Universal Service Fund

A. Problem Analysis

 1. What was the problem before the implementation of the initiative?
The rural areas that has low population are sometime left behind in some countries when it comes to rollout of services like telecom ones. The reason behind that has something to do with the viability from an economic perspective as the telecom service providers are business-oriented . Societies living in the unserved rural areas suffer the lack of basic telecom services to communicate with the rest of the world. On the economy side of a given country, it's proven that any increase in the penetration of telecom services results in an increase in the overall GDP of the country. In light of that, a new public-private partnership model has to be developed and implemented through the Universal Service Fund (USF) to provide the basic telecom services to societies living in the unserved areas.

B. Strategic Approach

 2. What was the solution?
Development and implementation of a public private partnership model, through the establishment of a Universal Service Fund, where the government subsidizes & stimulate the rollout of voice telephony & internet services by telecom service providers in any unserved village that has a population of 5000 inhabitant or less. Villages that has a population of more than 5000 inhabitants have been already served as they are considered economically viable and they part of the service providers' commitments as indicated in their licenses.

 3. How did the initiative solve the problem and improve people’s lives?
As a result of the model, the low populated & unserved areas turned to be economically viable to some extent to the telecom services providers as part of the telecom infrastructure cost is born by the government though subsidies. Projects were awarded in a competitive bidding manner to deploy the basic telecom services to the rural areas.

C. Execution and Implementation

 4. In which ways is the initiative creative and innovative?
In addition to financial subsidy, non-financial support has been also granted to a project winner in any certain geographical areas. Examples of non-financial support granted to a project winner are as follows: allocating more frequency spectrum, providing more facilitations and granting some waivers.

 5. Who implemented the initiative and what is the size of the population affected by this initiative?
Telecommunication has grown to be one of the most successful industries with high standards of performance and growth. Yet, with telecom carriers prioritizing areas and segments where highest margins of profitability can be hatched, many rural and low-income areas and villages had low-performance data infrastructure and, in some cases, left totally unserved (About 21000 villages and 5 million people). In an effort to bridge the gap and insure a fair and balanced deployment of services, the Universal Services Fund initiative was introduced by Communication Information Technology Commission (CITC). This initiative designs, subsidizes, and maintains a reasonably fast and reliable telecom infrastructure for unserved and low-margin areas through a unique collaboration between CITC/USF, representing the government and the regulating entity in the kingdom, and telecom operators.
 6. How was the strategy implemented and what resources were mobilized?
The implementation of such a plan of extended services and geographic locations requires the full utilization of the industry’s best expertise. Therefore, a clear and distinct set of responsibilities were given to the different parties involved in the initiative to ensure effective execution of the plan throughout the several stages of implementation. These responsibilities and expectations included, but were not limited to, the following: Surveying: This task included the collection of data of areas of interest and how much investment there might be needed. Design and implementation of infrastructure: This task includes the technical design of telecom networks, the actual mobilization of engineers and other manpower, and the startup of the service. This was done by telecom carries which utilized its existing capabilities in doing so. Regulation: This is put into place by the CITC/USF and was developed with the unique characteristics and features of the pre-defined areas and affected demographics. Subsidy of initiative: As the projects needed to be subsidized to compensate for the low-margin profit, the government toke the responsibility of subsidizing the initiative.

 7. Who were the stakeholders involved in the design of the initiative and in its implementation?
Ministry of Finance: Providing the funds Ministry of Communication & IT/CITC: Creating and authorizing the USF Mandate USF: Design, organize, and implement the USF Mandate/initiative. Telecom Operators: Implement the physical infrastructure. Technical Monitor: A third independent party (i.e. Swedtel Arabia) to monitor the initiative and the quality of service provided. General Authority of Statistics: provided the general population and housing census.

 8. What were the most successful outputs and why was the initiative effective?
Improving access to services such as (education, medical, banking, ..) services. The initiative created more job opportunities in Rural Areas. Telecommunications opens new markets for rural areas. Telecommunications reduced distance and rural isolation.

 9. What were the main obstacles encountered and how were they overcome?
As the initiative targets ruler areas and villages and due to the diverse geographical nature of the country many obstacles and difficult locations were came across the teams during delivering the telecom infrastructure (mountains, islands, gravel roads, ..) as well as the lack of energy sources which was major barrier. Limited resources which meant that the initiative had to be efficiently designed

D. Impact and Sustainability

 10. What were the key benefits resulting from this initiative?
As the Kingdom of Saudi Arabia moves towards a more e-based service delivery structure for both the private (e.g. banks, insurance, educational services) and public (e.g. Ministry of Interior's Abshir program, Ministry of Labor and Social Development's Ma3an, Hisab Al Muwatin, National Labor Gateway and Telework Programs, Ministry of Commerce & Industry's application for reporting violations) sector services the Universal Service Fund (the “USF”) at the Communications and Information Technology Commission (the “Commission”) has insured that all individuals living in the Kingdom have equal opportunity to access and utilize said services by insuring that they have a technological infrastructure and communication services to participate in all the offered programs. As of 2017, USF has insured that more than 4 Million individuals in 17,742 localities in the rural areas have been given access to the telecommunication infrastructure and grid that allows access to these services for all.

 11. Did the initiative improve integrity and/or accountability in public service? (If applicable)
By providing access to people in the rural localities to e-based services in both the private and public sectors USF has decreased processing time and increased efficiency by providing the foundational platform for streamlining services and eliminating the middle-person that reduces error and redundancy. It also provides a platform that allows for the tracking and documentation of transactions that lends itself to auditing and accountability measures by the various entities.

 12. Were special measures put in place to ensure that the initiative benefits women and girls and improves the situation of the poorest and most vulnerable? (If applicable)
The main target populations under the USF are individuals living in rural areas (less than 5000 individuals). The services is an inclusive one which means that men, women, all age groups and persons with disabilities can all benefit from the service equally and hence be connected to the broader service offerings by the private and public sector. This service has allowed women more access and flexibility to services and opportunities – particularly in rural areas – that may not have been afforded to them prior to USF. An example of new opportunities is the Ministry of Labor and Social Development Telework Program that allows women to work from home utilizing the USF services.

Contact Information

Institution Name:   Universal Service Fund
Institution Type:   Public Authority  
Contact Person:   Mansour Alsohaibani
Title:   Director  
Telephone/ Fax:  
Institution's / Project's Website:  
Postal Code:  

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