Documentof The WorldBank FOR OFFICIAL USEONLY Report No: 31395 LAC - PROJECTAPPRAISAL DOCUMENT ON PROPOSED CREDIT OF SDR400,OOO (US$541,600 EQUIVALENT) TO THE COMMONWEALTHOF DOMINICA CREDIT OF SDR200,000 (US$270,800 EQUIVALENT) AND LOANOF US$272,161TO GRENADA LOANOF US$544,322 TO ST. KITTS &NEVIS CREDIT OF SDR 200,000 (US$270,800 EQUIVALENT) AND LOANOF US$272,161TO ST. LUCIA, AND CREDIT OF SDR200,000 (US$270,800EQUIVALENT) AND LOANUS$272,161 TO ST. VINCENT & THE GRENADINES FORA TELECOMMUNICATIONS AND ICT DEVELOPMENT PROJECT April 18,2005 Finance, Private Sector, and Infrastructure Unit Caribbean Department LatinAmerica andthe Caribbean Regional Office a restricted distribution and may be used by recipients only in the performance o f their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS (Exchange Rate EffectiveMarch 31,2005) Currency Unit = EasternCaribbeanDollar (EC$) EC$(XCD)2.67 = US$1 US$O.37 = EC$(XCD) 1 SDR0.663117 = US$1 US$1.50803 = SDR 1 FISCAL YEAR January 1 - December31 ABBREVIATIONS AND ACRONYMS ADR Alternative DisputeResolution OECS Organization o f Eastern Caribbean C&W Cable and Wireless States CAS Country Assistance Strategy OBA Output-Based Aid CIDA Canadian InternationalDevelopment PCP Price Cap Plan Agency PDO Project Development Objective ECTEL Eastern CaribbeanTelecommunications RSMS Radio Spectrum Monitoring System Authority SBD Standard Bidding Document IDA International Development Association TAL Technical Assistance Loan IBRD International Bank for Reconstruction and Development UNICT UnitedNations Informationand Communication Technologies Task - ICB International Competitive Bidding Force ICT Information and Communication USF Universal Service Fund Technologies USG Universal Service Guidelines IFC InternationalFinance Corporation USAID UnitedStatesAgency for International ISP Internet Service Provider Development NTRC NationalTelecommunications Regulatory Commission Vice President: PamelaCox Country Managermirector: Caroline Anstey I Sector Manager: Pierre Guislain Task Team Leader: Robert Schware FOROFFICIAL USEONLY OECS COUNTRIES Telecommunications and ICT DevelopmentProject TABLE OF CONTENTS Page A . STRATEGIC CONTEXTAND RATIONALE .......................................................................... i 1 Country and sector issues................................................................................................................. 1 2 Rationale for Bank's involvement..................................................................................................... 3 3... Higher level objectives to which the project contributes ................................................................. 4 B. .PROJECT DESCRIPTION ..................................................................................................... 5 2. 1 Lendinginstrument .......................................................................................................................... 5 3. Project development objective and key indicators ........................................................................... 5 4. Lessons learned and reflectedinthe project design ......................................................................... Project components .......................................................................................................................... 5 8 5. Alternatives considered and reasonsfor rejection............................................................................ 9 C. IMPLEMENTATION............................................................................................................. I O 1. Partnership arrangements............................................................................................................... 10 2. Institutional and implementationarrangements ............................................................................. 10 3. Monitoring and evaluation o f outcomes and results ...................................................................... 10 4. -10 5. Sustainability................................................................................................................................. Critical risks andpossible controversialaspects 11 6. ............................................................................ Loadcredit conditions and covenants............................................................................................ 12 D. 1.APPRAISALand financial analyses ................................................................................................... 13 SUMMARY ....................................................................................................... 13 Economic 2 Technical........................................................................................................................................ 14 3 Fiduciary ........................................................................................................................................ 15 4... Environment.,................................................................................................................................. 16 Social.............................................................................................................................................. 16 5. 6. 7. Policy Exceptions and Readiness................................................................................................... Safeguard policies .......................................................................................................................... 17 17 Annex I: Country and Sector or Program Background ............................................................... 18 Annex 2: Major Related Projects Financed by the Bank and/or other Agencies ......................... 26 Annex 3: Results Framework and Monitoring., ............................................................................ 28 Annex 4: DetailedProject Description ......................................................................................... 33 Annex 5: Project Costs.................................................................................................................. 38 Annex 6:Implementation Arrangements ...................................................................................... 39 Annex 7: Financial Management and Disbursement Arrangements ............................................ 41 Annex 8: Procurement Arrangements .......................................................................................... 45 Annex 9: Economic and FinancialAnalysis ................................................................................. 56 Annex 10: Safeguard Policy Issues............................................................................................... 58 Annex II:Project Preparation and Supervision .......................................................................... 59 Annex 12: Documents in the Project File..................................................................................... 61 Annex 13: Statements of Loans and Credits ................................................................................. 62 Annex 14: Countries at a Glance.................................................................................................. 67 Map IBRD 33564 This document has a restricted distribution and may be used by recipients only in the performance of their official duties I t s contents may not be otherwise disclosed without World Bank authorization . . CommonwealthofDominica,Grenada, St. Kitts& Nevis, St. Lucia,and St. Vincent & the Grenadines TelecommunicationsandICT DevelopmentProject PROJECTAPPRAISAL DOCUMENT LatinAmerica andthe CaribbeanCountryDepartment CITPO Date: April 18, 2005 Team Leader: Robert Schware Country Director: Caroline Anstey Sectors: Information & Communications Sector ManagerDirector: Pierre Guislain Themes: Technology Diffusion, Private Sector Project ID: PO88448 Development Lending instrument: Technical Assistance Environmental screening category: C Loan (TAL) Safeguard screening category: n/a Project Financing Data: [XILoan [XI Credit [ ] Grant [ ] Guarantee [ ] Other: For Loans: Amount (US$): 1.36 million Proposed terms: Single currency (US$) VSL - Grace period: 3 years - Years to maturity: 15 - Commitment fee: 0.25% on un-dis,ursed balance For Credits:Amount (US$): 1.35 million (SDR 1,000,000 equivalent) Proposed terms: Standard IDA - Graceperiod: 10 years - Years to maturity: 35 - Commitment fee: 0.40% - Service charge: 0.75% o f disbursed and outstanding balance FinancingPlan(US$m.) Source Local Foreign Total Borrower: 0.68 Dominica 0.14 Grenada 0.13 St. Kitts & Nevis 0.14 St. Lucia 0.13 St. Vincent & the Grenadines 0.14 IDA: (SDR 1,000,000) 1.35 Dominica (SDR 400,000) 0.54 Grenada (SDR 200,000) 0.27 St. Kitts & Nevis (SDR -) - St. Lucia (SDR 200,000) 0.27 St. Vincent & the Grenadines (SDR 200,000) 0.27 IBRD: 1.36 Dominica - Grenada 0.27 St. Kitts & Nevis 0.55 St. Lucia 0.27 St. Vincent & the Grenadines 0.27 Total 0.68 2.71 3.39 Borrower: Governments o f Dominica, Grenada, St. Kitts & Nevis, St. Lucia, St. Vincent & the Grenadines Expected effectiveness date: July 31,2005 Expected closing date: December 31,2009 Does the project depart from the CAS incontent or other significant o Y e s .No respects? Does the project require any exceptions from Bankpolicies? oYes @ N o I Have these been approvedby Bankmanagement? oYes o N o I s approval for any policy exception sought from the Board? Io ~ e s@NO Does the project include any critical risks rated "substantial" or "high"? o Yes 0 N o Does the project meet the Regional criteria for readiness for @Yes o N o implementation? Project development objective Improve the access, quality and use o f telecommunications and ICT services to achieve socio- economic development inthe OECS. Project description 1. Legal and Regulatory Reforms: strengthen the national andregionalregulatory frameworks andpromote additionalcompetition inthe telecommunications sector. 2. Universal ServiceFund: review current universal access policy, create related guidelines and provide financial support to establish a Universal Service Fund. 3, Information and Communications Technologies (ICT): improve growth and competitiveness inICT-enabledservices throughutilizationofbroadbandinfrastructure. 4. Project Management: provide support to project management and administration as well as fimding for project audits. I Which safeguard policies are triggered, ifany? Not applicable. Significant, non-standard conditions, if any, for: Boardpresentation: None. Loadcredit effectiveness: 0 ECTEL is filly staffedto carry out the project management hctions, including hiring a project manager, as agreed with the Bank; 0 Finalize the customization o f the financial management software through the development o f a chart of account and the reporting format for boththe project and ECTEL; and 0 A SubsidiaryFinancing Agreement acceptable to the Bankhas beenexecuted onbehalf o fthe member countries and ECTEL. Covenants applicable to project implementation: For sub-component 2.3 "Support for Universal Service Fund",preparation o fUniversal Service Guidelinesacceptable to the Bankis a prerequisite to any disbursement under this sub-component. A. STRATEGICCONTEXTAND RATIONALE 1. Country andsector issues The economies of the OECS are facing a dual challenge o f slowing economic growth and persistently high unemployment and poverty rates. Regional economic dynamism has been inhibited by reduced preferential market access for traditional crop exports, stiffer competition from other tourism destinations, fiscal imbalances and highpublic sector debt levels. The region urgentlyneeds to carve out new areas of competitive advantage inthe global economy to create a more stable andless vulnerable platform for economic development andpoverty reduction. As indicated in a recent Bank report on growth and'competitiveness issues in the OECS, improving access and quality andreducing costs o ftelecommunication services will be critical to stimulate growth and improve competitiveness not only in I C T activities but also in emerging clusters o f other services (e.g., niche tourism, offshore education, and offshore financial services).' Inits development strategy, the OECS recognizes inits development strategy that information and communication technologies (ICT) offer significant opportunities to achieve greater economic growth and diversification and contribute to poverty reduction. In 1998, five country memberso fthe OECS--Dominica, Grenada, St. Kitts & Nevis, St. Lucia, and St. Vincent andthe Grenadines--embarked on a liberalization process that passed new telecommunications acts, terminated monopoly rights, and established a common regulatory framework for the telecommunications sector. They created the Eastern Caribbean Telecommunications Authority (ECTEL) -the first regional telecommunications regulatory authority inthe world--to facilitate the harmonization of the regulatory regime. ECTEL has spent five years establishing itself, harmonizing legislation in five countries, and supporting and guiding NTRCs in the ongoing reform process. Talks with the remaining four OECS countries--Anguilla, Antigua, British Virgin Islands andMontserrat--tojoin ECTELare continuing. Under ECTEL's guidance and review, reform o f the sector was initiated. The NTRCs have issued fixed and mobile licenses to 12 new telecommunications service providers other than the incumbent and licenses for submarine cable operators are currently under review (see Table 1). Since M a y 2002, seven mobile operators have been issued licenses leading to growth and competition in the mobile market. Another major achievement o f ECTEL was the Price Caps Implementation Agreement signed between October and December 2004 with the incumbent, Cable and Wireless (C&W), which provide concessions o f an estimated US$7.5 million over the first two years o fthe Price Caps Plan("PCP''). These reforms were facilitated through the OECS Telecommunications ReformProject, financed by the World Bank. 'OECS: Towardsa NewAgenda for Growth, WorldBank, 2005. 1 ECTELActivity Fixed Mobile Internet/retworks Companies' offeredissued individual licenses 8 7 8 Numbero findividual licenses issuedoffered 12 16 12 Number of individual licenses inoperation 6 9 8 I Table 2: Status of IndividualLicensing-December2003 I Dominica Country IILicensesIssued C&W, Marpin,SAT Telecom, AT&T, Orange Caraibes I Grenada C&W, GNP TWTC, Digicel, AT&T, St. Kitts/Nevis C&W, The Cable ,Carib Globe St. Lucia C&W, Digicel, ATT St. Vincent C&W, Digicel, ATT Source: OECS/Telecommunications LiberalizationProgramme, Impact Assessment: ECTEL States, USAIDKARANA ECICT Project, January 2004 Overall, the first steps in reform have led to increasing access to telecommunications services. They have promoted growth in the mobile market as well as competition in other services including fixed and Internet connectivity. The regional cellular penetration rate has increased from 2.3 percent in2000 to an estimated 63 percent bythe first quarter o f 2004.3Reform has also fostered macroeconomic growth by attracting foreign direct investment and increasing employment in the telecommunications and ICT sector. Direct investment in the sector has increased from EC$108 million in 2001, to more than EC$234 million in 2003. The investment flow was expected to reach EC$25lm(US$94m) in2004.4 There are a number o f significant challenges that need to be addressed if the region wishes to increase the use o f I C T to promote economic development and diversification. High communication costs inparticular hamper the development o f investment in ICT activities such as call centers, data processing, and data storage services, and adversely affect telecommunications and financial services that rely on internationalbandwidth. In OECS countries, high speed Internet charges are approximately 45 percent higher than for similar services inother parts o f the Caribbean, domestic leased lines are 148 percent higher per Mbps than for comparator countries inthe region and international private leased circuit prices Cable & Wireless, Digicel, AT&T Wireless, Cariaccess, Cox Cable, Kelcom, S V G TV, Marpin, Sat Telcoms, Orange Caraibe, GNF', TWTC, Emerging Technologies, Grenada Cable Television, The Cable, Cable Television of Nevis, and Cariglobe. EMCWorld Cellular Database. These figures are corrected from the original CARANA numbers, which appeared to double-count investment and employment inCable and Wireless St. Vincent. 2 are 61 percent higher (See Tables 3-5 in Annex 1). These high costs are reflected in comparatively low Internet usage, especially for advanced services. Furthermore, while cellular service is available to most o f the regional population, access to broadband Internet connectivity still remains limited. Moreover, most public institutions such as schools, libraries, post offices, or health centers lack adequate connections to the Internet, which turns into a disadvantage for these institutions and the services they provide andwill also affect competition inICT-enabled services. Studies in the region by multi- and bi-lateral organizations have identified that these high costs are partially driven by prevailing monopolistic behavior in some market segments, such as fixed and leased lines, as well as international fiber access. Thus, initiatives by ECTEL to facilitate new entry o f additional service providers in areas currently dominated by the incumbent would be welcome. Furthermore, higher thanjustified interconnection rates also favor the incumbent at the expense o f the new entrants and their customers. Inequalities in access to and use o f broadband services are driven both by the market reality that provision o f such services to rural areas i s frequently difficult to sustain financially, andby the fact that OECS governments lag in the introduction o fbroadband applications to improve the delivery o f their own services. Inturn, monopolistic behavior and access gaps are also drivenbyweaknesses inthe legal and regulatory framework. The current Telecommunication Act, tariff regulations and the ECTEL Treaty need to be updated and improved. The roles o f ECTEL and the National Telecommunications Regulatory Commissions (NTRC) are not clearly defined and both lack the experience, resources, and training to cope effectively in a rapidly evolving and competitive environment. Additional regulations are needed in dispute resolution, consumer protection, market dominance, and interconnection. Furthermore, a universal access mechanism, which pursues pro-liberalization objectives, combined with government initiatives in broadband applications are needed to ensure widespread connectivity and access to advanced ICT services for government, public institutions and communities. This new project seeks to overcome these remaining gaps and weaknesses, building on the first-stage success o f the Telecommunications ReformProject. 2. Rationale for Bank's involvement The rationale for continuing the Bank's involvement inthe region is to assist the countries inthe consolidation o f the reforms implementedunder the Telecommunications Reform Project and to capitalize on the outcomes o f these reforms. The Bank recognizes that the resulting increase in access and reduction in costs o f telecommunications services has the potential to enhance the region's competitiveness, promote diversification o f the regional economy, and integrate it into the global market. The Bank's involvement fits with activities and projects o f other regional and intemational agencies. The UNDP/UNICT Task Force recently developed an OECS ICT Strategy that recognizes the need to leverage ICT as a catalyst for competitiveness. It addresses the areas o f connectivity, affordable costs, human resource training, and a supportive telecommunications and E-commerce legal and policy environment. The project also fits within the context o f the CARICOM Regional Programming Framework o f September 2002, and the Special Summit o f the OECS Authority (Heads o f Government) on the Economy o f the OECS, held in St. Kitts in October 2002. The former identified in particular I C T as offering significant potential for diversification o f the economies o f the OECS member states. The project complements the initiative by CARICOM and OECS countries to implement a Caribbean Knowledge and Learning Network that will set up IT centers o f excellence within the tertiary education institutions inorder to builda broadbase o f IT professionals inthe Caribbean. The Bank's experience in the sector and knowledge o f the region will contribute significantly towards achieving project objectives. The Bank will utilize its considerable experience in both telecommunications reform as well as in developing strategies to promote universal acces~.