The World Bank Implementation Status & Results Report Pacific Regional Connectivity Program 2:FSM Connectivity Project (P130592) Pacific Regional Connectivity Program 2:FSM Connectivity Project (P130592) EAST ASIA AND PACIFIC | Micronesia, Federated States of | Digital Development Global Practice | IBRD/IDA | Investment Project Financing | FY 2015 | Seq No: 9 | ARCHIVED on 23-Dec-2019 | ISR38669 | Implementing Agencies: Federated States of Micronesia, Asian Dev Bank, Department of Transport, Communication and Infrastructure, Telecommunication Regulation Authority, Federated States of Micronesia Telecommunications Cable Corporation Key Dates Key Project Dates Bank Approval Date: 17-Dec-2014 Effectiveness Date: 11-Mar-2015 Planned Mid Term Review Date: 30-Nov-2019 Actual Mid-Term Review Date: 15-Sep-2019 Original Closing Date: 31-Jan-2020 Revised Closing Date: 30-Nov-2022 pdoTable Project Development Objectives Project Development Objective (from Project Appraisal Document) The development objective of the Project is to reduce the cost and increase the availability of ICT services needed to support social and economic development in the Recipient's territory. Has the Project Development Objective been changed since Board Approval of the Project Objective? No Components Table Name Component 1A Palau-Yap-Guam Cable System:(Cost $22.50 M) Component 1B Chuuk-Pohnpei Cable System:(Cost $18.50 M) Component 1C Kosrae Connectivity:(Cost $3.50 M) Component 2 Technical Assistance:(Cost $2.25 M) Component 3 Project Management:(Cost $0.75 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO Moderately Satisfactory Satisfactory Overall Implementation Progress (IP) Moderately Satisfactory Moderately Satisfactory Overall Risk Rating High High Implementation Status and Key Decisions The Project became effective as of March 11, 2015. The Open Access Entity (OAE), also known as the FSM Telecommunications Cable Corporation, has been established and is fully operational. The OAE is responsible for owning and operating the new cable system assets financed under the Project. The Yap cable successfully entered into service at the end of June 2018. The cable for Chuuk entered into service in April 2019. Additional Financing (P161363) of SDR12 million was approved by the Bank on 31 May, 2017, which included financing for FSM to participate in the East Micronesia Cable (EMC) system, which will connect Kiribati, Nauru and Kosrae to Pohnpei (and on to Guam). A Construction and 12/23/2019 Page 1 of 6 The World Bank Implementation Status & Results Report Pacific Regional Connectivity Program 2:FSM Connectivity Project (P130592) Maintenance Agreement and IRU Deed was signed by all three implementing entities in April, 2019. Bidding documents for the supply and installation of the cable system have been prepared and the Bank issued its no objection on December 16, 2019. The Telecommunications Regulatory Authority (TRA) was deemed to be established as the independent regulator of telecommunications for FSM with the enactment of the Telecommunications Act of 2014. The TRA has completed a number of key actions needed to give effect to the Telecommunications Law. Regulations and rules dealing with licensing, spectrum, numbering, wholesale access and interconnection have been through public consultation and administrative review processes. These rules were finalized and promulgated in October 2019. Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance -- Substantial Substantial Macroeconomic -- Low Low Sector Strategies and Policies -- High High Technical Design of Project or Program -- High High Institutional Capacity for Implementation and Sustainability -- High High Fiduciary -- High High Environment and Social -- Moderate Moderate Stakeholders -- High High Other -- -- -- Overall -- High High Results PDO Indicators by Objectives / Outcomes Increase the availability of information and communication technology services IN00747556 ►Access to telephone services (mobile phones per 100 people) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 30.00 19.00 19.00 80.00 Date 25-Sep-2014 30-May-2018 24-Sep-2019 30-Nov-2022 Increase the availability of information and communication technology services IN00747560 12/23/2019 Page 2 of 6 The World Bank Implementation Status & Results Report Pacific Regional Connectivity Program 2:FSM Connectivity Project (P130592) ►Access to Internet Services (number of subscribers per 100 people) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 2.00 2.80 5.00 40.00 Date 25-Sep-2014 30-May-2018 24-Sep-2019 30-Nov-2022 5% DSL subscriber penetration; mobile broadband data not yet available (hence, assumed at 0%) Comments: Reduce the cost of information and communication technology services IN00747561 ►Wholesale Internet bandwidth price (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 1,800.00 1,800.00 61.00 700.00 Date 25-Sep-2014 30-May-2018 24-Sep-2019 30-Nov-2022 Overall $61/Mbps/month (including satellite components) based on costs for OAE/Hantru cable/satellite divided by total estimated amount of traffic current at 4.605 Gbps. Note this outcome measurement is Comments: sensitive to changes to the estimated costs of Kosrae satellite capacity. Increase the availability of information and communication technology services IN00747562 ►Direct project beneficiaries (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 21,000.00 42,000.00 Date 25-Sep-2014 30-May-2018 24-Sep-2019 30-Nov-2022 Yap with approx. 