1

Introduction to

World Bank

22th June, 2009

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• The Avanza Plan was approved by a Cabinet meeting on 4 November 2005.

• The Avanza Plan 2 was presented at the Cabinet meeting of 30 January 2009.

• Headed by the Ministry of Industry, Tourism and Trade (Ministerio de Industria, Turismo y Comercio, MITyC) it was drafted with the agreement of all of the central government Ministries and the social agents involved:

The Avanza Plan: is a historic milestone in the development of the Information Society

Work groups

CATSI / PC PAPER

Autonomous Regions

FEMP

Central Government / Interministerial Committee

OthersAssociationsEELL

SENATE

ICT sector

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• Avanza includes a series of legislative measures and initiatives for direct action with a specific budget.

• From the start, the Plan has applied a “joint effort” policy: agreements and joint financing with other social agents, both public and private.

• To date the Avanza Plan has allocated the following funding:– The 2005-2008 Avanza Plan budget is over €5.076 billion, of which more than 99% has been allocated.

– Agreements with all the Autonomous Regions: €1.297 billion (of which the Autonomous Regions accounted for €118 million).

– Additional funding was allocated in 2006-2007: more than €3.8 billion.

Avanza: a true commitment by the entire Society

1,794,043

1,539,3991,197,733

535,756 542,914

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

1,800,000

2,000,000

2004 2005 2006 2007 2008

Annual Budget(thousands of euro)

2009

1,516,400

x 3

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The four lines around which the Avanza Plan is structured

More households equipped and citizens using ICT as part of everyday life.

Social inclusion and narowing of the digital divide.

Digital CitizenshipDigital Citizenship

Loans to families, young people and students Telecentres Encouraging women to use the Internet Avanza Space Inclusion of the elderly and people with disabilities

Extending broadband and mobility. Increasing confidence in the security of ICT. Promoting digital identity. Development of digital content.

Digital ContextDigital Context

Broadband and Mobile Telephony Extension Plans National Plan for Transition to DTT (Digital Terrestrial Television) Security (INTECO) Digital Content Promotion Plan Open source software (CENATIC)

Greater adoption of ICT among SMEs and enterprises in general (e-commerce, electronic invoicing).

Digital EconomyDigital Economy

Transition from traditional education to one that is in line with the digital age.

Guarantee the right of citizens and enterprises to conduct business electronically with the public administrations.

Networked Education Healthcare Online Programme Networked Civil Registers Plan to Promote e-Administration Electronic ID (Spanish Nat. Id. Card)

Competitiveness

Social welfare

Quality of life

Productivity

Avanza SME, networked industrial parks, NEW programme Training in ICT Technology loans Profit R&D&i and driving force projects .es domains

Accumulated budget 05-08: €856 million

Accumulated budget 05-08: €2,579 billion

Accumulated budget 05-08: €1,344 billion

Accumulated budget 05-08: €297 millionDigital Education andDigital Education and

Public ServicesPublic Services

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Main achievements of the Avanza Plan

24 million citizens are connected to the Internet, 97% with broadband (in 2003 there were 11.7 million, 50% with broadband).

179,000 families have received 0% interest Avanza loans (€217 million).

9 million Spanish citizens have an electronic ID.

12 million people in rural areas have received training in and access to the Internet, thanks to nearly 3,000 telecentres and 2,500 connected libraries.

Digital Citizenship

Digital Economy Avanza has funded more than 2,760 R&D&i projects in enterprises, with an investment of

over €1 billion.

102,000 SMEs have received 0% interest Avanza loans (€1.3 Billion).

The total funding (including loans and grants) has reached €2.3 billion.

Over 1,010,000 new .es domains.

Over 730,000 workers have received training in ICT.

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Main achievements of the Avanza Plan

Availability of networked public services: 70%, 8 points above the EU average.

Avanza Local: 435 local entities with new ICT equipment and services. An investment of €314 million.

Up to December 2008 over 26.5 million pages have been transferred to digital format in 227 civil registers and 1,900 computers have been installed in 1,331 magistrates' courts.

Networked Public Services

Broadband Extension Plan broadband coverage: 99% population (19 points more than in 2004). Public/private investment: €568 million.

DTT coverage: 92.5% of the population, which is above the EU average. 17 million receivers sold.

Mobile telephony coverage: 99% (one of the highest in the EU).

Digital Content Promotion Plan: €390 million in grants in 2007-2008. Great success of FICOD I (Nov’07) and FICOD II (7,200 enterprises and professionals registered at Nov’08!).

Digital Context

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Plan Avanza2: 2009-2012

• Generation of greater confidence in ICTs among both citizens and enterprises, through public policy on data security.