~ It will put emphasis on attracting and leveraging private participation and investment in telecommunications infrastructure as well as on public return on invested resources through lower telecommunications prices to consumers andbusinesses. The Bank's participation will continue to provide comfort to the stakeholders on the development benefits o f consolidating past reforms and provide added incentives to undertake new policy and regulatory initiatives. The multi-country nature o f the project will also provide added support to the collaborative, cross-country approach adopted by the OECS in the area o f telecommunicationspolicy and regulation. A number o f other donors are involved in identifying ways to improve competitiveness and increase economic diversification utilizing ICT inthe region. Project funds will not be utilized to coordinate key stakeholders and donors inthe region. However, the World Bank will continue its cooperationwith other bilateral andmultilateral agencies inICT development inthe region. 3. Higher level objectives to which the project contributes The successfill implementation o f the project will contribute to high-level development objectives identified inthe region, namely economic diversification and competitiveness. It will promote universal access to ICT services, facilitate new entry and competition o f service providers, provide economic opportunities for the region by attracting private investment and employment in ICT services, and foster the utilization o f ICT to achieve economic and social development. The project will facilitate the development o f an information society. ICT can help bring the people o f the Caribbean closer together, maximize the flow o f knowledge and information within the region, and provide a gateway to global knowledge resources. Given the correct enabling environment, ICT can assist the region to overcome many o f its physical and economic constraints andcompete globally inthe expanding business processing services market. The project helps address key development challenges defined in the 2001-2005 World Bank Country Assistance Strategy (CAS) for the OECS: promotion o f sustainable, private sector-led economic diversification by providing a supportive environment for promising, newly emerging service industries, thus improving the provision o f public services to the population and strengthening the broader functioning o f the public sector. More specifically, the proposed project fits into that strategy by seeking to improve access and quality and reduce the costs of telecommunication services for communities and businesses, and foster economic diversification bydeveloping the ICT services sector andimprovingthe competitiveness o f firms inthe OECS. Universal Access i s generally defined as a set o f telecommunications services o f a determined quality that should be accessible to all users, independent o f their geographic location at an affordable price. 4 B. PROJECTDESCRIPTION 1. Lendinginstrument The project will be financed through a combination o f IBRD loans and IDA credits. The proposed instrument i s a Technical Assistance Loan (TAL), which was considered the most suitable instrument in terms o f the borrower's needs in regards to technical assistance and specialized advisory services. The following table illustrates the loan andcredit breakdownby country. Grenada, Saint Lucia, and St. Vincent & the Grenadines will eachreceive $270,800 inloan andthe same amount in credit, Dominica will receive the total amount o fUS$541,600 as an IDA credit and St. Kitts & Nevis as an IBRD loan only. A front end fee of 0.5% is applied for IBRD loans. Table 1: Loanandcreditallocationby country bt,Kitts &Nevis I 544,322 1 0 1 544,322 I I I I I I Saint Lucia 272,16 1 270,800 542,961 St. Vincent & the Grenadines 272,161 270,800 542,961 ITotal 1 1,360,805 I 1,354,000 I 2,714,805 I * Includes a front end fee o f 0.5 percent 2. Projectdevelopmentobjectiveandkey indicators The overall development objective o f the project is to improve the access, quality, and use o f telecommunications and I C T services to achieve socio-economic development inthe OECS. To measure the progress toward achieving the project outcomes, the following key indicators were defined: 0 Extendedaccess to advanced ICT infkastructure for community facilities. 0 Reduction on leased lines rates, broadband, and mobile tariffs. The baseline and targets for these development objectives, as well as for measuring outcome and outputs are detailed inthe Results Framework andArrangementsfor Results Monitoring tables in h e x 3. 3. Projectcomponents The project has four main components that were selected considering the client needs, its implementationcapacity, and the challenges identified by ICT sector assessments. COMPONENT 1-Supportfor Legal and Regulatory Reforms 5 The objective o f this component is to strengthen the national and regional regulatory frameworks and promote additional competition inthe telecommunications sector. Emphasis will be given to capacity building o f ECTEL and the NTRCs by providing them with assistances to revise the regional and national sector legislation, and develop a modem interconnection regime. The goal o f the component i s to achieve more competitive tariffs for consumers and businesses in the region as well as to strengthen the institutional capacity o f ECTEL andthe NTRCs. Subcomponent 1.1 - Telecommunications Act and Regulations: The objective o f this subcomponent is to update the Telecommunications Act andtariffregulations o fthe participating countries in accordance with the new market and technological conditions. The subcomponent will also identifyareas where new regulations are needed. Subcomponent 1.2 - Regional Forum for Consensus Building: The objective o f this subcomponent is to establish a regional forum for consensus building and alternative dispute resolution. The forum will facilitate resolution o f issues that have a commercial and public policy dimension and seek consensus on commercial issues among industry players. Subcomponent 1.3 - Alternative Dispute Resolution (ADR) Support: The objective o f this subcomponent is to build capacity within ETEL and the NTRCs to establish positions and guidelines for handling specific anticipated areas o f dispute, and develop a standard model for review and adoption by each member country based on current draft dispute resolution regulations, develop a standard model for review and adoptionby each member country. Subcomponent 1.4 - Development of Pro-competition Policies and Procedures: The objective o f this component is to assist ECTEL and the NTRC's to develop a modem cost methodology for determining fixed-to-mobile interconnection and related consumer rates, and promote lower fixed-to-mobile retail tariffs through reductions in mobile termination charges. In parallel, this component will address the highcost o f leased lines by C&W, by focusing ECTEL and NTRC's work on extending the existing Price Cap Plan (PCP), and by ensuring a fair interconnect outcome. This is a major issue requiring attention when new entrants are allowed into the marketplace. The component will also explore methods to attract additional service providers to services currently dominated by the incumbent, including telecommunications submarine-cable infrastructure. Subcomponent 1.5 - Regional Collaboration, Training, and Resource and Information Sharing: The objective o f this activity is to provide a comprehensive review of the telecommunications legislation, with special focus on interconnection and spectrum management, and implementing numbering and dispute resolution procedures. It includes the provision o f a comprehensive regional program o f related training to the staff o f ECTEL and NTRC and government staff o f the participating countries. Another priority will be to strengthen ECTEL andNTRC capacities to collect and analyze usage andpricing data covering the sector. COMPONENT 2 - Universal Access The objective o f this component is to review current universal access policy, create related guidelines, and provide financial support to establish a Universal Service Fund (USF). The goal o f this component i s to promote and stimulate private ICT investment for under-served communities and public institutions in accordance with the universal access policy framework and reduce the disparities in access to telecommunications infrastructure including the Internet andsubmarine cable infrastructure. 6 Subcomponent2.1 - Universal Service Guidelines: This subcomponent will establish unified policy, strategy, and implementing guidelines that will help ensure the spread o f advanced telecommunications infrastructure to communities andpublic institutions (such as schools) inthe region. It will assist inpreparinghpdating a comprehensive consultationpaper to define Universal Service Guidelines (USG) for improving access to information and telecommunications services through a USF, as well as drafting regulations that would address the management of the Fundand Universal Service Obligations. The steps to be taken will define socio-economic objectives of universal service policies andthe scope o f the USF (i.e., what to fundbyidentifying universalservice projects). An important aspect of implementationis the fundingmechanism. Incase o fthe USF, options are: (a) funding from government budget; (b) contributions from all telecommunications operators; (c) proceeds from privatizations or spectrum and license auctions; (d) subscriber levy; and(e) fundingfrom international development agencies. Other key USF items that the project will support include fund administration, the project selectionprocess, the use o f competitive tender process to allocate subsidies, andperformance monitoring. The expected deliverables o fthis component include the draft Universal Service Fundregulations, aUSFpolicy andUSF OperatingProcedures. Subcomponent 2.2 - Implementation Support: The objective o f this subcomponent is to provide skilled support to ECTEL and the NTRCs to implement the USF regulations, policy and operating procedures to be defined under subcomponent 2.1. Based on one set o f ECTEL guidelines and regulations, each country will, with expert support, adapt them to their particular context. Subcomponent 2.3 - Supportfor Universal Service Fund: The objective o fthis subcomponent i s to establish andprovide a one-time subsidy to the USF that will stimulateprivate investment in expanding broadband connectivity and access to advanced ICT for under-served communities andpublic institutions. The implementation o f the universal access will use output based aid (OBA) type schemes to deliver services. This component will assist ECTELinthe implementation o f an OBA competitive auctiondtender process to select service providers for providing services and the fundingo f the subsidy. A USF and competitive bidding for the subsidy is generally viewed as the best option infinancing andpromoting universal access objectives. Variations o f this component have been implemented inChile, Peru, Dominican Republic, Nigeria, Uganda, Nepal, and Sri Lanka. The Bank and ECTEL are supervising a "best practices'' study funded under a Dutch Consultant Trust Fundto explore potential projects that could becandidates to receive funds from the USF. Whereas subcomponents 2.1 and 2.2 design and implement ECTEL's general universal service policy framework, subcomponent 2.3 will focus on financing specific projects including the possibility o f open access to shared telecommunications submarine cable infrastructure. COMPONENT3 -Information and Communication Technologies (ICT) The objective o f this component i s to improve growth and competitiveness in ICT-enabled services through utilization o f broadband infrastructure. It includes consulting services to identify policies as well as implementing various pilot projects with a particular focus on regional initiatives. 7 Subcomponent 3.1 - Extending the Use of Broadband Applications by Governments and the I Private Sector: The objective o f this subcomponent i s to identify the regulatory infrastructure required to move the ICT Agenda o f each o fthe countries forward and designpilots to encourage regional use o f broadband. This subcomponent will be based on the identification o f the policies required for facilitating the development o f broadband applications. It includes the following key activities: (a) technical assistance to identify policies required for facilitating the development o f broadband applications and infrastructure, and drafting appropriate regulations that would give effect to these policies; (b) elaborating and recommending common information systems architecture and information technology standards for the Member States and finding viable mechanismbywhich complex information systems can be supported andmaintained. (e.g., using remote applications via broadband systems); and (c) designing pilots to encourage regional use o f broadband technologies to increase productivity and employment through purchase o f equipment and services. Subcomponent 3.2. - ICT Pilot Projects: Based upon the consultancy study carried out in 3.1, the project will finance up to five pilot projects that demonstrate the viability and business case for ICT usingbroadband connectivity, with a particular focus on regional initiatives. Subcomponent 3.3. - Alternative communication technologiesfor Radio Spectrum Monitoring System (RSMS): This activity would establish an alternative telecommunications system to transfer data from the RSMS to ECTEL and the five NTRCs through the use o f alternative technology for the provision o f more reliable communication and lower recurrent costs while maintaining international and domestic links using the incumbent telephone network. This component builds upon the past RSMS system that was being satisfactorily implemented by ECTELunderthe previous OECS Telecommunications Reform Project. COMPONENT 4 -Project Management The objective o f this component i s to ensure management and administration o f the overall project. The project would finance related technical assistance by providing complementary resources. Subcomponent 4.1. - Support to Project Administration: This subcomponent would provide resources to support project administration capacity within ECTEL. A dedicated person would be hired for the duration o f the project. This person would have project management, procurement and financial management skills, as well as technical expertise. Subcomponent 4.2.-Audit: This activity would provide fimding for project audits. 4. Lessonslearnedandreflectedinthe projectdesign The proposed project design reflects lessons learned inthe previous OECS Telecommunications Reform Project, as well as those from international best practice and analytical work in the sector. First, based on the previous Telecommunications Reform Project, the proposed project will continue with a regional approach for the development o f the telecommunications and ICT sector. It i s necessary to ensure that telecommunication policies and regulations are updated and compatible across the region. There is a continuing need to take collaborative action to negotiate tariffagreementswith the incumbent operator, Cable andWireless (C&W) and ensure broadband access that involves the creation o f competition conditions. The proposed project will take into 8 account the higher than estimated costs incurred in previous negotiations with the incumbent operator. Second, the project includes continuing support for ECTEL and the NTRCs. An important lesson from similar projects inthe past is that newly created regulatory authorities take a long time to consolidate and require continuous support in developing their institutional, human, and technical capacity. ECTEL inparticular will require additional assistance andresources due to its regional structure andthat it i s operating ina rapidly evolving market. Third, the project design reflects the vital importance o f government commitment from all countries in moving forward on a regional project. It focuses on an area in which the governments intend to take action and have requested the Bank's assistance. The borrowers have been in continuous contact with the Bank and have adjusted the project design and costs according to their specific needs. As implementation tends to be slower and weaker inthe OECS than for the average Bank project, particularly for regional projects, expected dates have been set accordingly andmost components are basically a consolidation o f ongoing reforms since the last project. Finally, the proposed support for the development and implementation o f universal access policies and regulations as well as setting up a Universal Service Fund to finance universal access initiatives will incorporate the lessons from the successes in Latin America, South Asia andAfrica. 5. Alternatives consideredand reasons for rejection Duringthe last three years, the OECS regionhas actively organizedworkshops, conferences, and . e-readiness studies to determine the way forward for the development o f an ICT sector. Yet, no project that would implement recommendations from these studies has been initiated on the ground. Other approaches and components were considered but were later rejected because the Bank and the borrowers decided they did not address a key challenge o f ICT-enabled competitiveness, namelyhighretail prices that users have to pay for accessing inter-carrier, international Internet, and leased lines. Initially, support for building new government networks was considered to provide alternative low cost access to services where the monopoly structure still prevails. In addition, the Bank also considered supporting a regional e-government program, but later decided that the initiative was more suitable for a governance and public sector reform project, which i s currently under preparation. The Bank and borrowers also discussed assistance for the development o f regional websites, an e-strategy, and e-commerce legislation. The borrowers decided to use available grant financing for these activities. Inparticular, the governments o f Grenada and St. Lucia requested financial and technical support to expand the operations o f Call Centers and to develop a cyber park. The OECS Member States decided that these projects should be pursued bi-laterally between each country andother financial institutions such as the IFC. Finally, the decision to implement pilot projects by ECTEL under the I C T component was taken after considering that involving other implementing agencies in such small projects would increase transaction costs and reduce efficiency. 9 C. IMPLEMENTATION 1. Partnershiparrangements There are no partnership agreements inthe project. 2. Institutionalandimplementationarrangements ECTELwill be responsible for executing andimplementing the project. The functions o f a Project Management Unitwere established as a result o fthe OECS Telecommunications Reform Project within the OECS Secretariat andtransferred to ECTEL. ECTEL will procure all Bank-financed goods and services under the project and also operate the financial management system according to World Bank requirements. ECTEL will be responsible for managing the disbursement o f all World Bank loan and credit proceeds, monitoring availability o f Government's counterpart contribution to the project, monitoring implementation progress o f project components, and preparing semi-annual progress reports in accordance with a reporting format acceptable to the Bank.Annual audits are to be arranged and carried out by professional auditors according to Bank and Government requirements and agreements. The Bank will review progress reports, make sure that ECTEL has adequate resources and staffing to meet the challenges o f implementing the project management functions, and provide assistance to ECTEL should achievement o f project development objectives become imperiled by policy changes, institutional issues, or other unforeseen changes. ECTEL will submit to the Bank overall progress reports and financial management reports on a bi-annual basis. The Bank will make occasional field visits to participating OECS countries to meet with beneficiaries and to assure implementation effectiveness on the ground. A mid-term review (about 24 months from the date o f effectiveness) will be carried out to evaluate progress o f implementation against planned objectives. ECTEL will prepare and submit a project completion report within six months o f loan closing. 3. Monitoringand evaluation of outcomes and results The data to monitor and evaluate the outcome and results o f the project will be collected by ECTEL. Sources o f the information and data will include all telecommunications operators, and national and regional entities in charge o f collecting economic and demographic data. The capacity to collect and analyze data shall be supported and strengthened by resources from the project. 