1 / 17

EU policy and opportunities for promoting broadband investment

EU policy and opportunities for promoting broadband investment. Anna Krzyzanowska Head of Unit Unit B5: Broadband Speeding up NGN ubiquity: a pillar for digital growth Athens, 13-14 February 2014. We shall discuss:. Broadband as an engine for growth Financing and Funding

ula
Download Presentation

EU policy and opportunities for promoting broadband investment

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. EU policy and opportunities for promoting broadband investment Anna Krzyzanowska Head of Unit Unit B5: Broadband Speeding up NGN ubiquity: a pillar for digital growth Athens, 13-14 February 2014

  2. We shall discuss: • Broadband as an engine for growth • Financing and Funding • Market Framework

  3. Broadband as an engine for Growth What is it all about …

  4. EU Digital Agenda targets: Progress • Challenges ahead for fast and ultra-fast broadband coverage and take-up • "close to target" in areas such as eGov, internet usage and partly eCommerce • Basic broadband target achieved in autumn 2013 Source: Digital Agenda Scoreboard

  5. Broadband drives competiveness "An increase in the broadband penetration rate by 10 percentage points raises annual growth in per-capita GDP by 0.9 to 1.5 percentage points". Faster broadband = higher growth. (Czernich et al. - CESIFO WORKING PAPER NO. 2861, Ifo Institute for Economic Research, 2009)

  6. Basic broadband for all by 2013 Standard fixed broadband* availability adding wireless, EU coverage is 99.97% *xDSL, Cable, FTTP and WiMax; Source: Point Topic

  7. Share of High-speed broadband 20% of EU fixed broadband subscriptions are NGA Source: Communications Committee

  8. Financing and Funding • ESIF • CEF • Broadband State Aid

  9. EU public funding • Possible EAFRD support: • Complementarity in a few Member States: FR, DE, SE, UK, SI • Possibly need for reinforcement of administrative capacity

  10. EU public funding • A significant share of the EU budget is spent on cohesion policy(ESIF) with ICT (incl. broadband) being one of multiple "thematic objectives" • 2007 – 2013 (previous budgetary period): • c. €2.3bn allocated to broadband, c. €14.5bn to ICT • Further resources from Rural Development Funds (c. €688m from EAFRD + EERP) • GREECE: 12.5 bn ERDF Community Contribution – 850 m ICT reduced to 605 m due to lack of timely absorption • 2014 - 2020: ICT one of four "concentration themes" in the European Regional Development Fund (ERDF) • ESIF can act as source of non-negligible ICT/broadband funding if MS: • select ICT/broadband as thematic objective • build an executable investment pipeline and ensure projects are carried out and funds are used • Member States are currently drafting their frameworks for ESIF spending (Partnership Agreements and Operational Programmes)

  11. EU level financial instruments Connecting Europe Facility (CEF) • €150m for high-speed broadband – small budget, but potentially high multiplier effect (depends on instrument) • CEF facilities designed to stimulate development of new financing models in the sector (e. g. project finance) which enable more efficient risk-sharing between investors • Possibly considerable transformative impact if this succeeds in establishing new role models that are widely replicated • Currently project bonds pilot – openfor project proposals! • CEF technical assistance will improve the pipeline of broadband projects in general andmake more projects financeable (regardless of instrument) • EIB standard operations (senior lending) and RSFF offeroptions for corporate financing

  12. Project Bonds Initiative EU/EIB support Structure at project level (funded solution): SPV Project Costs Equity • Sufficient increase in credit quality of senior debt so as to attract bank/ bond financing • Sub-debt debt pricing includes fair risk margin, i. e. no subsidy • Sub-debt can be combined with different funding sources (senior loans, bonds) Bank/ Project Bonds Sub-debt EU partner (e. g. EIB) Investment grade debt Sub-investment grade debt

  13. Broadband financing Broadband financing – observations • Market players are exploring alternative models for structuring and financing high-speed broadband roll-out • "One-size-fits-all" solution unlikely, but these efforts will be positive for deployment • While new financing models can make a contribution, they are no panacea for unviable projects • However: ICT is not a static market, but a dynamic ecosystem in which devices, services and connectivity are closely intertwined and evolve rapidly • More innovation in applications and devices will likely trigger demand for higher speeds and will shift the boundaries of commercially viable roll-out in the short to medium term

  14. State Aid -Public financing State aid: new guidelines • Achievingthe right mix between public and private investment: public interventions targeted at market failures; faster decisions. • Principles: • Technological neutrality: Next Generation Access networks can be based on different technological platforms. • to protect private investors, publicly financed infrastructure can only be allowed if it provides a substantial improvement ("step change") over existing networks. • public funding of ultra-fast broadband networks (of more than 100 Mbps) will be possible also in urban areas subject to very strict conditions to ensure a pro-competitive outcome. • when a network is realised with taxpayers' money, competitors will benefit from a truly open network for the benefit of consumers. • Transparency has been reinforced: publication of documents, a centralised data base for existing infrastructure and ex post reporting obligations to the Commission.

  15. Broadband financing Conclusions • Project Bonds pilot phase – still open for project applications! • CEF will ensure continued availability of EU financial instruments through 2020 • ESIF are an important source of funding – time for advancing project proposals is now!

  16. THANK YOU! • anna.krzyzanowska@ec.europa.eu • http://ec.europa.eu/dgs/connect/en/content/broadband-inter-institutional-negotiations-connected-europe-facility

  17. Market Framework • Non-discrimination and costing • Cost reduction measures

More Related