Confidence, security Confidence, security and accessibilityand accessibility

eConfianza Plan ICT accessibility Users' Charter of Rights

• To encourage access to and use of new technologies by both citizens and SMEs.

Citizen training SME training

• To foment the development and implementation of the Information Society, improving electronic public services for citizens and enterprises through the use of ICTs.

Digital Public ServicesDigital Public Services

Healthcare Local administration Civil registers

• To support companies developing new products and services with a high ICT content and promote the participation of the Spanish industry in creating the Internet of the Future, with special focus on digital content.

Development of the ICT sector Development of the ICT sector (SMEs)(SMEs)

Announcement of funding for the Internet of the Future programme Announcement of funding for the Digital Content programme

• Successful transition to DTT.

• Greater coverage and speed of broadband in rural areas.

• Providing the scientific community with improved networks and services.

• Legislative measures in the area of common infrastructures in public buildings and telecommunications conduits in public domain spaces

InfrastructureInfrastructure

Transition to DTT Broadband Extension Plan - Phase 3 Rediris

Plan Avanza2:

(2009-2012)

Budget 2009: €663 million

Budget 2009: €186 million

Budget 2009: €89 million

Budget 2009: €548 million

Budget 2009: €11 million

Citizen/SME TrainingCitizen/SME Training

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One of the most mountainous countries in Europe:

– The average altitude is 660 meters.

•Mountainous territory (50%) •Widely dispersed population

Broadband development in SpainDifficulties to guarantee complete availability

• 84% of municipalities have < 5,000 inhabitants.

Source: United Nations 2005

Source: INE 20078640048320

245

% Rural Population

Spain 23,3%Netherlands 19,8%Republic of Korea 19,2%Sweden 15,7%United Kingdom 10,3%

Population Density

Num. of municipalities %/ total

Rural municipalities <101 inhabitants 996 12%Rural municipalities (< 2,000) 5.820 72%Intermediate (2,000 to 10,000) 1.570 19%Urban 8 (> 10,000) 721 9%

Total 8.111 100%

•High rural population percentage (>23%)

Low population density in rural areas

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Broadband development in SpainActions

National Program for Broadband roll-out in rural and remote areas: PEBA (2.005 - 2.008)

AVANZA INFRASTRUCTURES SUBPROGRAM(2008- 2012)

Cost of deploying telecommunications infrastructures to cover most of the population is one of the highest in Europe Avanza support plans.

The final goal is to reach a complete availability of broadband access in rural and remote areas across the national territory where no service was provided, with technical and economical conditions similar to those existing in urban zones

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2004: • Broadband coverage of the population in

Spain 80%• broadband availability inferior in rural

areas compared to urban zones.

• In Spain: 8,110 municipalities: 5,820 < 2,000 inhab.; 996 < 100 inhab.; also, difficult orography.

• PEBA: Broadband to population centres (>5 houses) without or with insufficient coverage.

Broadband development in Spain PEBA (2005-2008): kick-off and targets

PEBA

Favoured populatio

n

Municipalities

Population

centres

TOTAL 8.368.946 5.706 58.442

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Broadband development in SpainPEBA kick-off: tools and requirements

Ministerial Order ITC/701/2005

Two calls for propolsals for grants:• First call (2.005): 13 projects, 2 operators• Second call (2.007): 16 projects, 2 operators

Service requirements:

1. Minimum bandwith: 256Kbps/128Kbps.

2. Maximum prices: Registry fee: 39 € Monthly fee: 39 €

during first 36 months of contract

Low installation costs

Operative requirements:

1. Minimizing the public aids distortion of the competition

2. Opening the financed networks 3. Promoting technological neutrality4. Co-financing with ERDF funds

Types of economic aids:

• Grants: non-recoverable funds• Reimbursable loans: 0% interest, maximum 10 years of amortization; grace

period: 3 years

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Broadband development in Spain PEBA: Techonologies

Telefonica:

Telefonica has invested 75 million € to provide broadband to 58.409 population centres with three technologies: ADSL, WIMAX and Satellite

Telecable:

Telecable has invested 3,9 million € to provide broadband to 33 population centres with two technologies: HFC and Satellite

Telefónicatechnologies Type

Download speed

Upload speed

Price (no VAT)

ADSL Wired 3Mbps 256Kbps 39 € (1)

WIMAX Wireless 256Kbps 128Kbps 39 € (2)

Satellite Wireless 256Kbps 128Kbps 39 € (2)

Telecabletechnologi

es TypeDownload speed

Upload speed

Price (no VAT)

HFC Wired 10Mbps 500Kbps 36 €

Satellite Wireless 1Mbps 128Kbps 36 € *

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2004: Broadband coverage of the population in Spain 80%