4. Sustainability The borrowers have demonstrated strong project ownership and commitment during implementation o f the previous project and preparation of the proposed project. During the Telecommunications ReformProject, the borrowers showed a strong commitment inestablishing and supporting ECTEL. They also implemented significant sector reforms, despite significant pressures from the incumbent operator, which have contributed to promote competition in telecommunications services andincrease private investment inthe sector. The success o f the previous project has encouraged ECTEL Member States to continue with reforms in the sector, such as universal access and interconnection frameworks, and to pursue 10 higher-level reforms such as affordable access to broadband connectivity. They also want to ensure that all established reforms and institutions are strengthened by additional assistance from a new project. The borrowers have shown ownership in the development o f the proposedproject since the beginning andhave beenproactive incomponent design and cost estimation. There are some factors that are critical to the sustainability o f the project's objectives, the most important being the consolidation o f the institutional and regulatory reforms. Although ECTEL and the NTRCs have become more capable o f performing their functions effectively, they still lack the necessary resources and experience to cope in a rapidly evolving and competitive environment. The telecommunications operators, especially the incumbent, are more organized andhave more resources than the NTRCs and ECTEL.Inorder for the project to be sustainable, the regulatory entities need to be financially self-sustaining, and also empowered to resolve conflicts, protect consumer interests, and enforce regulatory decisions. Other critical factors to ensure project sustainability are the successful flow o f private investment into less commercially attractive telecommunication services and sufficient demand for these services. Experience with the previous telecommunications project highlighted the need to clearly define a medium term business plan for ECTEL to help it move forward in a more planned manner. The proposed project coincides with ECTEL's formally developing a three-year business plan with clearly defined activities, indicators, budgets, implementation schedules, andresponsibilities. The project has been designed to address some o f these factors. The establishment and financial support for an USF will encourage private operators to make investments incommercially risky areas. In addition, the project will promote demand for these services by assuring that interconnection prices among operators are competitive andconsumer retail tariffs are reduced. 5. Critical risks and possible controversialaspects Weak institutional capacity of Institutional capacityis weak from an M regulatory entities. administrative and, at times, technical point of view given the complexity ofthe telecommunications environment. The project provides acomprehensiveprogramof resourcesharing, information exchange and training to strengthenECTEL andthe NTRCs institutional capabilities. ECTEL has beenthe key implementing agencyunder the previous TelecommunicationsReformProject. Fiscal situationworsens and ECTEL andthe NTRCs will receive spectrum fees affects contributionsto and a share of sectorrevenuesto eliminate their ECTEL. dependence frompublic funds. I I To component result Incumbent operatorcauses I Ensure participatory approachwith all stakeholders, 1 S 11 RiskMitigationMeasures RiskRating with Mitigation including incumbent operator. regulatory actions (subcomponent 2.3). USF may strengthenposition Set up USF competitive tender process that will M o f incumbent and hamper allow a sufficient number (at least two) o f operators competition. to participate. Meet operators to discuss their appetite to participate intender process and create tender conditions that will facilitate operators to bid. Incumbent may fight an Evaluationcommittee will consist o f the NTRC H unfavorable outcome o f USF commissioners, guidedby policies from the various incourt. Ministries. Evaluation criteria will be clear and the evaluationprocess transparent and accountable. Insufficient demand to make Execute a demand survey to make sure that only M projects self-sustainable. projects that are self-sustainable are tendered. Make sure that public institutions can finance operating costs from their budgets. Overallriskrating M H=High, S=Substantial, M=Modest, N=Negligible 6. Loadcredit conditions and covenants Thefollowing is conditionfor negotiations: 0 A draft Project OperationalManual (POM) is complete andsatisfactory to the Bank; and 0 A detailedProcurementPlanfor the first 18 monthso fthe project implementation, satisfactory to the Bank. Thefollowing is condition of effectiveness: 0 ECTEL is fully staffed to carry out the project management functions, including hiring a project manager, as agreed with the Bank; 0 Finalize the customization o f the financial management software through the development o f a chart o f account andthe reporting format for both the project and ECTEL; and 0 A SubsidiaryFinancingAgreement acceptable to the Bankhas beenexecuted onbehalf o fthe member countries and ECTEL. Thefollowing is a conditionfor disbursementfor subcomponent 2.3 -Supportfor Universal ServiceFund: 0 No disbursement will be made to finance specific projects under the Universal Service Fundunless procedures acceptable to the Bank for the management o fthe Fundhave been developed, including the scope o fthe USF, the selection criteria andprocesses for the projects to be financed, financing arrangements andperformance monitoring mechanisms. 12 D. APPRAISAL SUMMARY 1. Economic and financial analyses Economic Analysis As a technical assistance project, precise economic benefits are difficult to quantify. However, for some components, orders o fmagnitude o fpotential benefits can be estimated. As indicatedinarecent Bankreport6on growth andcompetitiveness issues inthe OECS, improving access and quality andreducing costs o f telecommunication services will be critical to stimulate growth and improve competitiveness not only inICT activities but also inemerging clusters o f other services (e.g., niche tourism, offshore education, and offshore financial services). The provision o fbasic telecommunication services will also improve the provision o f public services to the population and strengthen the broader functioning o fthe public sector. For the regulatory reform components, worldwide evidence suggests the importance o f a successful and sustained regulatory institutionto increasingaccess, improving quality andlowering costs. While the Telecommunications ReformProject took the first steps towards this goal, this project will extend andconsolidate the gains made. Internationalevidence suggests that movingtowards fully competitive, well-regulated marketsfrom monopoly markets canreducepricesby 15 to 30 percent. Assumingthat prices for telecommunications service inthe ECTEL countries fall only an additional five percent as a direct result o f the consolidation and expansion o fregulatory capacity under this project, there will be a significant economic impact. Based on estimates o f consumer surplus andnet consumer savings from price declines underthe Telecommunications Reform Project, a further five percent reduction o f prices will create consumer surplus and savings worth US$3 milliodyear across the reform co~ntries.~ This suggests the reform component alone will gamer very higheconomic returns for the project as a whole. For the universal access components, cross-country evidence suggests considerable consumer surplus from access to ICTs. These direct impacts that can be projected are likely to be outweighed by impacts that are more difficult to estimate. The improved range and quality o f I C T services that will be available at lower cost as a result o f this project will provide increased access to internationalmarkets and create new export opportunities, especially inthe service sector. There is considerable evidence that developing countries which see more Internet use generate more exports thancountries with limited Internet use.' The project will also have a significant social impact equalizing the opportunity to benefit from ICTs for presently excluded groups and easing the ability to communicate with friends and family inthe region and around the world. OECS: Towards a New Agenda for Growth, World Bank, 2005. The originalproject was associated with a weighted average reduction o ftelecommunications charges of about 34 percent over the 1998-2003 period, estimated to be worth $US20m inconsumer surplus and savings. 'A one-percentage point increase inthe share o fthe populationwith access to the Internet would increase total exports as percent o f GDP by 1.4 percentage points and would increase exports to high-income countries by 1.3 percentage points (G. Clarke and S. Wallsten, 2004 Has The Internet Increased Trade? Evidence from Industrial and Developing Countries, World Bank Policy Research Working Paper 3215). 13 For the ICT component, advanced information systems have wide-ranging applications in tourism, health care, education andthe provision o fother government services. For example, the number o fuses o fadvanced networking ingovernment service provision alone has garnered significant economic returns. Piloting such initiatives may leadto considerable efficiencies inthe provision o f government services. The use o f alternative technologies subcomponent will save 30 percent o fthe recurrent communication costs between ECTEL and the NTRCs. These savings are expected to pay for investment costs after 16 months. Financial Analysis As a technical assistance loan, the activities envisaged underthe project for support are not investments designed to generate significant financial returns to the implementing agencies. Evenso, the financial sustainability o fcertain components shouldbe addressed. Expanded ongoing activities under ECTEL andthe NTRCs, include the regional forum, procedures related to universal access, interconnection, tariffs and spectrum management. These may require additional budget for the regulatory bodies and ECTEL. This might involve additional specialist staff. Some additionalbudgetary resources may be required as a result o f expanded regulatory activities, as the sector becomes increasingly attractive to investors. Iffee andlicense payments increased 1percent as a result ofnew investments, this would more than cover the cost o f additional staff. The investments made under the universal access regime should be financially sustainable. This will be ensured bycapping access fundpayments for aparticular access initiative at the capital cost o f equipment ensuringthat the runningcosts o fthe service provided under the fund can be met from revenues generated. 2. Technical The selected technical design o f the project corresponds with the borrowers' needs and implementation capabilities. It also considers the Bank's experience from the previous project. Technical viability is primarily a concern for the system specifications and operation o f equipment required by ECTEL and the NTRCs for radio spectrum monitoring and use o f alternative technology systems such as wide-area networks and Internet. The technologies supported by the project have been demonstrated worldwide as technically sound. While this equipment i s readily available, it is also highly specialized. To minimize technical risks associated with this project activity, the project supports additional training in equipment operation and spectrum database use. The second component o f the project includes the design and establishment o f a USF. The approach utilized will consist o f contracting out service delivery to a thirdparty, usually a private firm, wherepayment from the USFistiedto the actual deliveryofthese services. Similar models have proven to be very successful in countries such as Peru and Chile, where private operators have installed public phones and Internet community centers in underserved areas. As ECTEL member countries are in their first phase o f the liberalization process, the decisions will need to be made to ensure that the liberalizationobjectives for each country are not undermined. 14 Fiduciary FinancialManagement The overall risk o f the project is moderate, characterized by an experienced and organized implementing entity and relative simplicity o f the activities to be implemented. The financial management arrangements and the findings o f the financial management capacity assessment for the project are detailed inAnnex 7. The major risk area lies in the Universal Service Fundthat will provide grants to private sector firms. The mechanisms have not been defined yet. But the risk i s considered moderate, as the project will support the development o f guidelines requiring the approval o f ECTEL, the NTRCs, and the Bank. This will ensure that potential risks are adequately addressed. The preparation o f detailed procedures for the management o f the Fund satisfactory to the Bank will be a disbursement condition for the financing o f specific projects under the Universal Service Fund.These procedures will define the scope o fthe Universal Service Fund, the selection criteria and processes, and the Fund management, including financing and performance monitoring mechanisms. ECTEL will have the financial management responsibility o f the project. Its financial management i s found to be globally satisfactory. But it needs to be adapted to the current context to meet ECTEL statutory requirements to prepare its own financial statements (as an entity) and the requirements o f the new project. As o f now, ECTEL's financial management system i s shaped around the needs o f the OECS Telecommunications Reform Project. It needs now to be elevated to a level where it can meet both ECTEL's statutory requirement andthe need to ensure the project's financial management. ECTEL has already been implementing measures including customizing the financial management software and preparing a new financial policy and procedures manual, which has just been approved by its Board. The manual has beenreviewed and considered to be satisfactory subject to minor changes to include procedures more specific to the project. It is expected that the remaining actions to be implemented, consisting o f finalizing the customization o f the software and the hiring o f the project auditor, can be completed soon. They are considered as effectiveness conditions. Procurement capacity The Overall Procurementriskhas beenrated"average", based onpast experience implementing a World Bankproject. Procurement o f goods and services, including consultants' services (firms and individuals) will beprocessed inaccordance with World Bank guidelines Procurement under IBRDLoans and IDA Credits,May 2004, Selection andEmployment of Consultants by WorldBank Borrowers, May 2004. The implementation arrangements for the project are detailed inAnnex 8. An assessment o fthe capacity of the implementing agency (ECTEL) to implement procurement actions for the project has been carried out duringthe pre-appraisal mission. The ECTELproject team includes staff with experience inWB procurement procedures. The team will be further strengthened with the inclusion o f a suitably qualified project manager financed under the project, who will also have experience inprocurement and World Bankprocedures. Recruitment o f a project manager is a condition o f effectiveness. An action planhas been designed to mitigate the potential risks and strengthen ECTEL's procurement capacity. Agreed upon corrective measures to be implemented byECTEL are: 15 0 Hiring o f a project manager with experience in procurement and World Bank project implementation procedures, along with other appropriate technical skills to implement the project by effectiveness. 0 Preparation o f a detailed procurement plan for the first 18 months o f implementation i s due by appraisal. Finalplanto be agreed bynegotiations. 0 Preparation o f a draft financial polices and procedures manual with a specific section on procurement. This section i s to detail all the procedures and channels of responsibility as well as the flow o f documentation and reflecting World Bank procurement policies and procedures. Due for review before negotiations. Finalto be approved by effectiveness. 0 Preparation o f draft standard bidding documents and RFPs for the first 18 months o f the project activities, by April 30,2005. 3. Social At the local level, populations will benefit from easier social and emergency communication as well as lower access charges. A large Diaspora population suggests that the project countries will also gamer significant social benefits from less expensive and more widely accessible international connectivity. The results o f the Telecommunications Reform Project were to increase the quality and range o f services available while providing lower tariffs for consumers. The proposed project plans to continue expanding the benefits o f a competitive telecommunications sector to the general population and extend those benefits to socially marginalized communities. The socio-cultural andpolitical opportunities that these communities will gain from having access to ICT networks may be considerable. It is widely demonstrated that better access to ICTs improves earningopportunities and the quality o f government services received by previously excluded groups. The project will indirectly have a social impact on better employment opportunities to young graduates by providing better access and more affordable services. The proposed project also plans to continue the effort to create channels o f communication with the civil society with regard to how ICT can contribute to economic development. During the Telecommunications Reform Project, ECTEL initiated a public awareness campaign, where community meetings were organized in schools and community centers. The objectives were to discuss issues related to telecommunications in the region, disseminate general information on the operations, h c t i o n and structure o f ECTEL including a web site, and develop capacity for information exchange between ECTEL and the public inthe participating countries. 4. Environment There are no significant environmental issues inrelation to this project. The Bank will not be financing civil works, which i s an area normally requiring environmental assessment. The project has been classifiedcategory C for its low impact on the environment. 16 5. Safeguard policies Safeguard Policies Triggered by the Project Yes No Environmental Assessment (OP/BP/GP 4.01) [I [XI NaturalHabitats (OP/BP 4.04) [I [XI Pest Management (OP 4.09) [I [XI CulturalProperty (OPN 11.03, beingrevisedas OP 4.11) [ I [XI InvoluntaryResettlement (OPBP 4.12) [I [XI Indigenous Peoples(OD 4.20, beingrevised as OP 4.10) [ I [XI Forests (OP/BP 4.36) [ I [XI Safety o fDams (OP/BP 4.37) [I [XI Projects inDisputedAreas (OP/BP/GP 7.60) [ I [XI Projects on International Waterways (OP/BP/GP 7.50) [ I [XI 6. Policy Exceptions and Readiness There will not be anypolicy exceptionsto this project. Most ofthe applicable readinesscriteria, detailed component activities, budgets, output and outcome indicators, implementationplanand schedule, procurement plan, terms of reference for consultants, and financial management plan have been definedat appraisal and are includedinthe draft Project Operational Manual, which i s to be agreedat negotiations. Governments' investment budgets, including counterpart b d s , have been definedat project appraisal. 17 Annex 1:Countryand Sector or ProgramBackground TelecommunicationsandICT DevelopmentProject Background The economies o f the OECS are facing a dual challenge o f slowing economic growth and persistently high unemployment and poverty rates. Real GDP growth averaged 5.7 percent per year in the 1980s, dropping to 2% percent per year since the mid-1990s. Regional economic dynamism has been affected by reduced preferential market access for traditional crop exports, stiffer competition from other tourism destinations, and fiscal imbalances and highpublic sector debt levels. This trend was exacerbated in the early 2000s by several negative external shocks (natural disasters, the 9/11 events, the slowdown in the global economy and oil price increases). The 2001-05 World Bank's Country Assistance Strategy (CAS) for the OECS identifies the following key development challenges for the OECS: the promotion o f sustainable, private sector-led economic diversification by providing a supportive environment for promising, newly emerging service industries, improving the provision o f public services to the population and strengthening the broader functioning o f the public sector. The region urgentlyneeds to improve competitiveness in order to safeguard investment inflows, reinvigorate growth and generate employment. As members o f a quasi-currency board arrangement, however, improving international competitiveness o f the OECS countries will depend on real increases in the efficiency o f production. In addition, the region will need to carve out new areas o f competitive advantage in the global economy in order to diversify its economies and create a more stable and less vulnerable platform for development and poverty reduction. The governments o f the OECS have placed the reform o f their telecommunications sectors at the center o f their strategy to diversify their economies, enhance export competitiveness, and increase economic growth. The economic linkages o ftelecommunications to the other productive sectors in the economy are pervasive. Higher quality, lower prices and greater variety o f telecommunications services impact positively on the growth o f sectors such as tourism, agriculture, and manufacturing. Moreover, a competitive telecommunications sector is essential to enable the emergence o f information andtechnology services, such as outsourcing information proce~sing.