7,000 inhabitants and Chuuk with 14,000 inhabitants on Weno. There are also several thousands inhabitants on Etten, Uman, Fefan and Tonawas who benefit from better 3G, but are not yet Comments: quantified so currently excluded from the project beneficiary count. IN00747563 Female beneficiaries (Percentage, Custom Supplement) Baseline Actual (Previous) Actual (Current) End Target Value 50.00 50.00 50.00 50.00 Increase the availability of information and communication technology services IN00747557 ►Internet bandwidth available (Mbps) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 38.00 3,500.00 200,150.00 20,150.00 Date 25-Sep-2014 30-May-2018 24-Sep-2019 30-Nov-2022 12/23/2019 Page 3 of 6 The World Bank Implementation Status & Results Report Pacific Regional Connectivity Program 2:FSM Connectivity Project (P130592) Measure of the transport capacity which has been lit up on the submarine cable plus an estimate for Kosrae satellite capacity comprised 100,000 Yap based on 1 wavelength 100,000 Chuuk based on 1 wavelength Comments: 150 Kosrae based on repurposed satellite capacity The amount of bandwidth during the previous reporting period will be corrected and restated—it comprised 50-70 Mbps on Yap, 165 Mbps on Chuuk and 75 Mbps on Kosrae—for a total of approximately 300 Mbps Impact on Telecom sector of World Bank Technical Assistance (composite score: 1-low impact to 5-high IN00747558 ►Impact on Telecom sector of World Bank Technical Assistance (composite score: 1- low impact to 5-high impact) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 2.00 2.00 4.00 5.00 Date 25-Sep-2014 30-May-2018 24-Sep-2019 30-Nov-2022 Reduce the cost of ICT services needed to support social and economic development IN00747559 ►Retail Price of Internet Services (per Mbit/s per Month, in US$) (Amount(USD), Custom) Baseline Actual (Previous) Actual (Current) End Target Value 65.00 129.00 39.00 20.00 Date 30-Sep-2014 30-May-2018 24-Sep-2019 30-Nov-2022 Tariff for 1 Mbps residential “naked ADSL” price is $39 ADSL; PSTN line charge is $12 and for PSTN subscribers 1 Mbps DSL is available for $33. 1Mbps service is only available at this price level in Yap Chuuk and Pohnpei which are all now connected by submarine fiber optic cable system. In Kosrae the 1Mbps the ADSL service costs $129 (plus PSTN line charge) or 256Kbps service for $33 Comments: (plus telephone line charge). The impact of Kosrae costs on national retail prices has not been included due to the small number of subscribers in Kosrae and difficulties comparing difference service levels. Note the previous value measured the business DSL tariff due to no tariff availability for consumer 1 Mbps at that point in time. Intermediate Results Indicators by Components Component 1 International Connectivity Infrastructure IN00747564 ►Length of fiber optic cable access (km) (Kilometers, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 1,950.00 1,950.00 1,950.00 Date 25-Sep-2014 30-May-2018 30-May-2018 30-Nov-2022 IN00747566 ►EMC establishment (Yes/No, Custom) 12/23/2019 Page 4 of 6 The World Bank Implementation Status & Results Report Pacific Regional Connectivity Program 2:FSM Connectivity Project (P130592) Baseline Actual (Previous) Actual (Current) End Target Value No -- Yes Yes Date 20-Mar-2017 -- 24-Sep-2019 30-Aug-2019 The C&MA has been signed by the parties establishing the EMC consortium. Comments: Component 2 Technical Assistance IN00747565 ►Regulatory capacity strengthened (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No No Yes Yes Date 25-Sep-2014 30-May-2018 24-Sep-2019 30-Nov-2022 Overall Comments IR Regulatory capacity has been strengthened. With the support of TA under component 2 of the Project, the TRA has been established and made operational. During 2019 the TRA completed a number of key outstanding actions needed to give effect to the Telecommunications Law. Regulations and rules dealing with licensing, spectrum, numbering, wholesale access and interconnection have been prepared and successfully completed the public consultation and administrative review processes. These rules were finalized and promulgated in October 2019. The TRA is also procuring a Medium-Term Adviser to assist the TRA with priority regulatory actions and the consultancy arrangement is expected to be in place by late December 2019 or early January 2019. Work to establish the Appeals Panel is complete and Panel members have been appointed. FSMTC has been issued its new licenses under the Telecommunications Law of 2014 and has paid its annual spectrum licensing fees. The TRA expects FSMTC to pay its operator licensing fees in the short term. Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P130592 IDA-D0040 Effective USD 47.50 47.50 0.00 39.59 5.19 88% P130592 IDA-D1880 Effective USD 16.20 16.20 0.00 0.00 16.70 0% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P130592 IDA-D0040 Effective 17-Dec-2014 06-Mar-2015 11-Mar-2015 31-Jan-2020 30-Nov-2022 P130592 IDA-D1880 Effective 31-May-2017 19-Sep-2017 20-Jun-2019 30-Nov-2022 30-Nov-2022 Cumulative Disbursements 12/23/2019 Page 5 of 6 The World Bank Implementation Status & Results Report Pacific Regional Connectivity Program 2:FSM Connectivity Project (P130592) Restructuring History Level 2 Approved on 13-Feb-2016 ,Level 2 Approved on 11-Jun-2019 Related Project(s) P161308-Add'l Financing FSM Connectivity Project ,P161363-P2: Palau-FSM Connectivity Project: AF Kosrae Connectivity 12/23/2019 Page 6 of 6