October 2008 Broadband coverage of the population in Spain 99% ‘Rural Broadband’ became ‘commercial Broadband’

PE

BA

F

irst

cal

l

Broadband development in Spain PEBA: Deployment evolution

2004 2005 2006 2007 2008

PE

BA

en

ds

PE

BA

S

eco

nd

ca

ll

Startup deployment Final deployment

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Action lines to improve broadband access:

F1: Development of broadband and other telecommunication services at rural and isolated areas F2: High Capacity rural networks: improvement of transport networks to connect municipalities to main data transmission networks in order to provide advanced telecommunication services

Broadband development in Spain Avanza Infrastructures (2008-20012): kick-off and targets

Objectives:• To continue investments initiated in PEBA to provide broadband access to very small population centres

• To improve bandwith and capacity provided by telcos at rural areas

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BROADBAND AND ECONOMIC RECOVERY

• “The Efficient use of information and communication technologies (ICT), driven by better high-speed internet (broadband) access, is…key to raising productivity and stimulating innovation in Europe, including in rural areas” (Lisbon Programme, 2008-2010)

• The European Economic Recovery Plan highlights the importance of Broadband communications for modern economies and aims to ensure that broadband is available to all Europeans 2010

• In this Context, the Commission has proposed an additional funding of € 1.0 billion to bridge the broadband gaps in rural areas. BB is expected to create 1 Million jobs and boost the EU’s economy by €850 billion between 2006 and 2015

• “BB infrastructure can be a good target for economic stimulus spending because projects can be initiated quickly, are labour-intensive, can minimise economic leakages, and may promise stronger marginal impacts on supply and productivity than investing in established networks such as electricity, gas, water and transportation” (OECD)

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BROADBAND IN THE EU

EU Average 23 %

EU fixed broadband penetration rate - fixed BB lines per 100 population (January 2009)

10

.9%

11

.2%

11

.7%

13

.2%

13

.4% 1

6.3

%

16

.5%

17

.1%

17

.4%

17

.5%

18

.2%

19

.0%

20

.2%

20

.2%

21

.0%

21

.4% 2

4.6

% 27

.5%

27

.5%

27

.7%

28

.4%

28

.8%

30

.7%

31

.3%

36

.2%

37

.3%

23

.9%

22

.9%

0%

5%

10%

15%

20%

25%

30%

35%

40%

SK BG RO PL EL HU PT CZ LV LT CY IT ES IE SI AT EU27 MT EE DE BE FR UK LU FI SE NL DK

Data for NL as at October 2008

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BROADBAND

• The gap between the best and the worst performing countries in Europe remains significant: 26.3 percentage points between Slovakia and Denmark

• 93% of EU-25 population accesses broadband in the EU

• However, 30% in rural zones of EU-27 has no access to broadband

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RURAL GAP IN EU-27

ES

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THE NEW EU BROADBAND STRATEGY

• Priorities focused on Effective usage and take-up rather than coverage

• Productivity gains

• Guidelines from DG Competition for the application of State Aid rules on Broadband investments and deployment

• Priority given to Next Generation Access Networks (NGA)

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BROADBAND IN DEVELOPING COUNTRIES

• An emerging consensus has been growing as to which pre-conditions are necessary for successful BB investment in developing countries, among these:

– Adoption of supportive regulations that embrace innovation and competition

– Set up mutually beneficial public/private partnerships

– Invest in infrastructure and the latest innovative technology

– Encourage competitive environments

– Release spectrum suitable for sustained BB development

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CONCLUSIONS

• The Avanza Plan has been the main policy instrument for the development of the Information Society in Spain, with a successful public partnership between the central Government and regions of Spain

• BB subscription has reached 97 % of internet users (50% in 2003)

• BB coverage extends today to 99% of population (80% in 2004)

• Avanza 2 will continue to improving coverage and quality of networks and services, especially regarding rural areas

• The Avanza infrastructures Program will secure a complete availability of BB access in rural areas across Spain, with technical and economical conditions similar to those existing in urban zones

• The Avanza targets are fully in tune with the EU objectives of turning BB into one of the main drivers of economic growth, innovation and social inclusion , as well as one of the main economic stimulus within the Economic recovery program (EERC)

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• CRISTÓBAL GUZMÁN cguzmanl@mityc.es Tel: +34 91 346 2390

• FRANCISCO MARTÍN fjmartin@mityc.es Tel: +34 91 346 2267

• ESTELA CONDE econde@mityc.es Tel: +34 91 346 2886

• LUIS FRAUCA lfrauca@mityc.es Tel: +34 91 346 2240

THANK YOU FOR YOUR ATTENTION!