~ICT can also contribute to eliminate the geographical barriers that small remote states face, to become more integrated inthe global economy. The OECS recognizes inits development strategy that ICT offer significant opportunities to achieve greater economic growth and diversification and contribute to poverty reduction. They are pursuingopportunities offered by information technologies, taking full advantage o f a recently liberalized andregulated telecommunications sector. To ensure that the appropriate infrastructure and service platforms are established, countries inthe region have favored a broad sub-regional approach towards telecommunications reform. In1998, five country members o f the OECS (Dominica, St. Kitts & Nevis, Grenada, St. Lucia, and St. Vincent.) established a common regulatory framework, created the EasternCaribbean Telecommunications Authority Such as key data entry, manuscript conversion, health care claims processing, call center operations, telemarketing, computer-aided design, geographic information services, document storage and management, and software development. 18 (ECTEL)--the first regional telecommunications regulatory authority inthe world--to facilitate the harmonization of the regulatory regime. Besides licensing new services providers ECTEL andthe NTRCs have also recently signed the Price Caps Plan (PCP) ImplementationAgreement. The PCP sets the maximumlevel o fprices for certain services offered by a telecommunications company where it has dominant or monopoly advantage. It does this by imposing caps on how muchthe rates for a group o f services (or "basket") can change. Under the negotiatedprice cap plan, residential access line rates are specified andcanneither go up nor down during the four years of the plan. Business access line rates can only increase by the rate o f inflation in any given year. The remaining regulated services must be reduced, on average, by an amount representing expected productivity improvements (inthis case 2.5 percent per year), less inflation. International and mobile services are not included inthe price cap plan as there i s sufficient competition. Under the terms o f this agreement, C&W fixed line customers in the ECTEL Member States should pay as much as 22 percent less for their fixed-to-fixed local calls from December lst, 2004, with a further 20 percent reduction for fixed-to-fixed local calls coming in December 2005. Local calls on the fixed network will decrease from 9 cents (day), 8 (evening) and 6 cents (weekend) to 7 cents, 5 cents, and 5 cents respectively on December lst, 2004. Evening and Weekend rates will hrther decrease to 4 cents and 4 cents respectively on December lSt, 2005 (see Table 2). The agreement also makes provision for additional benefits to consumers - average reductions o f 10 cents per minute for fixed-to-mobile calls by 1December 2005. Residential fixed customers will also receive 60 free minutes o f local fixed-to-fixed calls in the evenings and on weekends with effect from 1December 2004." Table 1: PriceCaps Plan: InitialRates andPricingCommitmentsfor Voice Frozenat existingrates. (per month) Grenada 24.00 I 8.99 St Kitts &Nevis 26.40 19.89 St Lucia 26.40 19.89 St Vincent & 20.40 17.64 the Grenadines BusinessAccess Lines ECTELcountries: 48.00 I 17.98 Allowedto increase byInflation (per month) _ _ _ _ _ ~ ~ Fixedto Fixed(centsper minute) & Evening Weekend Dav Evening Weekend -- Years Year 1 913 813 612 7 1 3 512 5 I 2 2-4 7 1 3 411 41 1 Fixedto Mobile(cents per minute) Dav Evening Weekend I& Evening Weekend - Year 1 81/30 80130 7 8 / 2 9 7 6 / 2 8 7 5 / 2 8 7 5 / 2 8 - Years 2-4 7 1 / 2 9 69/26 6 9 / 2 6 loActual implementationdate is January 1,2005. 19 Service Current Rate (EC%/USD) N e w Rate Free Evening and Weekend Minutes None 60 (Year 1) 80 (Years 2-4) In terms of public return on invested resources regarding the consultancy of US$ 0.55m supported by the World Bank project, this has to take some significant credit for an annual consumer benefit o f approximately US$ 20 million interms o f lower fixed line prices delivered to date, as well as the considerable rollout and price reductions seen in other market segments including mobile and Internet. Both the initial project and consulting support were instrumental in negotiating the recent price cap agreement, which is scheduled to deliver US$ 7.5m in additional price reductions over the next two years alone. Impact of the telecommunications reform process This first step o f liberalization has promoted growth inthe mobile market as well as competition in other services including fixed and Internet. Fourteen entrants have been granted licenses to provide fixed and mobile services. According to data from EMC World Cellular Database, the regional cellular penetration has increased from 2.3 percent in 2000 to an estimated 63 percent by the first quarter o f 2004. As a result, by the end o f 2003, St. Lucia and St. Vincent were among the countries with the highest penetration levels in the Caribbean, with 88.9 and 61.4 percent respectively, surpassing the regional average o f 53.1 percent. To foster lower prices in international connectivity, ECTEL has recommended the NTRCs to issue a license for a second submarine cable that connects all OECS countries. The new cable will increase broadband access and enable the emergence o f greater competition inthe fixed line market, currently dominated by C&W. The increase innetwork capacity and competition among operators has caused prices to drop for most services. According to the ECICT Impact Assessment report produced by CARANA/USAID, average prices for calls from the region to the United States have been reduced by more that 70 percent since that start o f the liberalization process. Liberalization o f the sector has also promoted macroeconomic growth by contributing to increases in foreign direct investment and employment in the telecommunications and ICT sector. A report by C A R 4 N A indicates that direct investment in the sector has increased from EC$129 (US$48) million in 2001, to more than EC$240 (US$90) million in 2003. The investment flow i s expected to reach EC$286 (US$107) million in 2004. An expansion in employment opportunities has begun as a result o f opening up the sector, as newly licensed companies start operations and as employees from the incumbent operator leave to start 20 their own businesses. Direct employment by new service providers has increased from 377 in 2001 to an expected 693 at the end o f 2004. Direct employment inthe sector has decreased from 1,615 employees in2001 to approximately 1364 reported in 2003; however this is primarily due to outsourcing arrangements by Cable and Wireless. It i s estimated that over 500 new jobs were created inthe region inthe areas o f Internet services and customer premises equipment services, suggesting an overall positive impact o freform on employment inthe broad ICT sector. Remainingconstraintsinthe telecommunicationssector During the past several years, there has been considerable interest in advancing a larger ICT agenda in the OECS region. In2002, ICT Assessments for each o f the five ECTEL member countries were completed as part o f the Eastern Caribbean ICT Initiative carried out by CARANA, funded by USAID. In addition, the OECS undertook a complementary initiative by developing a regional I C T Policy and Strategic Plan with World Bank funding. These studies identifythe following constraints as the most important to buildingonthe reformprocess. (a) Weaknesses in the legal and regulatoryframework The newly established regulatory regime in the OECS i s under pressure from the incumbent, multinational new entrants, and local investors. It lacks the experience, resources, andtraining to cope effectively in a rapidly evolving competitive environment. The roles o f ECTEL and the NTRCs are not yet legally clear. ECTEL's position as an advisor to the NTRCs, an advocate in proceedings before the NTRCs and a type o f regulator, i s confusing and may invite legal challenges over time. Additional regulations are needed in dispute resolution, consumer protection, market dominance, andinterconnection. (b) High cost and disparities in access to telecommunications infrastructure While the Price Caps Implementation Agreement discussed earlier has partially addressed some o f the pricing issues, the relatively high cost and unavailability o f telecommunications services remain an important constraint in the sector. The high retail price o f international calls, Internet connections, and leased lines i s deterring the development o f new economic opportunities such as business processing services (see Table 3, 4 and 5). Although the market has been liberalized, monopolistic behavior still prevail in some market segments, such as international leased lines. Currently, ECTEL is reviewing application for three undersea fiber optic networks. This is a positive development and ECTEL will need to fast track the issuing o f additional licenses to facilitate competition. The present backbone provider charges very high rates to the growing number o f ISPs and international long-distance operators. The same market dominance from the incumbent i s influencing high interconnection rates, such as infixed-to-mobile. ECTEL member countries must regulate the dominant operator so that it offers competitive rates for ISPs and other competing operators that interconnect with its network. While access to the telecommunications infrastructure has increased dramatically--with more than one cellular telephone per two inhabitants--access to the Internet still remains low. Access to a broadband connection is still unavailable in parts o f the region. Opportunities being implemented to enhance broadband external connectivity in nearby countries such as Guadeloupe andMartinique could also be carried out inthe OECS with competition inprovision o f submarine cable infrastructure. The current legislation and policy includes elements for 21 framing a universal access strategy, but the process o f establishing a Universal Service Fund remains to be undertaken. The lack o f access to the network infkastructure and the related high access rates must be solved in the short term, as they will impact other initiatives such as provision o f distance learning facilities as well as private sector competition in ICT-enabled services. 22 E- Table3 -Cost oftelecommunicationservices (in US$) Countries Anguilla C&W (ADSL) 55 0 i 0.67 The Cable Co (cable) 47 (512 kbps) Weblinks (WiFi) 60 (512 kbps) Bahamas SRG 0.49 (indigo) BTC 0.5 1(reduced) BTC 0.99 (regular) Coralwave(cable) 35 (512 kbps) 0 55 (1Mbps) 0 I 70 (2Mbps) C&W (ADSL) 30 72 (256 kbps) 0 I97 1-18(day) Barbados 87 (768 kbps) 97 1.00 (eve.) ~~~ Dominican Verizon 15.55 7.40 Republic Tricom(cable) 8 (128kpbs) 0 23 (512 kbps) 0 53 (1,5 Mbps) 0 ECTEL C&W 48 92 0 0.47 Guyana GT&T 0.56 (peak) 0.50 Jamaica C&W (ADSL) 35 66 (128kpbs) 0 I50 0.26 93 (256kpbs) 50 129(768kpbs) 50 Digicel 0.29 Cybervale 16.39 12.30 Emoquad 17 0 Angel 20.70 9.43 Infochan (ADSL) 35 59 (256kpbs) 0 1 150 390 (1Mpbs) 150 670 (1SMpbs) 150 Kasnet(MMDS) 37 75 (256kpbs) 40 l300+ 100(384kpbs) 300+ 200 (512kpbs) 300+ N5 (MMDS) 55 (256kpbs) 300 I Telesur 0.44 Suriname Greentone 0.15 EDUCONS 10 Trinidad& TSTT 56 65 (128kpbs) 18.75 I 7 8 0.32 (day) 0.27 Source: Stern (2004) -Draft 23 optic Companies such as C&W and Delphi have also indicated that they have difficulties in finding skilled staff. Most member countries o f ECTEL do not have a national policy or strategy for the integration o f I C T into the education system. St. Lucia and Dominica have prepared a draft ICT policy for educationbut these remainto be implemented. Other initiatives inthe region are based on equipping schools with computers without broader efforts to incorporate their use in the curriculum. CurrentinitiativesinICT All ECTEL member governments have explicitly recognized that ICT can have an important impact on economic diversification, educational outcomes, and more effective government services. The region's international partners have also acknowledged the role o f ICT in improving competitiveness and increasing economic diversification both within the OECS and the Caribbean. Several workshops, conferences, and initiatives have started a process o f transforming studies and recommendations into actions. In St. Lucia, the Ministryo f Education has prepared a draft ICT Policy for Education System, which among many objectives, intends to encourage principals, teachers and students within the education system to use ICT to enhance the teaching-learning process. Grenada has established an I C T policy, which envisions the creation o f a national network that would electronically link all government ministries, departments and statutory bodies to local and wide area networks. Once established, the Government o f Grenada would like to use this network along several dimensions, such as improving the exchange o f information between the police, immigration, and drug enforcement authorities. The government, however, has other rebuilding priorities following the recent hurricane. The construction and operation o f a submarine cable between Guadeloupe and Puerto Rico via St. Martinis underway with subsidized public funding through the EuropeanUnion and French Government, which could possibly be extended to OECS/ECTEL member countries. 25 Annex 2: MajorRelatedProjectsFinancedby the Bankand/or other Agencies TelecommunicationsandICT DevelopmentProject Projects Countries Sector issues LatestSupervision(PSR) addressed Ratings Implementation Development Progress(IP) Objective (DO) Supportedby World Bank OECS Dominica Regulatory reforms Highly Satisfactory Telecommunications Grenada inthe satisfactory Reform St. Lucia telecommunications St. Kitts & sector Nevis St. Vincent & the Grenadines OECS Education Grenada Buildhuman Development Project St. Lucia capital to support St. Kitts & diversification o f Nevis economy St. Kitts St. Lucia St. Vincent & St. Kitts the Grenadines Supportedby other agencies _ _ OECS Trade Policy Antigua & Strengthen regional Not applicable N o t applicable Assistance Project Barbuda capacity to (Canadian International Dominica participate and Development Agency Grenada compete inglobal ( C I W St. Kitts & economy Nevis St. Lucia St. Vincent & the Grenadines Eastern Caribbean Dominica Regulatory reforms N o t applicable Not applicable Information and Grenada in Communications St. Lucia telecommunications Technology Project St. Kitts & sector (USAID) Nevis St. Vincent & the Grenadines OECS Needs Dominica Competitive Not applicable Not applicable Assessment and Grenada advantages in ICT Feasibility Study: clusters and ICT- 26 Improvingthe St. Lucia enabled clusters Competitiveness and St. Kitts & Increasing Economic Nevis Diversificationinthe St. Vincent & Caribbean-The Role the Grenadines of ICT (infoDev) 27 Annex 3: ResultsFrameworkandMonitoring TelecommunicationsandICT DevelopmentProject ResultsFramework OutcomeIndicators To improve the access, quality Prices for a basket o f key To evaluate impact o f universal and use o f telecommunications communications services (lease access program and regulation and ICT services to achieve lines, Internationaltariffs, policy. socio-economic development in mobile, and intemational rates). the OECS. Number o f community centers providing Broadbandaccess across region. ResultsIndicatorsfor Each Component Component One: Component One: Component One: Reductionincommunications Domestic leased lines: monthly To monitor effectiveness o f tariffs as a result o f competitive rates are reduced by 30 percent. competition framework and network charges among operators InternationalLeased lines: identify areas where tariff on local and intemationalroutes. monthly rates are reducedby 50 regulation mightbe neededto percent. address monopoly structures. Mobile retail tariffs drop by 25 percent. Intemational communications prices drop by 50 percent. Component Two: ComponentTwo: ComponentTwo: Private operators invest in Broadband ICT access available in To determine ifUniversal network infrastructure and 100points ofpublic access across Service Guidelines and policy provide ICT access to previously region. have been adequately underserved Leverage o f USF subsidies as ratio implemented and there has been communities/facilities. o f private investment vs. subsidies. leverage o f the subsidies o f Inthis case the leverage factor also private sector investment. follows from the financial model. In the above-mentioned Chile example the leverage factor was 6.8. Component Three: ComponentThree: Component Three: Demonstrate the effective use o f Pilot project established inthree To demonstrate effective use of Broadbandapplications provision countries for altemative affordable, efficient and through access to broadband communications between the competitive availability o f capacity at reasonable cost. ECTEL Member States. broadbandservices. 28 I 0 & 0 2 W 0 2 6 0 l- 2 52 0 2 E x b E E .d 0 w m t- 4 VI 3 I- 00 4 VI 3 Annex 3: Results Framework and Monitoring (cont.) Arrangements for results monitoring (cont.) - co Completion 1.Legaland Regulatory Reforms Reductiono f communication tariffs Telecommunications Act and relecom Act as a result o f competitive network regulations reviewed mdregula- charges among operators on local .ions updated and internationalroutes Decreaseby: Decrease by: Monthly rates for Domestic leased 15% 30% lines Monthly rates for InternationalLeased lines 25% 50% Mobile retail tariffs 12.5% 50% International communication prices 25% 50% 2. UniversalAccess Private operators invest innetwork Increase inCommunity centers X+30 x+100 infrastructure and provide ICT with BroadbandICT access access to previously underserved Universal Service Guidelines and - communities/facilities Guidelines are policy designed implemented Increase inleverage o f USF subsidies as ratio o fprivate investment vs. subsidies Tbd Tbd 3. ICT Demonstrate the effective use o f Monthly rates for Broadband 10% 20% Broadbandapplications provision services costs (decrease) through access to broadband Increase inusage o fbroadband capacity at reasonable cost Tbd Tbd services Annual communications for RSMS (decrease) 10% 25% 4. ProjectManagement Provide Administrative Support to Project manager Hired Hired the project Audit firmhired Hired Hired 31 Annex 3: ResultsFrameworkandMonitoring(cont.) Arrangementsfor resultsmonitoring(cont.) Project Objective Basket o f prices from component (Baseline 100 at end 2004) 80% 60% Number o f community centers with broadband access (baseline at end Xt-30 x+100 2004 to be determined) 1. LegalandRegulatoryReforms Monthly rates (inUS$) for Domestic leasedlines 1,417 (El) 1,167 1,423 (Tl) 1,089 11,682 7,788 Monthly rates for Intemational Leased lines 15,382 10,255 23,084 15,390 23,999 16,000 Mobile retail tariffs 0.69 0.59 Internationalcommunication prices 0.35 0.23 2. Universal Access Increase inCommunity centers with BroadbandICT access X+3 0 X+lOO Universal Service Guidelines andpolicy have been implemented Implemented same Increase inleverage of USF subsidies as ratio o fprivate investment vs. subsidies Tbd Tbd 3. ICT Monthly rates for Broadband services costs (decrease) 83 74 Increase inusage o fbroadband services. Tbd Tbd Annual communications for RSMS (decrease) 10% 25% 4. Project Management Project manager Hired Hired Audit firmhired Hired Hired 32 Annex 4: DetailedProjectDescription TelecommunicationsandICT DevelopmentProject Component1-Support for Legal andRegulatoryReforms:US$840,000 The objective o f this component is to strengthen the national and regional regulatory frameworks and promote additional competition in the telecommunications sector. It will provide assistance to ECTEL and the NTRCs to revise regional and national sector legislation, and to develop a modem interconnection regime. The goal o f the component i s to achieve more competitive tariffs for consumers andbusinesses inthe region. 1.I TelecommunicationsAct and Regulations The current versions o f the Telecommunications Act and tariff regulations o f each country need to be updated and improved as the region moves forward in overseeing a multi-carrier environment. There i s a need to update these after nearly four years o f experience, and to determine changes needed to the foundational documents (Treaty and Telecommunications' Laws). The subcomponent will also identifyareas where new regulations are needed. Total cost: US$llO,000. 