Introduction of Universal Service Obligation at the BiH Telecom Market


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		Monday, September 30, 2002
		REPORT from the Forum “Introduction of Universal Service Obligation at the BiH Telecom Market” Pursuant to Point 1 of the Telecom Sector Policy document, adopted by the BiH Council of Ministers, the Communications Regulatory Agency (CRA) organised a Forum with topic “Introduction of Universal Service Obligation at the BiH Telecom Market” on 20 September 2002 at “Grand” Hotel in Sarajevo. The basic aim of the Forum was to review the obligations related to provision of Universal Services in Bosnia and Herzegovina, by taking an overview of possible problems in terms of application, as well as identifying of eventual methods of funding. The Forum was attended by nearly 50 participants from various institutions and organisations such as the BiH Council of Ministers, OHR representatives, Entity Ministries, representatives of the World Bank (WB), European Commission (EC), European Bank for Reconstruction and Development (EBRD), international experts in this field, domestic telecom operators and other telecom service providers. After the welcoming notes by Mr David Betts, CRA CEO, the meeting was formally opened by Mr Milan Lovric, Deputy Minister of Civil Affairs and Communications at the CoM. His speech was followed by appropriate notes by Mr Besim Mehmedic, Minister of Traffic and Communications of Federation BiH. Seven presentations were held at the Symposium. CRA Director of Telecommunuications presented the position of a regulator. The international experts in this field focused on presentation of experiences from Europe and the world in sense of definition of range and methods of financing, as well as influence of privatisation on establishing of Universal Service Obligation. Representatives of BH Telecom and Telekom Srpske have analysed the role of incumbent operators in terms of provision and methods of funding of Universal Service. After the presentations and a very constructive, professional and comprehensive discussion, which has pointed out the great importance of this field of telecommunications, the Conclusions were made, which should represent the guideline for future activities of all parties in this field. The Conclusions can also serve as the basis for draft proposals of the CoM document on Introduction of Universal Service Obligation at the BiH Telecom Market. *Conclusions:* Resolving of problems related to provision of Universal Service actually represents resolving of certain social needs in our country. As in all other countries it should be treated as such in BiH, and less as an element of economic development. It is s service to the community. Thus it is necessary to define Universal Service very clearly, based on elements from European directives and global practice. This means that it is necessary to categorise these services according to type, range and quality, but also according to other requirements, such as: classification of services in terms of location of application (urban and rural areas), offering options for solutions that may support an individual or to support an operator. The first phase should be defining Universal Access, and the second phase - provision of Universal Service. Especially important segment of this problem is directed towards searching for financial models, i.e. mechanisms for financing of Universal Service. One of the most popular models is to develop the market, i.e. by establishing an open and competitive market to strengthen the society and to make easier resolving of further financing of Universal Service in telecommunications, but also of everything else. We suggest examination of the possibility to establish special foundations for Universal Service. Funds can be established by subjects on the telecom market or from other sources. We suggest that this which is not a realistic solution for our country. It is especially necessary to develop the idea that the state, i.e. Council of Ministers, may wish to look for adequate international aid in terms of favourable long-term loan, from the World Bank or EBRD, which would be designated for resolving of Universal Service. That could be done on the basis of special programme that would define the demand for designated coverage of the country with Universal Service, with help of the designated funds. Telecom Operators, especially the incumbent operators, have their clear roles, tasks and obligations, it is only an issue to find adequate form of solution that will not slow down their normal development and survival at the competitive market. It is necessary to consider the possibility that, in addition to the incumbent telecom operators, also other subjects from the telecom market take part in resolution of Universal Service. Domestic or foreign service suppliers, network operators or Internet Service Providers. Privatisation in telecom has a great importance in the process of resolving of Universal Service. Also a clear policy concerning Universal Service is an essential prerequisite of the tender for selling of a telecom operator. It means that within the purchase of telecom operator, the buyer may see its obligation regarding Universal Service clearly defined. Exclusivity on provision of international services by the end of year 2005 justifies such requirement. In resolving the Universal Service policy, it is necessary to allow all appropriate technologies. The solution should not be technology dependent. By underlining the social aspect of this issue, it is necessary to be clear that a part of Universal Service in telecommunications provision is dependent upon resolution of Universal Service needs in other fields, which are necessary for the citizens. This includes health, education, information for people/ open government etc. The Law on Communications should also resolve and regulate the field of Universal Service in all its aspects. From the above, we suggest a programme that to define: WHAT, WHO and WHEN? This could be quickly defined by a qualified expert group, appointed by the Communications Regulatory Agency (CRA), with experts that have the insight in this field and who know and who can prepare reasonable proposals for the Council of Ministers. This programme should define activities before the end of year 2005, which is the conclusion of the Process Package giving exclusivity on provision of international services. It is this element which secures significant profit for incumbent operators. Completion of the privatisation process, combined with the other elements of this document should result in commercial participation to supply appropriate aspects of the Universal Services. Sarajevo, 30 September 2002.

Copyright (C) 2002 CRA