opportunities. Through the IXP connection, an ISP can create new business models that drive the domestic links: e-banking, e-commerce, e-government, VPNs, content hosting and many other services that normally can be severely hampered by the high latency/high congestion on the upstream links.

WB Support for IXPs-examples

• Digital CASA-Afghanistan (approved 2018)

• US$6 million project component supporting IXPs to eventually facilitate regional IXP integration among the CASA countries to enable faster exchange of Internet traffic between the countries and, thereby, to the broader international networks.

• Currently government-owned. Almost major ISPs in the country are connected with it. Most traffic from social media. Transition to PPP model is under initial stage of discussion

• Somalia ICT Sector support phase 2

• Includes component for Somalia IXP at cable landing station

• Regional Communications Infrastructure Project (RCIP)-Africa

• Support for IXPs

• Mashreq Digital Transformation

• Ongoing global report on national data infrastructure, with a focus on IXPs, Content Delivery Networks and Colocation Data Centers-for World Development Report on Data, 2021

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WB engagement with Government of Indonesia to improve the availability of affordable, high-speed broadband Internet

Promote more efficiency in fixed broadband roll out through sharing of passive infrastructure (e.g. ducts, poles, rights of way) (which typically constitutes 70-80% of investment cost)

Provide additional spectrum for mobile broadband operators through better governance of spectrum allocation

Co

nn

ect

ivit

y

Pri

ori

ty

What are the issues? What needs to be done? What is the Government doing?

• Infrastructure sharing (passive and active) is not common yet in fixed broadband (but widely practiced in mobile broadband)

• It requires inter-agency coordination, especially with local Governments (not an exclusive Kominfo issue)

• Local governments should provide, facilitate, or incentivize companies to build shared passive infrastructure.

• Build database of available passive infrastructure for sharing

• In the recent Omnibus Bill for Job Creation, the Government introduces the concept of passive infrastructure sharing in the revision to the Telco Law ‘99

Fixed Broadband

Mobile Broadband

• 700 MHz band: reallocate from broadcasting to 4G-LTE

• 2.6 Ghz band: reallocate from satellite broadcasting to 4G/LTE

• Enable sharing of 3.4-3.8 Ghzbands between satellite and mobile services(including 5G prospectively)

• Prepare the spectrum in the mmWave band, 24-29 GHz, for 5G

• Spectrum scarcity is the main reason for the remaining access and quality challenges in mobile broadband

• Past practices of spectrum allocation is no longer suitable to support digital demand

• In the recent Omnibus Bill for Job Creation, the Government impose mandatory migration for broadcasting (applicable for the 700 MHz band)

• Yet no clear roadmap for the migration for all the bands (including the immediate 700 MHz band)

Engaging with the Philippines government to accelerate mobile network rollout

• Common Tower Policy (June 2020)

• Cell tower/site permit streamlining (in progress)

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World Bank Engagement: the “CHIP” Framework for East Asia & Pacific

Connect Harness Innovate Protect

Build digital foundations and enablers (digital ID, digital payments, data analytics, etc.) and ensure system compatibility.

Invest in analog complements: regulations, skills/literacy, and leadership and institutions

Create and expand new economy services, business models, digital entrepreneurs and e-government

Mitigate risks: cybersecurity and privacy, mis-information, inequality of opportunities, automation and digital monopoly

Leveraging technology for inclusive development:faster growth, more jobs and better service delivery

Thank you

nbeschorner@worldbank.org

https://www.worldbank.org/en/topic/digitaldevelopment

http://documents1.worldbank.org/curated/en/674601544534500678/pdf/Main-Report.pdf