1.2 Regional Forumfor ConsensusBuilding There will be a growing interest by private operators to have ECTEL and the NTRCs rely on disputeresolutionas opposed to ex ante regulation, once market competitionevolves. The speed, openness, and transparency o f handling licensee disputes will have significant consequences for sector dynamism, and will directly impact the level o f investment, growth and expansion o f networks and services. Failure by ECTEL and the NTRCs to quickly and effectively resolve disputes will result in delays in the introduction o f new services, continuing higher prices and lower quality o f service for consumers. An effective dispute resolution capability and process will help establish predictability and certainty, andwill improve transparency. Failureto address disputes collectively will diminishthe intendedbenefits o f the regionalized ECTEL approach. This activity will assist the establishment o f a regional forum for consensus building and altemative dispute resolution. The forum should facilitate resolution o f issues that have a commercial and public policy dimension and should seek consensus on commercial issues among industry players. The areas where the mechanism will become useful are the following: fixed-to-mobile and fixed-to-fixed interconnection; pricing and technical arrangements between ISPs (and other value-added service providers) and local fix line operators; use o f rights o f way; pricing o f access; and site sharing and co-location. Total cost: US$140,000. 1.3 Alternative Dispute Resolution (ADR) Capacity Building The objective is to establish positions and guidelines for handling specific anticipated areas o f dispute, and based on current draft dispute resolution regulations, develop a standard model for review and adoption by each member country. To the extent possible, the TA for this subcomponent will include discussion leading to the adoption o f the regulation to include dialog and possibly public hearings for buildingsome base level o f consensus amongst industry players on business and commercial interests. And where possible, the positions/guidelines on areas such as fixed-to-mobile and fixed-to-fixed interconnection, pricing and technical arrangements between ISPs (and other value-added service providers) and local fix line operators, use o f rights 33 o f way, pricing of access and site sharing and co-location, should also be made public in an effort to avoid possible future disputes from even arising. Total cost US$llO,000. 1.4 Development of Pro-competition Policies and Procedures Interconnection issues are the biggest concern when new competitors enter the telecommunications market. It is essential to establish fair and equitable interconnection rates between the incumbent and new entrants to allow for the functioning o f a multi-operator environment. The experience in the ECTEL member countries has been that the incumbent leverages its dominant position, which causes delays in the introduction o f services by new entrants. The incumbent's position allows it to charge high interconnection rates, which elevate the cost and retail price for accessing inter-carrier, international, Internet, and leased lines. Specific areas that need attention are the current fixed-to-mobile interconnection regime, mobile- to-fixed call termination and leased line fees ineach o f the ECTEL member states. As the closest broadband access source to the Eastern Caribbean with competitive prices i s Puerto Rico, attention will also be provided to expand access to telecommunications submarine cable infrastructure. This activity will assist ECTEL and the NTRCs to develop a modem cost methodology to determine interconnection and related consumer rates. The methodology would be developed in consultationwith fixed andmobile operators andwill consider international best practice. One o f the objectives o f the methodology will be to lower fixed-to-mobile retail tariffs through reductions in mobile termination charges. The activity will review the curreat interconnection regime and recommend amendments in order to implement the new methodology. Finally, the component will also explore methods to attract additional service providers to services currently dominatedbythe incumbent. Total cost: US$245,000. 1.5 Regional Collaboration, Training, and Resource and Information Sharing The objective o f this activity i s to support continuous training to ministers, board members, commissioners, and ECTEL and NTRC staff in telecommunications regulation, especially focusing on interconnection, numbering, dispute resolution procedures, and spectrum management. It includes a comprehensive review o f the telecommunications legislation, with special focus on interconnection and spectrum management, implementing numbering and dispute resolution procedures, as well as a regional program o f related training for ECTEL and NTRC staff and government officials o f the participating countries that consists of: (a) courses in specific areas o f telecommunication regulations; (b) short term, on-the-job training provided by consultants undertaking on-going assignments; (c) short and long term, planned courses and programs (e.g., the Public Utility Research Center (PURC) at the University o f Florida, E-MRP from University of West Indies); and (d) regional seminars and workshops on current topics organized and delivered in response to emerging needs. Depending on the regulatory needs o f ECTEL, it will also consider inclusion o f an intemational technical advisor to ECTEL. Total cost: US$235,000. Component2 UniversalAccess: US$1,270,000 - The objective o f this component i s to review current universal access policy, create related guidelines and provide support to establish a Universal Service Fund (USF). The current telecommunications legislation and policy includes elements for framing a universal access strategy. However, the process o f establishing a USF remains incomplete. This component will assist in the implementation o f a common universal access framework and make it operational 34 across the ECTEL member countries, with a focus on providing advanced I C T services (ie., beyond basic telephony services) that positively impact the socio-economic development o f local communities. 2.1 Universal Service Guidelines (USG) The ECTEL Treaty established inMay 2000 provides a general outline to establish a USF with the purpose of promoting access to affordable telecommunications services. Furthermore, the Telecommunications Act in each o f the countries includes a provision for universal access, recognizes the role of ECTEL with regards to guidance in this area, and acknowledges the contributionrequired from each licensee towards the USF. As a general rule, each license includes the contribution requirement to the USF but implementation has been postponed. Consultants funded by USAID produced a white paper on universal service mechanisms and policy options for ECTEL and its member countries, as well as a draft regulation on universal service. The recommendations provided inthe report have not been implemented. The focus o f the effort under this project i s to establish a unified policy, strategy, and implementing guidelines that help ensure advanced telecommunications infrastructure i s more widely accessible to all communities andpublic institutions inthe region. Consultants will assist in preparinghpdating a comprehensive consultation paper to define Universal Service Guidelines (USG) to improve access to broadband connectivity through a USF. The first element o f the component will be a review o f the relevant policy, legislative and regulatory provisions with respect to universal access. It will follow the development o f a business model and framework for the USF tender process being developed by the Bank and ECTEL as part o f project preparation activities. The second element will be a consultation process that will include a workshop to discuss and seek consensus from OECS countries in regards to implementing the proposed USF tender process for ICT projects. The third element will provide assistance to ECTEL and the NTRCs inpreparingthe USF regulations, Policy and Operating Procedures, establishing the USF, and help plan and support its implementation over the subsequent 3 years. Total cost: US$150,000. 2.2 Implementation Support This will include assistance to ECTEL and the NTRCs in the implementation o f the USF regulations, USF Policy and USF Operating Procedures and assistance in starting the process o f collecting funds, selecting projects and issuingUSF tenders over a period o f 3 years. Total cost: US$120,000. 2.3 Supportfor Universal Service Fund (USF) This objective ofthis sub-component is to establish the USF andprovide a one-time subsidyto service providers. Based on experience from other countries, the amount that will be generated from the 1percent o f operators' gross revenues for the USF will be insufficient to cover immediate needs. The objective o f the USFwill be to stimulate private investment inexpanding broadbandconnectivity and access to ICT for under-served communities andpublic institutions. Private companies will be selected by following a competitive biddingprocess andthe minimum subsidy that i s required to provide services inthe member states. Thus, the implementation o f the USF will use output based aid (OBA) type schemes to deliver services. To assure adequate management o f the USF, the subcomponent will ensure that clear procedures for its operation are developed, as well as transparent criteria andinstitutional arrangements established. Based on the ongoing analysis and advisory work, the USF design is not fully developed. However, ECTEL i s clear that it needs to enhance competition inthe marketplace, and i s considering awarding the 35 subsidies to proposals that canbe evaluated according to a number o f criteria such as price, quality o f service, and also the extent to which the proposals meet the liberalization objectives o f the member states. Thus, potential service providers can be invited to submit a proposal with the following terms: (i) provide broadband Internet access to all beneficiaries at specified ratehandwidth combinations andinstallation costs; (ii) minimumsubsidyrequestedper year for a 3-year period; and (iii) quality o f service requirements are explicit. The Bank and ECTEL are conducting a "best practices" study to explore potential activities that could be candidates to receive funds from the USF. The OECS countries have agreed that the study should focus on the viability o f providing broadband connectivity to public institutions (schools, training centers, public libraries and post offices) in order to facilitate or promote widespread public access to the Internet, and, inthe future, to e-government services. The results of this study should assist OECS countries in their efforts to develop and implement more effective, targeted and sustainable universal access programs, including possible access to telecommunications submarine cable infrastructure. Total cost: US$l,000,000. Component3 -Informationand CommunicationTechnologies(ICT): US$1,030,000 The objective o f this component is to improve growth and competitiveness in ICT-enabled services through utilization o f broadband infrastructure. It includes consulting services to identify policies as well as pilot projects with a particular focus on regional initiatives. 3.1I Extending the use of broadband applications by governments and theprivate sector The objective o f this subcomponent is to identify the regulatory infrastructure required to move the ICT Agenda o f each o f the countries forward and design a pilot scheme to encourage regional use of broadband. This subcomponent will be based on the identification o f the policies required for facilitating the development o f broadband applications. It includes the following key activities: (a) identifying policies required to facilitate the development o f broadband applications and infrastructure, and drafting appropriate regulations that would give effect to these policies; (b) elaborating and recommending a common information systems architecture and standards for the Member States and viable mechanism by which complex information systems can be supported and maintained (e.g., using remote applications via broadband systems); and (c) designing pilot projects to encourage regional use o f broadband technologies. Total cost US$605,000. 3.2. -ICTPilot Projects The objective o f this subcomponent is to implement up to five pilot projects that demonstrate the viability and business case for I C T and showcases the application o f ICT using broadband connectivity, following the design activities in subcomponent 3.1. There will be a focus on regional initiatives that would enable exploitation o f broadband connectivity to improve productivity and employment creation. The subcomponent will also support consulting services to implement the pilot. Total cost US$ 325,000 --including a) Equipment: US$250,000, and (b) consultancy: US$ 75,000. 3.3. Alternative communication technologiesfor Radio SpectrumMonitoring System (RSMS) This activity would establish an alternative telecommunications system to transfer data from the RSMS to ECTEL andthe five NTRCs through the use o f alternative technology for the provision o f more reliable communication and lower recurrent cost while maintaining international and 36 domestic links using the incumbent telephone network. This component builds upon the past RSMS system that is being satisfactorily implementedbyECTEL. Total cost US$I00,000. Component4 -ProjectManagement:US$245,000 The objective o f this component is to provide administrative support to the project by providing complementary resources. The goal i s make sure the project management function i s adequately staffed with the rights skills. 4.1 Support to Project Administration This subcomponent would provide resources to support project administration capacity within ECTEL. A dedicated person would be hired for the duration o f the project. This person would have project management, procurement, financial management skills, as well as technical skills. Total cost: US$200,000. 4.2 Audit This activity wouldprovide fbnding for project audits. Total cost: US$45,000. 37 Annex 5: ProjectCosts TelecommunicationsandICT DevelopmentProject (with contingencies) Local Foreign Total Project Cost By Component andor Activity U S $million U S $million U S $million 1, SUPPORT FORLEGALAND REGULATORY REFORMS 0.15 0.61 0.76 1.1TelecommunicationsAct andRegulations 0.02 0.08 0.10 1.2 RegionalForumfor Consensus Building 0.03 0.10 0.13 1.3 Alternative DisputesResolution (ADR) CapacityBuilding 0.02 0.08 0.10 1.4 Development ofpro-competitive PoliciesandProcedures 0.04 0.18 0.22 1.5 Regional Collaboration, Training, andResourceand Information 0.04 0.17 0.21 Sharing 2. UNIVERSALACCESS 0.22 0.89 1.12 2.1 UniversalService Guidelines(USG) 0.03 0.11 0.14 2.2 Implementation Support 0.02 0.09 0.11 2.3 Universal Service Fund(USF) 0.17 0.70 0.87 3. ICT 0.18 0.74 0.92 3.1 Extending use ofbroadbandapplications 0.11 0.44 0.55 3.2 a) ICT Pilot Projects: Equipments 0.04 0.17 0.22 3.2 b) ICT Pilot Projects: Consulting 0.01 0.05 0.07 3.3 Alternative communicationtechnologies for RSMS 0.02 0.07 0.09 4. PROJECT MANAGEMENT 0.05 0.18 0.23 4.1 Project Administration 0.04 0.15 0.19 4.2 Audit 0.01 0.03 0.04 TotalBaseline Cost 0.61 2.42 3.03 PhysicalContingencies 0.01 0.04 0.05 Price Contingencies 0.06 0.25 0.31 Total Project Costs' 0.68 2.71 3.39 Front-endFee 0.01 Total FinancingRequired 3.40 'Identifiable taxes andduties are 0 (US$m.)andthe total project cost, net o f taxes, i s 3.40 (US$m.). Therefore, the share o fproject cost net o ftaxes is 100%. 38 Annex 6: ImplementationArrangements TelecommunicationsandICT DevelopmentProject The implementation of the project will be the responsibility o f ECTEL given the experience it has acquired duringthe Bank's recently closedTelecommunications ReformProject. In accordance with a decision made by the OECS Heads o f Government, ECTELwill be responsible for executing the project. The Borrowers will designate at least two individuals inECTEL to represent each o fthe respective borrowers for the purpose o f using and withdrawing loan and credit proceeds. The position o f these persons may include Managing Director, Director o f Technical Services andor Accountant. ECTELwill carry out the procurement o f all Bank-financed goods and services under this project; operate the financial management system accordingto World Bank requirements (including management o f disbursement o f all World Bank loan proceeds, monitoring availability o f Government's counterpart contribution to the project, monitoring implementation progress o f project components, andwork to prepare semi-annual progress reports inaccordance with a project progress reporting format acceptable to the Bank). Annual audits are to be arranged and carried out byprofessional auditors accordingto Bank and Government requirements and agreements. The Bankwill reviewECTEL's progress reports, make sure that there are adequate resources and staffing to meet the challenges o fimplementation, andprovide assistance to ECTEL should achievement o fproject development objectives become imperiledbypolicy changes, institutional issues, or other unforeseen changes. The Bank will make occasional field visits to participating countries to meet with beneficiaries andto assure implementation effectiveness on the ground. A mid-term review (about 24 months from the date o f effectiveness) will be carried out to evaluate progress o f implementation against plannedobjectives. ECTEL will prepare and submit a project completion report within six months to loan closing. 39 Annex 7: FinancialManagementandDisbursementArrangements TelecommunicationsandICT DevelopmentProject Overallconclusion The major risk area lies in the Universal Service Fundthat will provide grants to private sector firms. The mechanisms have not been defined yet. But the risk i s considered moderate, as the project will support the development o f guidelines for which the approved o f ECTEL, the NTRCs, and the Bank is required. This will ensure that potential risks are adequately addressed. The preparation o f detailed procedures for the management o f the Fund satisfactory to the Bank will be a disbursement condition for the financing o f specific projects under the Universal Service Fund. These procedures will define the scope o f the Universal Service Fund, the selection criteria and processes, the Fund management, including financing and performance monitoring mechanisms. ECTEL will have the financial management responsibility o f the project. Its financial management i s found to be globally satisfactory. But it needs to be adapted to the current context to meet ECTEL statutory requirements to prepare its own financial statements (as an entity) and the requirements o f the new project. As o f now, ECTEL financial management system is shaped around the needs o f the OECS Telecommunications Reform Project. It needs now to be elevated to a level where it can meet both ECTEL's statutory requirement and the need to ensure the project's financial management. ECTEL has already been implementing measures including customizing the financial management software and preparing a new financial policy and procedures manual, which has just been approved by its Board. The manual has been reviewed and considered to be satisfactory subject to minor changes to include procedures more specific to the project, It is expected that the remaining actions to be implemented, consisting o f finalizing the customization o f the software and the hiring o f the project auditor, can be completed soon. They are considered as effectiveness conditions. Summary of the project design Project objective and activities. The overall development objective o f the Telecommunications and ICT Development Project is to improve the access, quality and use o f telecommunications and ICT services to achieve socio-economic development in the OECS. This objective will be achievedthrough the implementation o f the four components specified inthe PAD. The implementation o f the project is relatively simple given its small size (US$ 3.4 million) and the nature o f its activities, consisting mainly o f consultant services and the procurement o f a limited number o f goods. The only activity o f the project that is relatively specific i s the Universal Service Fund(US$l. 1million), representing about a third o f the total project costs. Implementation arrangements. The Telecommunications and ICT Development Project will more or less follow the implementation arrangements o f the recently closed OECS Telecommunications Reform Project. The same implementing entity, ECTEL, will be used. ECTEL will be responsible for the execution o f the project, including financial management. ECTEL was established, as part o f the OECS Telecommunication Reform Project, by five country members o f the OECS as a regional telecommunications regulatory authority. It has 41 managed successfully the implementation o f the Telecommunications Reform Project, including the financial management aspects. ECTEL has a well-defined organizational structure and administration (see chart inAnnex 6). Its Managing Director reports to a Board o f Directors. The Treaty that established ECTEL requires specifically that: (a) ECTELprepare for each year the general budget and any special budgets for approval by the Board which shall then be submitted to the Council for consideration and adoption; (b) all expenses o f ECTEL be approved in respect o f each financial year by the Council and shall be chargeable to the general budget or to a special budget; and (c) The Council appoint an External Auditor to submit to it an annual audit report which includes a financial and management audit o f ECTELand the ECTEL Fund. Financial management and disbursement. ECTEL, through its accounting unit, will have overall responsibility o f the project financial management. It will maintain the project's accounts, manage disbursements, prepare the required financial reports and coordinate the financial audit. Flow of funds. The project will finance a limited number o f contracts for goods and consulting services and most of them will be international, The amount o f local expenditures i s relatively small and can be pre-financed by ECTEL. On this basis, and as agreed with ECTEL, there is no specific need to use a special account for the project. ECTEL will pre-finance and get reimbursed for local expenditures incurred and contract payments under US$ 20,000 and will submit to the Bank direct payment requests for international contracts. This mechanism, which was also used in the implementation of the OECS Telecommunications Reform Project, will simplify the disbursement processes given the large number o f financing agreements involved and their respective small amount. Financial reporting. As required by World Bank's policy, ECTEL will prepare financial monitoring reports (FMR) and annual financial statements for the project, in addition to its own annual financial statements following international accounting standards. To align the financial monitoring reporting with the regular activity reporting o f ECTEL, the FMRwill be preparedon a semi-annual basis as part o fthe semi-annual project progress reports that will provide more detailed information on progress and implementation issues. The FMR will be submitted not later than 45 days after the end o f ECTEL's semi-annual financial reporting period. Given the nature o f the activities, it was agreed that there i s no need to have specific tables on physical progress monitoring in the FMR. The semi-annually progress report will be more detailed on the activities implemented and how they compare to the activities plannedalong with possible implementation issues. The financial part o fthe FMRwill consist o f a statement o f sources and uses o f funds, and a statement o f uses o f funds by activity. The procurement part o f the FMR will include the updated procurement plan and information on contract management. The annual financial statements for the project to be audited will consist o f the statement o f sources and uses o f funds and the statements o f uses o f funds by activity showing the transactions for the year and cumulatively since the beginning o f the project. 42 Auditing. ECTEL has submitted all annual financial audit reports required during the implementation o f the OECS Telecommunications Reform Project. The audit opinion inall these reports was unqualified and the quality o f the audit reports was found to be satisfactory by the Bank. But the reports were received with a few months late. Under the proposed project, an independent private sector audit firm will audit annually the project financial statements. This audit will be performed in accordance with intemational standards on auditing. The project annual audit report will be required to be submitted to the Bank no later than four months following the end o f ECTEL fiscal year. The first audit report to be submitted will cover financial statements for the period from effectiveness to the end o f the second fiscal year (up to 18 months). As noted above, the ECTEL Treaty indicates that the Council shall appoint an External Auditor to submit to it an annual audit report, which includes a financial, and management audit o f ECTEL and the ECTEL Fund. This requirement has not been fulfilled yet. As ECTEL will start preparingits own financial statements, it will be necessary that an Extemal Auditor be appointed to audit them. ECTEL will be required to submit to the Bank a copy o f its audited financial statement along with the audit report. At the request o f ECTEL's management, the project and ECTEL's financial statements will be audited by separate auditors. Financialmanagementassessment ECTEL's accounting unit has already demonstrated adequate capacity, as shown during the implementation o f the OECS Telecommunications Reform Project through: (a) the current financial management system, which was used for the OECS Telecommunications Reform Project; (b) ECTEL accountant's experience inproject financial management gained through the implementation o f the OECS Telecommunications Reform Project; (c) the existence o f a Financial Policy and Procedures Manual. This capacity, along with the satisfactory regular financial audits, meets the Bank's financial management requirements. But the context for the implementation o f the proposed Telecommunications and I C T Development Project i s different from the previous project inthe sense that the previous financial management system was set up mainly for the needs o f the project because o f the overlap between the project's and ECTEL's activities. As ECTEL is now well established as an autonomous entity, its financial management system must also reflect the scope o f its own activities, and not just that o f a project. To address . this issue, ECTEL has already taken measures to upgrade its overall financial management system, including: Customizing the financial management software to meet the financial management needs o f ECTEL as an entity, allowing ECTEL to keep accounting records o f its own and . prepare its financial statements following private sector practices, and at the same time, meet the accounting requirements o fthe project. Preparinga new Financial PolicyandProcedures Manual. For the customization o f the financial management software, it was agreed that ECTELwould create two separate accounting entities (ECTEL and the Project). A chart o f account and reporting format will be developed for each reflecting the respective operations. The new FinancialPolicy andProcedures Manual havebeenapproved by ECTEL's Board. Duringproject preparation, it was recommendedthat while addressing mainlythe needs o f ECTEL it would also make provision for project management to avoid the needto prepare a 43 separate manual only for the project. The Manual has already been reviewed and found satisfactory bythe Bank subject to minor changes to address the specific needs o fproject management. Significant risks Given past experience, existing financial management and the nature o f the project, no significant financial management risks have been identified. The major risk area lies in the Universal Service Fund that will provide a one-time grant to competitively selected private sector firms. The mechanisms have not been defined yet, although this has been successfully undertaken in other countries. The risk i s considered moderate because the project will support the development o f specific procedures that will be approved by ECTEL, the NTRCs and the Bank, Approval o f these procedures by the Bank will be a condition o f disbursement o f the financing for the specific projects under the Universal Service Fund. This will ensure that potential risks are adequately addressed. Action plan To ensure that ECTEL financial management system i s hlly satisfactory, the following actions have to be implemented: . Finalize the customization o f the financial management software through the . development o f a chart o f account and the reporting format for both the project and ECTEL (effectiveness condition); Hire an independent private auditor satisfactory to the Bank in accordance with terms o f reference satisfactory to Bank (to be completed no later than six month after effectiveness); and Development o f procedures acceptable to the Bank for the management o f the Universal Service Fund, including scope o f the Fund, selection criteria, financing and performance monitoring mechanisms (disbursement condition for subcomponent 2.3). Relevant issues to be included in the legal documents The usual financial covenants will be included inthe legal documents inadditionto the conditions mentioned above. Interest and charges on the loan andcredit where applicable will be payable every April 15thand October 15th for the duration o f the loan. A covenant applicableto project implementation for sub-component 2.3 "Support for Universal Service Fund", will require as a prerequisite the preparation o fUniversal Service Guidelines acceptable to the Bank to any disbursement under this sub-component. Plansfor supervision of thefinancial management aspects of theproject. GivenECTEL's experience inproject financial management andthe nature o fthe project, frequent financial management supervision i s not needed. A first supervision mission should be done duringthe first six months o f implementation to ensure that the financial management system operates effectively andmeet the needs o f both the project andECTEL. Thereafter, unless major issues arise, a yearly supervision would be done to monitor the overall financial management o fthe project. The semi-annually progress report including the FMR andthe annual audit reports will also be reviewed and comments will be sent to ECTEL to address any issue identified. 44 Annex 8: ProcurementArrangements TelecommunicationsandICT DevelopmentProject 8.1 ProcurementArranpements Procurement for the proposedproject would be carried out inaccordance with the World Bank's "Guidelines: ProcurementUnder IBRDLoans and IDA Credits" dated May 2004 and "Guidelines: Selection andEmployment o f Consultants by World BankBorrowers" dated M a y 2004, and the provisions stipulatedinthe Legal Agreements. The general description o fvarious itemsunderdifferent expenditure category is described below. For each contract to be financed bythe Loadcredit, theprocurementmethods or consultant selection methods, the need for pre- qualification, estimated costs, prior review requirements, andtime frame as agreed between the Borrower andthe Bankproject team are laid out inthe Procurement Plan. The Procurement Plan will be updated at least annually or as requiredto reflect the actual project implementation needs. 8.2 Procurementmethods: The methodsto beused for the procurement described below, andthe estimated amounts for eachmethod, are summarized inTable A andA1, The threshold contract values for the use o f each method are fixed inTable B. 8.2.1 Procurementof Goods Goods procured under this project would include (a) establishing andproviding a one- time subsidyto the Universal Service Fund(USF)that will stimulate private investment inexpandingaccessto advanced ICTs for under-served communities andfacilities, (b) establishing Pilots for broadband applications, and (c) acquiring off-the-shelf equipment usingalternative technologies to monitor the radio spectrum. These will beprocured underBOO/BOT/BOOT, concessions andsimilar private sector (ICB) and Shopping procedures respectively. To the extent possible contracts for these goods will be grouped into biddingpackages o f more thanUS$ 150,000. These goods are estimated to total about US$1.35 million equivalent andwould be procured following I C B procedures, usingBank-issued StandardBiddingDocuments (SBDs). Contracts below US$150,000 but above US$50,000 maybeprocuredunder National Competitive Bidding,using biddingdocuments acceptable to the Bank. Contracts for goods estimated to cost US$50,000 or less per contract, may be procured usingshopping procedures based on a model request for quotations satisfactory to the Bank. Giventhe nature o f goods to be procured for alternative communications technologies for the radio spectrum monitoring system estimated at US$lOO,OOO, on an exceptional basis will also be procured using shoppingprocedures. 8.2.2 Selectionof Consultants Under this project, consulting services will be contracted normally inthe following areas o f expertise: telecommunications regulations; universal access, project management, audit and training. These services are estimated to total about US$2.04 million equivalent andwould beprocured usingBank Standard Request for Proposals (RFP) when hiring firms. 45 Firms All contracts for firms wouldbeprocuredusingQuality and Cost-Based Selection (QCBS), except for small and simple contracts estimated to cost US$200,000 equivalent or less that would be procuredusingother methods such as Consultants Qualifications (CQ), Single-Source Selection (SSS), always with the Bank's prior review regardless o f the amount, Selectionunder a FixedBudget (FBS) and Least-Cost Selection (LCS). Contracts for auditing services will beprocured following Single-Source Selection since ECTELhiredthe firm competitively and has provided satisfactory services under the World Bank financed TelecommunicationsReform Project that closed on December 31, 2004. Individuals Specialized advisory services would beprovided by individual consultants selected by comparisons o f qualifications o f at least three candidates and hiredinaccordance with the provisions o fparagraph 5.1 through 5.4 o fthe Consultant Guidelines. Inexceptionalcases, single-source contractingmaybeusedwiththeprevious agreement of the Bank andinaccordance with the provision ofparagraph 5.4 o f the consultants Guidelines. 8.2.3 Procurementdocuments The SBDs andthe procurement procedures to be used for eachprocurement method, as well as model contracts for goods procured, are presented inthe Project Operational Manual (POM). 8.3 PriorReview Thresholds Theproposed thresholds for prior review are based onthe procurement capacity assessment o f ECTEL and are summarized inTable B. 8.4 Assessment of the Agency's capacityto implementprocurement Procurement activities o f the project will be carried out by ECTEL. ECTEL has demonstrated satisfactory competence in World Bank procurement through its implementation o f the Telecommunications Reform Project that involved procurement o f large goods, consultants' services and training. ECTEL is staffed by the Managing Director, Director o f Technical Services, Accountant, Technical experts, and the procurement function is presently staffed by the Accountant, the Director o f Technical Services and Technical experts. This assessment determined that in general sufficient qualified staffs are available to carry out the normal procurement tasks that would be assigned to them. Existing staffs have relevant knowledge o f the disciplines and the capacity required for carrying out the proposed procurement plan under the project. To help integrate activities, budgets, outputs and outcomes, and implementation schedules under the project, hiring o f a project manager i s proposed in the Action Plan and has been agreed uponby ECTEL. The Administrator is to be hired byproject effectiveness. 46 A World Bank Procurement Specialist has carried out anassessmento fECTEL's capacity to implement procurement actions for the project. ECTELhas the institutional capacity to carry out the project. The key issues andrisks concerningprocurement during implementationo f the project have been identified andinclude: 6) Procurement i s not a specialized task within the Directorate. However, there i s some staff with procurement experience. (ii) All staffs havejob descriptions. The requirements for procurement are included, as appropriate, inthejob descriptions o f each o f the key staff; (iii) All ECTELstaffhasbeenselected competitively. The Accountant and Director o f Technical Services have received training from a Senior Procurement Officer supplemented by in-house training by the World Bank's Procurement Specialist. This training has enhanced procurement processes. (4 All auditing arrangements seem to be in place and suitably established. An external auditor audits the project annually. The Managing Director (MD) reviews the drafi audit report. (vi> The scope o fthe audit and the choice o f the auditor are subject to prior review and no objection from the MD. The audit i s independent, and all recommendations are implemented. Inconsiderationofthe present capabilities withinECTELandpastexperience implementinga World Bank project, the proposedrisk rating is "average". An appropriate actionplan, however, would be necessary to mitigate such risks and strengthen the performance o f ECTEL. Agreed uponcorrective measures are provided inthe Action Planbelow. 8.4.1 ActionPlan The following actionplanis proposed to mitigate the average risk assessment. IA) CapacityEnhancement: I I I 1,Adding Capacity:Hiringa project manager with ECTEL experience inprocurement and World Bankproject implementationprocedures, along with other appropriate technical skills to implement the project. ProcurementTraining 2. Procurement Training will beprovidedbyBank Bank Project Launch and staff duringproject launchworkshop andduring Supervision supervision. missions Enhancedplanningand controllingmechanisms 47 Proposed CompletionDate 3. Preparationby ECTEL o f a detailedprocurement ECTEL Agreement on plan for the first 18 months o f implementation. Procurement Plan Draft due by appraisal. Finalplanto be agreed by (PP) will be negotiations. reached during negotiations. PP will bemonitored I andupdated annually or as the projects evolves 4. Procurement documents for the first 18 months ECTEL ByApril 30,2005 activities should be prepared and ready for the start o fproject implementation. 5. Establishment o f a procurement filing system ECTEL ByEffectiveness satisfactory to the Bank. 6. Preparation o f a draft financial polices and ECTEL Due for review procedures manual with a specific section on before negotiations. procurement detailing all the procedures and Final to be channels o f responsibilities and flow o f approvedby documentation. Effectiveness 7. Procurement supervisionwill be conducted every Bank During year andthe procurement planwill be monitored on Implementation an on-going basis. 8. A draft Project Operational Manual (POM) will ECTEL Prior to be developed and disseminated to all project team Negotiations members after clearance by the Bank as a condition o fnegotiation. This manual will contain a section on procurement which will cover at least the following issues: 0 roles andresponsibilities o fparties involved in the procurement process 0 all agreed procurementprocedures applicable to the Project 0 agreed requirements andprocedures for procurementplanningand execution o f the contracts with a time bound implementation plan 0 procurement audit andreview system (external, byProject, internally withinthe organizationo f the units, or by the Bank) 0 legal advice system 48 Proposed Completion Date 0 standard documents, TORs 0 procedures on recording andresolution o f complaint, and 0 procurement reporting system. 9. Format for the procurement report (as part o fthe ECTEL Prior to POMagreedwith the Bank) shouldbe developed Negotiations and well understood prior to negotiations. This report should include at least the following areas: procurement planvs. actual, procurement issues, reasons for the procurement delays, procurement complaint database and its resolutions, and a check list o f any preparations required by ECTELto respond to the Bank's regular supervision missions. The sample format acceptable to the Bank shouldbe attached to the POM. 10. Cases o f collusion and other fraudulent and ECTEL/Bank DuringProject corrupt practices will be reported and investigatedby Implementation the Borrower andthe Bank andremedial actions will be taken. B) Prior Review Threshold and SuDervision Plan 11. Prior Review: Bank Confirmed at 0 Goods: All goods procured following ICB above Negotiations US$ 150,000; and contract for Alternative communications technologies for the radio spectrum monitoring system estimated at US$lOO,OOO following shoppingprocedures. 0 Consultant Services: US$200,000 equivalent or more (firms-QCBS) andbelow US$200,000 first three contracts and only TORs for rest o f the contracts. US$ 100,000 equivalent or more (individuals), TORs for all contracts. 12. The supervision planwill include for the Bank to carry out an ex-post review annually to cover at least a sample o f about 18%o f contracts implementedin that period. The following issues will be regularly addressed duringsupervision: (1) the capacity and capability o fthe project staff inimplementing procurement, (2) the level o f enforcement o f the agreed procedures and documents, and (3) the effectiveness o f the implementing agency insolving procurement problems, including complaint 49 resolutions. The ex-post review will also include the assessment o f the effectiveness o f the Borrower's monitoring and supervision with respect to procurement. 8.5 ProcurementPlan ECTEL's draft procurement planfor project implementationprovides the basis for the aggregate amounts for the procurement methods (see Table A). It covers the initial 18 months o fthe project. The use o fthe methods defined inthe Planis mandatory. This planwill be agreed betweenthe Borrower andthe Bank Project Team duringnegotiations andwill also be available inthe project files andintheBank's externalwebsite after Board approval. At the beginningof each calendar year or whenever requiredunder Appendix Io fthe Bank's Guidelines, ECTEL will update the ProcurementPlaninagreement with the Project Team annually or as requiredto reflect the actualproject implementationneeds. 8.6 Frequencyof ProcurementSupervision Inadditionto the prior review supervisionto becarriedout from Bank headquarters, the capacity assessment o fthe Implementing Agency recommends that the first supervision missionbe carried out six months after starting o f implementation and once every year thereafter to carry out post-review o fprocurement actions. A procurement audit should be carried out every year. Based on the overall "average'' risk assessment the post-review field analysis should cover at least a sample o f about 18 percent o f contracts implementedinthat period. 50 8.6.1 Detailsof the ProcurementPackageswith MethodsandTime Schedule (a) Goods andNonConsultingServices Universal 1.oo ICB No No Prior 05/17/06 Service Fund ICT Pilot 0.25 Shopping No No Post 04/22/07 Projects (5 packages) 3.3 Off-the- 0.10 Shopping No No Prior 06/21/05 shelf equipmen t related 1to radio spectrum (b) ConsultancyAssignments with SelectionMethods 1.1 Telecommunic 0.11 IC Prior 6/28/05 ations Act and Regulations 1.2 Regional 0.14 Prior 9/1/05 Forum for Consensus Building 1.3 Alternative 0.11 Prior 6/22/05 Dispute Resolution Capacity 51 Building 1.4 Development 0.25 QCBS Prior 08/30/05 o fPro- Competition Policies and Procedures 1.5 Training 0.24 Review Yearly Training Plan. 2.1 Universal 0.15 Prior 8/6/05 Service Guidelinesand Regulations 2.2 Implementatio 0.12 Prior 7/26/05 nSupport Specialist 3.1 Extending the 0.61 QCBS Prior use of broadband applications 3.2. b) ICT Pilot 0.08 I C Prior Project 4.1 Project 0.20 IC Prior 8/05/05 Administration I 4.2 Audit 0.05 sss Post 7/28/05 52 8.7 ProcurementTables Table A: ProjectCosts by ProcurementArrangements Expenditure Category ProcurementMethod Total Cost (including contingencies) ICB I NCB I Other I N.B.F Goods Consultant Services (1-44) (1.44) Training Total 3.39 (0.80) l.O i i(2.71) ~ Note: N.B.F=Not Bank-financed(includes elements procured under parallelco-financing procedures, consultancies under trust funds, any reservedprocurement and any other miscellaneous items). Figures in parenthesis are the amounts to be financed by the Bank loadIDA credit. Table A1:ConsultantSelectionArrangements (inUS$million equivalent) ConsultantServices SelectionMethod I I Totalcost ExpenditureCategory QCBS QBS SFB LCS CQ 1 1 I I I Other I N.B.F I III ~ Firms 0.85 0.05 (0.68) I1 I1 ;;:2) (0.04) (1-04) l S 3 O ~ ~ Individuals (0.40) OSO Total 0.85 I I I I 0.40 10.55 (0.68) (0.32) (0.44) (1.44) lAO Note: QCBS = Quality and :est-Based Selection QBS = Quality-based Selection SFB = Selection under a FixedBudget LCS =Least-Cost Selection CQ = Selection Basedon Consultants' Qualifications N.B.F. =Not Bank-financed. Other = Selection of individual consultants (per Section V of Consultants Guidelines), Commercial Practices, etc. Figures inparenthesis are the amounts to be financed by the Bank loanADA credit. 53 TableB: Thresholdsfor ProcurementMethodsandPrior Review (US$'OOO) I 1. Goods I I I I >150 ICB All >50<150 NCB None ~ >50<100 ThreeQuotations All 4 0 Three Quotations None 2. Consultants Firms >200 QCBS All <200 Irrespectiveof Firstthree contractsandonly method TOR for other contracts Individuals >loo Annex 5 of All Guidelines 4 0 0 Annex 5 of TOR only Guidelines 3. Training Yearlytrainingplan Table C: AllocationofLoan/CreditProceeds' (US$) ExpenditureCategory Amount FinancingPercentage 1. Goods 243,480 100% 2. Goods -USF (sub-component 2.3) 695,650 100% 3. Consultants' Services 1,309,100 85% 4. Training 170,910 100% 5. Front-end fee 6,805 6. Unallocated 288,860 Total 2,714.805 'The description o f the expenditure category as defined inthe Loanand Credit Agreement 54 Table C1: AllocationofLoadcredit Proceedsper Country Dominica 1. Goods 48,696 35,965 100% 2. Goods - USF 139,130 102,755 100% 3. Consultants 261,820 193,368 85% 4. Training 34,182 25,245 100% 5. Front-end fee 0 0 6. Unallocated 57,772 42,667 Total 541,600 400,000 Grenada 1. Goods 24,348 24,348 17,982 100% 2. Goods - USF 69,565 69,565 51,377 100% 3. Consultants 130,910 130,910 96,684 85% 4. Training 17,091 17,091 12,623 100% 5. Front-end fee 1,36 1 0 0 6. Unallocated 28,886 28,886 21,334 Total 272,161 270,800 200,000 St. Kitts &Nevis. 1. Goods 48,696 100% 2. Goods - USF 139,130 100% 3. Consultants 261,820 85% 4. Training 34,182 100% 5. Front-end fee 2,722 6. Unallocated 57,772 Total 544,322 Saint Lucia 1. Goods 24,348 24,348 17,982 100% 2. Goods USF - 69,565 69,565 51,377 100% 3. Consultants 130,910 130,910 96,684 85% 4. Training 17,091 17,091 12,623 100% 5. Front-end fee 1,36 1 0 0 6. Unallocated 28,886 28,886 21,334 Total 272,161 270,800 200,000 St. Vincent & the Grenadines. 1. Goods 24,348 24,348 17,982 100% 2. Goods - USF 69,565 69,565 51,377 100% 3. Consultants 130,910 130,910 96,684 85% . 4. Training 17,091 17,09 1 12,623 100% 5. Front-end fee 1,36 1 0 0 6. Unallocated 28,886 28,886 21,334 Total 272,161 270,800 200,000 GrandTotal 1,360,805 1,354,000 1,000,000 55 Annex 9: EconomicandFinancialAnalysis TelecommunicationsandICT DevelopmentProject Economic Analysis As a technical assistance project, precise economic benefits are difficult to quantify. However, for some components, orders o fmagnitude o fpotentialbenefits can be estimated. As indicated in a recent Bank report" on growth and competitiveness issues in the OECS, improving access and quality andreducing costs o ftelecommunication services will be critical to stimulate growth and improve competitiveness not only in ICT activities but also in emerging clusters of other services (e.g., niche tourism, offshore education, and offshore financial services). The provision o f basic telecommunication services will also improve the provision o f public services to the population and strengthen the broader functioning o f the public sector. For the regulatory reform components, worldwide evidence suggests the importance of a successful and sustained regulatory institution to increasing access, improving quality and lowering costs. While the Telecommunications Reform Project took the first steps towards this goal, this project will extend andconsolidate the gains made. Internationalevidence suggests that movingtowards fully competitive, well-regulated markets from monopoly markets can reduce prices by 15 to 30 percent. Assuming that prices for telecommunications service inthe ECTEL countries fall only an additional five percent as a direct result o f the consolidation and expansion o f regulatory capacity under this project, there will be a significant economic impact. Based on estimates o f consumer surplus and net consumer savings from price declines under the Telecommunications Reform Project, a further five percent reduction of prices will create consumer surplus and savings worth $3 milliodyear across the reform countries.12 This suggests the reform component alone will gamer very higheconomic returns for the project as a whole. For the universal access components, cross-country evidence suggests considerable consumer surplus from access to ICTs. These direct impacts that can be estimated are likely to be outweighed by impacts that are more difficult to estimate. The improved range and quality o f ICT services that will be available at lower cost as a result o f this project will provide increased access to intemational markets and create new export opportunities, especially in the service sector. There is considerable evidence that developing countries which see more Intemet use generate more exports than countries with limited Intemet use.13 The project will also have a, significant social impact -equalizing the opportunity to benefit from ICTs for presently excluded groups and easing the ability to communicate with friends and family in the region and around the world. For the component aiming at extending the use o f broadband applications, advanced information OECS: Towards a New Agenda for Growth, World Bank, 2005. The original project was associated witha weighted average reduction oftelecommunications charges ofabout 34 percent over the 1998-2003 period, estimated to be worth $US20minconsumer surplus and savings. l3one-percentagepointincreaseintheshareofthepopulationwithaccesstotheInternetwouldincreasetotal A exports as percent o f GDP by 1.4 percentage points and would increase exports to high-income countries by 1.3 percentage points (G. Clarke and S. Wallsten, 2004 Has The Intemet Increased Trade? Evidence from Industrial and Developing Countries, World Bank Policy ResearchWorking Paper 3215). 56 systems have wide-ranging applications in health care, education and the provision o f other government services, as wells as a number o f other uses o f advanced networking in govemment service provision have garnered significant economic returns. Piloting such initiatives may lead to considerable efficiencies in the provision o f government services. The use o f alternative technologies subcomponent will save 30% o f the recurrent communication costs between ECTEL and the NTRCs. These savings are expected to pay for investment costs after 16 months. Financial Analysis As a technical assistance loan, the activities envisaged under the project for support are not investments designed to generate significant financial returns to the implementing agencies. Even so, the financial sustainability o f certain components should be addressed. 0 Expanded ongoing activities under ECTEL and the NTRCs, including the regional forum, procedures related to universal access, interconnection, tariffs and spectrum management. These may require additional budget for the regulatorybodies andECTEL. This might involve additional specialist staff. Some additionalbudgetary resources maybe required as a result o f expanded regulatory activities, as the sector becomes increasingly attractive to investors. Iffee and license payments increased 1percent as a result o fnew investments, this would more thancover the cost o f additional staff. 0 The investmentsmade under the universal access regime shouldbe financially sustainable. This will be ensuredby capping access fundpayments for a particular access initiative at the capital cost o f equipment -ensuring that the runningcosts o fthe service provided under the fund can be met from revenues generated. 57 Annex 10: SafeguardPolicyIssues TelecommunicationsandICT DevelopmentProject Not applicable. 58 Annex 11:ProjectPreparationand Supervision TelecommunicationsandICT DevelopmentProject PCNreview 0211612004 0211712004 Initial PID to PIC 0511012004 InitialISDS to PIC 0511112004 Appraisal 0111412005 0111412005 Negotiations 0311812005 0411112005 Board/RVPapproval 05/12/2005 Planneddate of effectiveness 0713112005 Planneddate of mid-termreview 0910112007 Plannedcompletiondate 0613012009 Plannedclosingdate 1213112009 Key institutionsresponsiblefor preparationofthe project: 0 The Eastem Caribbean Telecommunication Authority (ECTEL) 0 The ECTEL Council ofMinisters 0 The National Telecommunication Regulatory Commissions (NTRCs) 0 The Organization o f Eastem Caribbean States (OECS) Secretariat. Bank staff andconsultantswho workedon the prqiectincluded: RobertSchware Task TeamLeader CITPO RitinSingh Co-taskTeam Leader CITPO BadrulHaque LeadCountry Officer LCC3C Camilla LampartNuamah , Senior Economist ECSPE CharlesKenny Senior Economist CITPO DavidGray Senior Knowledge Specialist LCRKM HilarionBruneau Senior FinanceOfficer LOAGl Kashmira Daruwalla Procurement Specialist CITPO Lisa Lui Senior LegalCounsel LEGLA Marta Priftis Senior ProgramAssistant CITPO MichelMaechler ICT Specialist CITPO 59 MoustaphaNdiaye Senior Financial Management Specialist LCOAA Bank funds expended to date onprojectpreparation(US$thousand): 1. Bank resources: 65.0 2. Trust funds: -5.1 3. Total: 70.1 Estimated Approval and Supervision costs (US$ thousand): 1. Remaining costs to approval: 46.0 2. Estimated annual supervisioncost: 87.0 60 Annex 12: Documentsinthe ProjectFile TelecommunicationsandICT DevelopmentProject A. Project Implementation Plan 0 Project Operational Manual 0 Terms of reference and scope of services for ECTEL's Managing Director, Director of Technical Services, andAccountant B. Bank Staff Assessments 0 Country Assistance Strategy (CAS) o fthe World Bank Group for the Eastem Caribbean Sub-Region (2001) 0 Project Appraisal Document, OECS Telecommunications ReformProject (1998) 0 Detailedproject costs and disbursementtables 0 Financial andProcurement capacity assessment of ECTEL (2005) C. Other 0 New Telecommunications Acts, OECS Telecommunications ReformProject participating countries (2000) 0 Towards an OECS Development Strategy, OECS Secretariat (2000) 0 ICT Assessments for Dominica, Grenada, St. Kitts andNevis, St. Lucia, and St. Vincent andthe Grenadines, CAR4NA Corporation (2002) 0 OECS ICT FinalPolicy Report, Pilot Project Proposals, and Investment Promotion Strategies, GOPA Consultants (2002) 0 U SAID ECTIC Project - Impact Assessment: ECTEL StatedOECS Telecommunications Liberalization Program (2004) 0 Price Caps Implementation Agreement between Cable andWireless andECTEL (July 30, 2004) 0 OECS: Towards aNew Agenda for Growth, World Bank (2005) 0 Draft design o f aUniversal Service Program for the Internet inthe OECS, World Bank (2005) 61 Annex 13: Statements of Loansand Credits Telecommunications& ICT DevelopmentProject DOMINICA Difference between expected and actual Original Amount inUS$Millions disbursements Project ID FY Purpose IBRD IDA SF GEF Cancel. Undisb. Orig. Frm. Rev'd PO77680 2002 Dominica-EmergencyRecoveryProject 0.96 2.24 0.00 0.00 0.00 1.06 0.58 0.00 Total: 0.96 2.24 0.00 0.00 0.00 1.06 0.58 0.00 STATEMENT OF IFC's HeldandDisbursedPortfolioInMillionsofUS Dollars ~~ Committed Disbursed IFC IFC FY Approval Company Loan Equity Quasi Partic. Loan Equity Quasi Partic. ~~ Total portfolio: 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Approvals PendingCommitment FY Approval Company Loan Equity Quasi Partic. Totalpendingcommitment: 0.00 0.00 0.00 0.00 62 Annex 13: Statementof Loansand Credits(cont.) Telecommunications& ICT DevelopmentProject GRENADA Difference between expected and actual Original Amount inUS$ Millions disbursements Project ID FY Purpose IBRD IDA SF GEF Cancel. Undisb. Orig. Fm. Rev'd PO92692 2005 GD (4APL) Hurricane IvanEmerg.Rec. 5.00 5.00 0.00 0.00 0.00 10.32 0.00 0.00 PO76715 2003 GD 2nd PhaseAPL HIV/AIDS 3.00 3.04 0.00 0.00 0.00 6.26 2.29 0.00 Prev.&Control PO77759 2003 GD EDUCATION DEV (2nd APL) 4.00 4.00 0.00 0.00 0.00 7.87 0.72 0.00 PO77682 2002 GrenadaEmergencyRecoveryProject 1.14 2.66 0.00 0.00 0.00 0.94 0.52 0.00 PO69922 2001 GD GrenadaDisasterManagement 5.06 5.01 0.00 0.00 0.00 1.61 1.68 0.00 Total: 18.20 19.71 0.00 0.00 0.00 27.00 5.21 0.00 STATEMENT OF IFC's HeldandDisbursedPortfolio InMillions ofUSDollars Committed Disbursed IFC IFC FY Auuroval Comuanv Loan Equitv Quasi Partic. Loan Equity Quasi Partic. 2002 Bel Air 1.oo 0.00 1.oo 0.00 1.oo 0.00 1.oo 0.00 Totalportfolio: 1.OO 0.00 1.oo 0.00 1.oo 0.00 1.oo 0.00 Approvals PendingCommitment FY Approval Company Loan Equity Quasi Partic Totalpendingcommitment: 0.00 0.00 0.00 0.00 63 Annex 13: Statementof LoansandCredits(cont.) Telecommunications& ICT DevelopmentProject ST. KITTS & NEVIS Difference between expected and actual Original Amount inUS$ Millions disbursements Project ID FY Purpose IBRD IDA SF GEF Cancel. Undisb. Orig. Frm. Rev'd PO76798 2003 KN:HIV/AIDS PREVENTIONAND 4.05 0.00 0.00 0.00 0.00 3.78 2.09 0.00 CONTROLPROJ PO75978 2002 60-KNEDUCATION (APLO1) 5.00 0.00 0.00 0.00 0.00 4.08 1.45 0.00 PO77684 2002 St. Kitts and Nevis EmergencyRecoveryP 4.40 0.00 0.00 0.00 0.00 1.55 I.55 1.06 Total: 13.45 0.00 0.00 0.00 0.00 9.41 5.09 1.06 STATEMENT OF IFC's HeldandDisbursedPortfolio InMillionsof USDollars Committed Disbursed IFC IFC FY Approval Company Loan Equity Quasi Partic. Loan Equity Quasi Partic. Totalportfolio: 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Approvals PendingCommitment FY Approval Company Loan Equity Quasi Partic. Total pendingcommitment: 0.00 0.00 0.00 0.00 64 Annex 13: Statementof Loans and Credits (cont.) Telecommunications& ICT DevelopmentProject ST. LUCIA Difference between expected and actual Original Amount inUS$Millions disbursements Project ID FY Purpose IBRD IDA SF GEF Cancel. Undisb. Orig. Frm.Rev'd PO76795 2005 LC HIV/AIDS PREVENTION & 3.20 1.60 0.00 0.00 0.00 6.68 0.32 0.00 CONTROL PO86469 2004 LC Disaster ManagementProject I1 3.70 3.77 0.00 0.00 0.00 7.00 -0.49 0.00 PO77712 2002 60 LC Education (AF'LOI) 6.00 6.00 0.00 0.00 0.00 12.81 6.38 0.00 PO77687 2002 St. Lucia EmergencyRecoveryProject 1.89 4.41 0.00 0.00 0.00 2.96 2.35 0.00 PO70244 2002 LC Water Sector ReformTechAssist 1.30 1.30 0.00 0.00 0.00 1.89 1.10 0.00 Total: 16.09 17.08 0.00 0.00 0.00 31.34 9.66 0.00 STATEMENT OF IFC's HeldandDisbursedPortfolio InMillionsofUSDollars Committed Disbursed IFC IFC FY Approval Company Loan Equity Quasi Partic. Loan Equity Quasi Partic. Totalportfolio: 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Approvals PendingCommitment FY Approval Company Loan Equity Quasi Partic. Totalpendingcommitment: 0.00 0.00 0.00 0.00 65 Annex 13: Statementof LoansandCredits (cont.) Telecommunications& ICT DevelopmentProject ST. VINCENT AND THE GRENADINES ~ ~~ Differencebetween expected and actual Original Amount inUS$Millions disbursements Project ID FY Purpose IBRD IDA SF GEF Cancel. Undisb. Orig. Fm. Rev'd PO76799 2005 VC HlV/AIDS PREVENTION I% 3.50 1.75 0.00 0.00 0.00 7.29 0.30 0.00 CONTROL PO86664 2004 60: VC EDUCATION (AF'L3) 3.10 3.10 0.00 0.00 0.00 6.49 0.75 0.00 PO69923 2002 VC DisasterManagement 3.00 2.91 0.00 0.00 0.00 5.15 4.25 0.00 PO76822 2002 St Vincent EmergencyRecoveryProject 0.96 2.24 0.00 0.00 0.00 1.45 0.99 0.00 Total: 10.56 10.00 0.00 0.00 0.00 20.38 6.29 0.00 STATEMENT OF IFC's HeldandDisbursedPortfolio InMillionsofUSDollars Committed Disbursed IFC IFC FY Approval Company Loan Equity Quasi Partic. Loan Equity Quasi Partic. Totalportfolio: 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Approvals PendingCommitment FY Approval Company Loan Equity Quasi Partic. Totalpendingcommitment: 0.00 0.00 0.00 0.00 66 Annex 14: Countriesat a Glance Telecommunications& ICT DevelopmentProject - Dominica Latin Upper- POVERTYand SOCIAL America middle- Dominica 8 Carib. income Developmentdiamond. 2003 Population, mid-year (millions) 0.07 534 335 GNI per caplta (Atlas method, US$) Lifeexpectancy 3,360 3,260 5,340 GNI (Atlas method, US$billions) 0.24 1,741 1,788 Average annual growth, 199793 Population I%) -0.1 1.6 1.3 Laborforce (%) 2.1 1.8 Gross per primary Most recent estimate (latestyear available, 199743) capitaGNI t+Lnroilment Poverty (% ofpopulationbelownationalpovertyline) 33 Urban populationI%oftotalpopulationl 72 77 76 Lifeexpectancyat birth(years) 77 71 73 Infant mortality(per 1,000livebirths) 13 28 19 Child malnutrition (% ofchildren under5) Accessto improvedwater source Access to an improvedwater source (% ofpopulation) 97 86 89 illiteracy(% ofpopulationage 75+) 11 9 Gross primary enrollment (% of SChCJ/-aQepopulation) 100 129 104 -Dominica Male 102 131 104 Female 97 126 104 KEY ECONOMICRATIOSand LONG-TERMTRENDS 1983 1993 2002 2003 Economlcratlos. GDP (US$billions) 0.08 0.20 0.26 0.26 Grossdomestic investmentlGDP 28.1 26.8 9.6 14.8 Exportsof goods and servicedGDP 41.1 48.6 46.6 43.1 Trade Gross nationalsavingslGDP 23.7 15.5 0.2 3.0 Current account balance/GDP -2.1 -11.3 -15.0 -16.9 Total debtlGDP 42.8 48.1 121.9 1220 Domestic savings Investment Indebtedness 1983-93 199393 2002 2003 200397 (averageannualgrowth) GDP 4.1 0.7 -4.7 0.0 -Dominica GDP percapita 4.5 0.9 -4.8 0.1 Exportsof goodsand services 7.3 0.8 12.8 -10.9 STRUCTUREof the ECONOMY 1983 1993 2002 2003 IGrowthof InvestmentandGDP(%) (% of GDP) 1 Agriculture 29.1 21.5 18.6 17.9 40 Industry 18.4 20.6 21.0 22.5 ': Manufacturing 7.8 8.2 7.9 7.8 Services 52.5 57.9 60.4 59.8 1: Private consumption 67.1 64.9 73.0 77.5 b o Generalgovernmentconsumption 24.2 20.7 23.0 20.3 Importsof goods and services 60.6 61.0 -GDI -GDP 1983-93 199343 (average annualQrowthJ Growthof exports and imports (%) Agriculture 1.7 -2.1 -0.7 -3.7 'OT I Industry 6.5 0.6 -10.3 1.7 i o Manufacturing 5.6 -0.5 -0.4 -1.8 Services 4.6 3.1 -4.0 37.2 Private consumption 3.4 2.6 -7.5 5.5 -lo Generalgovernmentconsumption 2.4 1.4 0.2 -12.3 .20 Gross domestic investment 5.1 -6.8 -52.6 35.0 -Exports -O-lmports Importsof goods and services 5.3 0.7 -8.6 -0.9 _ _ ~ ~~ Note:2003 data are preliminaryestimates *The diamondsshow four key indicatorsInthe country (in bold)comparedwith its incomegroup average. If data are missing,the diamondwill be incomplete. 67 Annex 14: Countriesat a Glance(cont.) Telecommunications& ICT DevelopmentProject ICT at a glance Dominica Latln Upper America middle Domlnlca 1Caribbean Income Country backgroundinformation 5 2002 2002 2002 Population,mid year (millions) 0 07 0 07 526 7 330.9 Poverty(% of population below 51 adayj Adult literaeyrate (% ages 15Sfidover) 89 5 93.1 Urban population (%of total pOpUlallOni 76 2 75.1 GNI per capita (Atlas mathod.ti 2,910 3.2800 5.040.0 GNI per caplta (PPP, $) 4,380 6,750 0 9,220.0 GDP growth (1990-95and 1995-2002, X) 1 2.0 2.5 Scientlstsand englneers in RBD (per mill. people) 286 8 837.9 Expendlturesfor RBD ICof GDP) 0 5 a.5 ICT infrastructure8 access 2001 2001 Mainlineshobites per 1.mPROPIS Telephone mainlines Per 1,000 people 163 201 sa In largest cltyfper 1,000people) 175 240 Walling llst (thousands) 43403 3,626 200 Revenueper line (S) a27 1,032 Cost of localcall (8per 3 mlnules) 0.09 0.09 Mobilephones (per 1,000 people) 160 253 100 lnternatlonaltelemmmunlcotlons Outgoingtrafflc (minutesper suhscrlber) 87 111 Cost of call to U S p per 3 minutes) 3.20 2.16 0 Daily newspapers lper 1,000PeOpleS 70 123 Radios(per 1,000 people) 410 466 Televislon sets lper 1,000 people) 274 308 Computers8 the Internet Personal computers Per 1,000 people Installedineducatlon (thousands) internet Users (thousands) Monthlyoff-peak access charges Sewlce providercharge ($1 Telephone usage charge($1 ICT expenditures 2001 2001 Total ICT (b.mlllions) ICT as 9- of GDP ICT per capita IS) ICT business& governmentenvironment (ratlngs from 1 to 7 7 IS txghestlbest) ZOO2 2002 Broadbandinternetaccess availability 4 0 4 2 Local speciallzedIT servlces gvaiiabllltV 4 5 4 9 CompetitionIn lSPs 4 0 3.7 Govemment mine sewices avallabillty 3.3 3.5 Laws relatingto ICT use 3 3 3 6 GovemmentpriorNizntionof ICT 3.4 4 6 Secure gewers 2.103 a 2,t2s a Notes Figuresin Lslics refer to an earler year a Dab referto 2001 Sources Countrybackgroundinformation,UNESCOand World Bank: ICT infrartnrcturoand eccess, ITUand UNESCO, Computersand tho Internet, ITU and WITS4 ICTexpenditures,WITSA ICT budinoss& governmentenvironmnf World Economc Forum's GlobalCompefhvenessReport BO2-2003 and Gbb.dlnfom8fm Technofogy Report 2002-2003 (Wings) andNetcraft(secureservers). See Definitansand Sources lor morecompleteinfarmation DevelopmentDab Group, World Bank 68 Annex 14: Countriesat a Glance(cont.) Telecommunications& ICT DevelopmentProject - Grenada POVERTYand SOCIAL Grenada 8 Carib. income Developmentdiamond' 0.10 534 335 GNIpercapita (Atlas method, US$) Life expectancy 3,790 3,260 5,340 GNI (Atlas method, US$billions) 0.39 1,741 1,788 T1 0 8 1.6 1.3 Laborforce I%) 2.1 1.8 GNI Gross per t--f! primary Most recent estlmate(latest yearavailable,199703) capita Poverty (% ofpopulationbelownationalpovertyline) 32 Urban papulation (% oftotalpopulation) 41 77 76 Lifeexpectancyat birth(years) 73 71 73 Infant mortality(per 1,000livebiiths) 20 28 I 9 Child malnutriition(% ofchildrenunder5) 1 Access to improvedwater source Access to an Improvedwater source (% ofpopulation) 95 86 illiteracy(% ofpopulationage 15+) I 1 Gross primaryenrollment (% ofschwl-age population) 95 129 104 Grenada Male 97 131 I04 Female 92 126 104 KEYECONOMICRATIOSand LONG-TERMTRENDS 1983 1993 2002 2003 Economlcratlos' GDP (US$ billions) 0.10 0.25 0.41 0.44 Grossdomestic investmenVGDP 37.2 31.2 34.7 Exports of goods and servicesiGDP 38.5 49.0 47.4 Trade Gross nationalsavingsiGDP .. 15.0 3.3 - Current account balancdGDP -11.8 -16.1 -31.4 -33.6 Interest paymentsiGDP 0 9 0.7 3.6 4.2 Domestic Investment Total debtiGDP 56.0 59.1 111.7 ,13,3 savings Total debt service/exports 11.8 6.4 12.9 16.1 I Indebtedness 1983-93 199343 2002 2003 200307 (average annualgrowth) GDP 5.2 4 0 -0.4 5.7 -Grenada GDP per capita 4.6 2.8 -1.2 4.9 - Upperiniddie-incomegroup Exportsof goods and services 5.8 4.5 -10.5 -5.1 STRUCTUREof the ECONOMY I (% of GDP) Agriculture 20.4 10.6 9.9 9.7 40 industry 16.8 18.9 22.0 23.6 2o Manufacturing 4.7 6.1 7.2 8.2 0 Services 62.8 70.5 68.0 66.7 .20 Private consumption Generalgovernmentconsumption 18.3 18.3 16.8 14.4 imports of goods and services -GDI -GDP I Growthof exportsand (averageannualgrowth) 1983-93 1gS303 imports(%) 1 Agriculture -0.2 0.3 -4.1 21.7 Industry 7.2 6.8 0.3 20 Manufacturing 10.6 6.4 3.0 -8.6 10 Services 5.9 3.5 -0.3 3.0 o -10 Private consumption 3.1 3.8 -3.0 27.8 -20 Generalgovernmentconsumption 5.5 2.4 -2.8 -9.3 -30 1 Gross domestic investment 6.1 5.2 -1.1 32.2 -Exports +Imports Importsof goodsand services 3.7 4.5 -11.1 30.7 ~ Note:2003 data are preliminaryestimates. The diamonds show four key indicatorsin the country(in bold)comparedwith its incomegroupaverage. Ifdata are missing, the diamondwill be incomplete. 69 Annex 14: Countriesat a Glance(cont.) Telecommunications& ICT DevelopmentProject ICT at a glance Grenada LaHn upper America middle ada h Caribbean income GWI porcaplta (PPP, Si Country background information 2002 2002 2002 Populatlon, mldyear (millions) 0.10 5267 330.9 Poverty(% of populatlonbelow $1aday) Adult literacyrate (I ages 15andover) 89.5 93.1 2.0004 Urban populatlon (%oftotal populatlon) 762 75 1 I . . I . . GNI per wplta (Atlips method S) - . ism 2,830.0 3,500.0 3,2800 5,0400 iwr i ~ g a iw 2030 a01 2002 GNI per copita (PPP, $) 4,650.0 8,330.0 6,750.0 9,2200 GDP growth (1090-05and 1995-2002,%I 4.5 2.0 2 5 Scientists and englneers in RBD (permlll people) 286 5 6379 Expendlturesfor R8D (46 of CDP) 05 05 ICT infrastructure & access I S 5 2001 2001 2001 Malnlinealmobtlerper 1,IXOp~ople Telaohone mainlines Per 1,000people InlargestcHy(per 1.000 people) Waiting list (thousands) Revenue per line (5) Cost of localcall (3per3 mlnutes) Moblle phones [per 1,000 people) International telemmmunlcatlons Computers & the lntemet PCs p r 1.000people Personal computers Per 1,000 people Installed Ineducation (thousands) Internet Users (thousands) Monthly off-peak access charges Service pmvlder charge ($) Telephone usagecharge (5) ICT expenditures 199s 2001 2001 2001 Total ICT ($, mllllons) ICT as 91of GDP ICT per cepltn ($1 ICT business& govemment environment (ratings from 1 hrr 7; 7is &@&sNhestJ 2002 2002 Broadband internetaccess availability 4.0 4.2 Localspeciallzed IT sewices avalloblllty 4.5 4.9 Competltlon In lSPs 4.0 3 7 Government oiillne services avallablllly 3 3 3 5 Laws relatlng to ICT use 3.3 3.6 Government prlortiizatlonof ICT 3.4 4.6 Secure sewers 2,103 a 2,128 a Notes:Figuresin italics refer io mearlkryear.8. Datareferto 2001. Sources: Counttybackground infomation, UNESCO and World Bank; ICT infrartrucurre and access, IW and UNESCO; Computers and the lntemet, ITU and WITSA ICT oxpondituros, WITSA: ICT business b government environment, World Economic Forum's Global Cmpet&,ivenessReprt 2002-2003 and Gbbal lnfonnafion Techndogy Repon!2002-2003 (ratings) andNetcraft(secureservere). See Definitbnsand Sources for more complete information. DevelopmentData Group,World Bank 70 Annex 14: Countriesat a Glance(cont.) Telecommunications& ICT DevelopmentProject - St. KittsandNevis I St. Kitts Latin Umer- POVERTYand SOCIAL and America middle- Nevis 8 Carib. IIncome Developmentdiamond' 0.05 534 335 Lifeexpectancy GNIpercapita (Atlas me 6,880 3,260 5,340 GNI (Atlasmethod, US$ 031 1,741 1,788 Average annualgrowth, 199743 Population (%) 0.8 1.6 1.3 Laborforce (%) 2.1 1.8 GNI Gross per primary Most recentestimate (latest year available, 199743) capita nrollment Poverty (% ofpopulationbelownationalpovertyline) 30 Urbanpopulation (% oftotalpopulation) 32 77 76 Lifeexpectancyat birth (years) 71 71 73 Infant mortality (per 1,000livebirths) 20 28 19 Childmalnutrition (% ofchildrenunder5) Access to improvedwater source Accessto an improvedwater source (% ofpopulation) 96 86 89 Illiteracy(% ofpopulationage 15+) 11 9 Gross primaryenrollment (% ofschool-age population) 117 129 104 -St. KittsandNevis Male 112 131 104 .._.Uppermiddleincomegroup Female 123 126 104 KEY ECONOMICRATIOSand LONG-TERMTRENDS 1983 1993 2002 2003 Economicratlos. GDP (US$billions) 0.06 0.20 0.35 0.36 Grossdomestic investmenffGDP 37 2 45.3 46.3 47.9 Exportsof goods and servicedGDP 48 9 56.3 46.7 35.0 Trade Gross national savings/GDP 11.7 30.6 10.9 17.5 1 Currentaccount balancelGDP -36.9 -11.6 -36.8 -29.6 Interest payments/GDP 0.3 0.7 5.1 5.5 Total debffGDP 15.9 27.1 160.5 169.4 Totaldebt service/exports 4.0 23.3 33.2 Indebtedness 198393 1993.03 2002 2003 2003.07 (averageannualgrowth) - GDP 6.5 3.5 -03 0.6 St. KiftsandNevis GDP percapita 7 2 1.6 -1.1 -0.2 . _ Upper-middlehcomegroup Exportsof goods and services 7.5 0.0 0.4 -24.8 STRUCTUREof the ECONOMY 1983 1993 2002 (% of GDP) Agriculture 11.6 6.8 3.3 Industry 24.8 25.2 29.7 28.3 Manufacturing 12.6 11.1 9.7 Services 63.6 68.0 67.1 68.7 Private consumption 234.4 50.2 58.8 Generalgovemmentconsumption 22.9 17.2 18.9 23.9 Importsof goods and services 93.4 71.1 71.2 55.9 I (average annualgrowth) 198343 199343 2o02 2003 Growthof exports and Imports(%) 1 Agriculture -0.8 0.2 13.4 -12.6 2o Industry 5.2 7.2 -3.6 -2.6 lo Manufacturing 1.6 5.9 -4.1 0.7 0 Services 7.9 3.7 2.1 30.0 .io 3 Private consumption 1.7 2.9 23.9 -27.7 Generalgovernmentconsumption 2.8 5.7 -6.3 26.5 Gross domestic investment 11.5 5.3 -9.4 0.8 -Exports -Imports Importsof goodsand services 4.7 2.7 5.3 -21.5 Note:2003 data are preliminaryestimates 'The diamondsshow four key indicatorsinthe country (in bold)comparedwith its incomegroupaverage. if data are missing,the diamondwill be incomplete. 71 - Annex 14: Countriesat a Glance(cont.) Telecommunications& ICT DevelopmentProject - ICT at a glance St. Kitts and Nevis 10#2003 S t Kim Latin upwr and America middle 11 GNI per capi!a (PPP. 8) Nevlr 8 Caribbean income 11,ODD Country background information 2002 2002 w n Population, mid year (mllilons) 526.7 330.9 Poverty(% of population below 81 aday) Adult llteracyrate (46 ages 15andoverl 89.5 93.1 ODO Urban population(%of total pOpUlatlOn1 76.2 75.1 , . . . . GNI per capita (Atlas melhod, $) 3,290.0 5,040.0 IWG 1907 i s i IBB ZWQ mi. 2002 GNI per capita (PPP, 0) 6,750.0 9,220.0 GDPgrowth (1990-95 and 1995-2002, %I 2.0 2.5 Scientists and englneers In R8D(per mill. 286.8 637.9 Expendlturesfor RBD (96 of GDP) 0.5 0.5 ICT infrastructure 8 access 2001 2001 Telephone malnilnes Per 1,000 people 163 201 In largestcity(per 1,000people) 775 240 Waiting llst (thousands) 4.4113 3.626 Revenue per line (5) 827 1,032 Cost of localcall [S per 3 mlnutes) 0.09 0.09 Mobile phones Der 1,000 people1 160 253 lntematlonal teiemmmunlcations outgoing trafnc (minutes per subscriber) 87 111 cost dl call la US. (s Der3 mlnulesl 3.20 2.16 Daily newspapen (per 1,000people) 70 123 Radlos (per 1,000people) 659 676 4ta 466 lMainlirm WMc4k. Telwislon sets (per 1,000 people) 252 280 274 369 Computers8 the Internet 1995 2001 2001 2001 I ~ c s p a r u m o p c ~ ~ e I Personal"pulers zm Per 1,000 people 59.3 84.7 inslalied Ineducation (thousands) internet im Users (thousands) 25.666.9 27,607.4 Monthlyoff-peakaccess charges a Serviceprovldercharge($) 21.E. im6 tm in98 imo zom 2001 Teiepholie usagechaue($l 0.42 ICT expenditures 1995 2001 2001 2001 Broadband Internetaccess avalabllity Local specializedIT S~NICPSmailability Competition in lSPs Govemmentonline seivlces availablilty L3ws relatlngto ICT use Government prlorthation of ICT Securesewers Notes:Figures In italics referto an eerlhr yew. a. Dab referto 2001. Sources:Country background Infomfbn,UNESCOandWorldBank E T infrastructure and BCCOSS, ITUand UNESCO Computers and the Intomet. ITU and WITSA ICT expendituros, WITSA;ICT business 6povernmont environment, World Economio Forum's GlabalCompetkkeness Report 2002-2003 snd Gbbsllnfomafh 7echnakrgyRsport 2002-2003 (ratings)and Netcnfl [secureservers).See Deflnitbnsand Sourees for morecompleteinformation. DevelopmentData Group, World Bank 72 Annex 14: Countriesat a Glance(cont.) Telecommunications& ICT DevelopmentProject - St. Lucia Latin Upper- America middle- St. Lucia 8 Carib. income Developmentdlamond. Population, mid-year (millions) 0.16 534 335 GNI per capita (Atlas method, US$) Life expectancy 4,050 3,260 5,340 GNI (Atlas method, US$billions) 0.65 1,741 1,788 Average annual growth, 199743 T Population(%) 1.4 1.6 1.3 Laborforce (%) 2.1 1.8 GNI Gross primary Most recent estlmate (latest year available, 199743) capita enrollment Poverty(% ofpopulationbelow nationalpoverty line) 25 Urban population(% of totalpopulation) 31 77 Lifeexpectancyat birth (years) 74 71 1 Infantmortality(per 1,000live births) 17 28 Child malnutrition(% ofchildrenunder 5) Access to improvedwater source Access to an improvedwater source (% ofpopulation) 98 86 illiteracy(% ofpopulation age t5+) 11 Gross primaryenrollment (% of school-agepopulation) 111 129 104 St. Lucia Male 111 131 104 Uppermiddie-income group Female 112 126 104 KEY ECONOMIC RATIOSand LONG-TERMTRENDS 1983 IQ93 2002 2003 Economlcratios' GDP (US$ billions) 0.15 0.49 0.68 0.69 Grossdomestic investmenVGDP 21.7 24.8 22.8 28.8 Exportsof goods and services/GDP 63.6 67.7 46.3 55.7 Trade Gross domestic savingslGDP 14.3 18.9 10.2 10.2 Currentaccountbalance/GDP -8.0 -10.7 -12.5 -18.6 Interestpayments/GDP 0.4 1.o 1.3 1.7 Total debVGDP 12.2 20.5 62.3 66.3 Total debt service/exports 1.3 3.2 7.0 6.8 I Indebtedness 1983-93 199343 2002 2003 200307 (average annualgrowth) - GDP 9 0 1 2 0.0 2.3 St.Lucia GDP per caplta 7 5 -02 -1.4 1.9 --- - Uppermiddle-income group Exportsof goods and services 10 7 -2.0 -15.0 23.2 STRUCTUREof the ECONOMY (% of GDP) :&&I Agriculture Industry 18.3 15.0 21.010.9 18.56.4 Manufacturing 9.5 7.5 4.8 1If Services 66.7 68.1 75.1 76.6 0 -10 Privateconsumption 63.3 66.8 56.3 57.2 -20 Generalgovernment consumption 22.4 14.3 26.9 27.6 Importsof goods and services 71.0 73.6 52.2 69.3 -GDI --O'GDP 1983-93 199303 2003 Growthof exports and Imports (%) (average annualgrowth) Agriculture 5.3 -8.3 -8.5 -11.8 4 ' T Industry 11 9.8 1.7 -1.5 -1.1 30 20 Manufacturing 7.4 -0.5 5.0 0.6 i o Services 6.8 2.2 1.1 4.3 0 -10 Privateconsumption 9.7 -1.2 0.7 3.9 -20 General government consumption Gross domestic investment 11.1 3.1 -12.5 29.5 -Exports -Imports Importsof QOOdSand services Note:2003 data are preiiminalyestimates. The diamonds showfour keyindicatorsin the country(in bold) comparedwith its income-groupaverage.Ifdata are missing,the diamondwill be incomplete. 73 Annex 14: Countriesat a Glance(cont.) Telecommunications& ICT DevelopmentProject ICT at a glance St. Lucia Latin Upper Amerlca middle GNI per capita(PPP,SJ (LCaribbean income Country background information 10,000 2002 2002 Population. mid year (mililons) 526 7 330.9 6.000 Pavefly[% of population below $1 a day) 4,000 Adull literacyrate (% ages 15and mer) 89 5 93.1 Urban population (% oftotai poplrlation) 76.2 75.1 GNI per capita (Atlasmethod, $1 3,280 0 5.040.0 1996 1987 1 8 1 1989 2030 a101 zoo2 GNIpercaplta (PPP, $, 6.750 0 9,220.0 GDP grovrth (199045 and 1995-2002, 96) 20 2.5 Scientists and engineersin RBD(per mill. people) 266 8 637.9 Expenditures for M D (4b of GDP) 0 5 0.5 ICT infrastructure& access 2001 2001 I I mol Malnllnsrhnobilesper1,aOQpoople Telephone mainlines Per 1,000 people 163 201 In largestcly (per 1,000 people) 175 240 Waitlngllst (thousands) 4 403 3,626 ?a0 Revenue per line @) 827 1,032 Cost of local call ($ per 3 mlnutes) 0.09 0.09 200 Moblle phones (per 1,000 people) 160 253 International telemmmunicatlons 100 Outgolng traffic (mhutes per subscrlberl 87 111 Cost oi call to U S (8 per 3 minutes) n 320 2.16 Daily newspapers(per 1,000 people) 70 123 Radios (per 1,000 people] 410 466 Televislon sets (per 1,000 people) 274 3aa Computers B the Internet 2001 200f PCsper 1.00Opwple Personal computers 160 Per 1,000people 516 3 84.7 installed in education (thousands) Internet 80 Useis (thousands) 25,666 9 27,607.4 Monthlyoff-peak access charges a Sslvice provider charge ($) 21 6 Telephone usagecharge ($1 a 42 ICT expenditures 1995 TO01 2001 2001 Broadband internetaccess awllability LocalspecializedIT sewices availability Competition in lSPs Govemment onllne services amliability L w s relating10 ICT use Gwemment prlortlzotion of ICT Secure servers Notes: Figuresin daiics referto anearlier year a Datareferto 2001. Souroes Countrybackaroundinformation,UNESCOandWorld Bank ICTinfmtructure and(~ccecpcs,ITUandUNESCO,Computers andthe Internet. ITUand WITSA, ICT expend'hres. WITSA: ICT business(L swcrnment environment,World Economc Forum's GlobalCmpaftheness Rewfi 2002-2003 and GbbalInfuima~mnTehdow Report2002-2003 Ewtinss)andNetcrafl(securesewen;) See Deflnitbnsand Sourcesfor more completeinformation DevelopmentData Group World Bank 74 Annex 14: Countriesat a Glance (cont.) Telecommunications& ICT DevelopmentProject - St. Vincent andthe Grenadines PRICES and GOVERNMENT FINANCE 1983 1993 2002 2003 Domesticprices lnflatlon(Oh) I (% change) Consumer prices 5.5 4.3 0.4 1.5 Government finance (% of GDP, includes current grants) Current revenue 26.6 31.O 31.5 Current budget balance 4.1 2.6 4.1 Overall sumlus/deficit -3.I -2.3 -1.3 I -GDP deflator -0-CPI I TRADE 1983 1993 2002 2003 (US$ millions) Exportand Import levels(US$ mlll.) Total exports (fob) 52 53 43 Bananas 23 13 12 T Eddoesand dasheens 2 2 Manufactures 19 30 38 Total imports (ci0 118 182 182 Food 28 44 Fueland energy 7 17 Capitalgoods 21 63 Exportprice index (1995=100) 102 97 98 98 00 01 02 Importprice index (1995=100) 102 "ports WlmpOrtS Terms of trade (1995=100) 101 BALANCEof PAYMENTS 1983 I993 2002 2003 (US$ millions) Current account balanceto GDP(%) Exportsof goods and services 59 105 149 176 0 importsof goods and services 79 152 186 241 4 Resourcebalance -20 -47 -37 -65 10 Net income -2 -8 -18 -16 15 Net currenttransfers 19 14 16 12 20 Current account balance -3 4 2 -39 -68 25 Financingitems (net) 3 40 31 66 30 Changesin net reserves 0 2 8 2 351 Memo: Reservesincludinggold (US$ millions) 35 54 Conversionrate (DEC, locaVUS$J 2.7 2.7 2.7 2.7 EXTERNAL DEBTand RESOURCE FLOWS 1983 1993 2002 2003 (US$ millions) :omposltlon of 2003 debt (US$ mlll.) Total debt outstandingand disbursed 25.6 102.1 170.0 188.0 IBRD 0.0 0.4 0.5 0.6 IDA 0.0 7.6 10.1 11.5 G: 34 A 8: 12 Total debt setvice 1.5 8.5 11.0 13.0 IBRD 0.0 0.0 0.3 0.0 IDA 0.0 0.1 0.2 0.2 Compositionof net resourceflows Officialgrants 2.3 2.7 4.4 3.9 Oficial creditors 3.7 4.9 1.1 17.4 Privatecreditors -0.2 0.0 7.5 20.7 Foreigndirect investment 2.1 31.4 32.0 44.0 Portfolioequity 0.0 0.0 0.0 0.0 World Bank program Commitments 0.0 0.0 9.2 0.0 \ IBRD - E Bilateral - Disbursements 0.0 0.3 2.3 0.6 % IDA - ~ D. Other multilateral F Pdvate ~ Principalrepayments 0.0 0.0 0.3 0.1 2-IMF G Short-terrr Netflows 0.0 0.3 2.0 0.5 Interestpayments 0.0 0.1 0.2 0.1 Nettransfers 0.0 0.2 1.8 0.4 DevelopmentEconomics 3/7/05 75 Annex 14: Countries at a Glance(cont.) Telecommunications& ICTDevelopmentProject ICT at a glance St. Vincent and the Grenadines St. Vincent Latin LMHW andthe America middle renadlner 8 Caribbean Income Countrybackground information 2002 2002 Populatlon,mid year (mllilons) 526.7 2,410 7 Poverty(% of population below $1 a dafl Adult llteracyrste f% ages 15and over) 89.5 866 Urban populatlon(% oftolal population) 48.1 57.0 76.2 49 4 GNI per cap113(Atlas method, $1 2,3200 2.820.0 3,280.0 1 3900 GNI per caplla (PPP, $) 4,5600 5,100.0 6.750.0 51300 GDP growlh (1990-95 and 1995-2002, K) 2 3 2,o 2.0 3 7 Sclentisls and engineers In R8D(per mill. people) 286.8 8075 Expendituresfor R&D (Sa of GDP) 0.5 00 ICT infrastructure 8 access Maiiilinorlmobilo~por f,WOpaople Telephone marnlines Per 1,000people In largestcnyiper 1 000 people) WaltlngIIsl [thousands) Revenue per llne (8) Cost of local call ($ per 3 minutes) Mobile phones (per 1,000people) Internationalteietnmmunlmtlons utgoingtrafflc (minutes per subscrlber) - Personalcomputers Per 1,000people 1161 59.3 28.1 InstalledIneducatlon (thousands) Internet T3 Users (thousands) 5 25 686 9 68,936 9 Monthly off-peakaccess charges 0 Serwiceorovidercharae ($1 .6 167 Telephone usagecharge 19 0.63 0.23 ICT expenditures Local specializedIT servlces wailability CompetitionIn lSPs Gwemment onllne sewlces amilab/IIty Laws rel8llngto ICT use Gwemment prlorktzationof ICT Secure servers Notes Figuresin talks referto ane d e r year a. Datareferlo2001 Souroes Countrybackgroundinfomtbn UNESCO and World Bank ICT infrastructureand occe85, INand UNESCO Computersand the Internet ITU and WITSA, ICT expenditures,WITSA ICT business (Lgovernment environment, World Economc Forum'sGlobalCmpet#rvwiessReport2002-2003 and Gbbel lnfonatm TechnotagRepon2002-2003 (ratings)and Netcmft(secureservenl. See Definitmsand Sourcesfor more completeinformation. DevelopmentData Group, World Bank 76 MAP SECTION