Information and Communication Technology

Any economy that aspires to compete effectively in the globalised world and become a knowledge-based one needs to be better connected to Telecommunications, Media and Technology than most other countries in the world. Affordable, high-speed, high-capacity broadband infrastructure (often referred to as ‘digital infrastructure’) is fundamental to that connectivity. 

Beyond the economy, the availability of effective and affordable digital infrastructure is also increasingly a key conduit of modern society, in terms of entertainment, learning, healthcare, civic and social cohesion.

Governments throughout the world (including in EBRD regions) have sought to develop and adopt policies and strategies aimed at accelerating the deployment of effective and affordable broadband infrastructure.  But ensuring the deployment and continuing availability of such broadband infrastructure remains a challenge in many countries worldwide. The core of this challenge is the need to maximise the commercial viability of effective broadband infrastructure supply through ensuring a market-led competitive environment, while also providing the supply of comparable broadband infrastructure to those areas where market failure means such supply might not be commercially viable in the short-to medium term.

The LTP's role

A key part of the EBRD portfolio is focussed on financing and investing in TMT sector companies. Running in tandem with these finance and investment activities, the Legal Transition Team (LTT) offers a wide-ranging programme of support to sector policymakers and regulatory authorities in developing and maintaining a sector policy, legal and regulatory environment which is sufficiently conducive to retaining and attracting the levels of investment necessary to build world-class TMT sectors. The TMT sector is broad-ranging and impacts virtually all sectors of human endeavour. But one of LTT’s primary areas of focus is the infrastructure and connectivity which underpins the delivery of all ICT services. The LTT is increasingly concentrating efforts on building a comprehensive support programme which will act to accelerate broadband connectivity within and amongst the economies EBRD invests in.

The EBRD, through its Legal Transition and Information Communication Technology teams, has developed a refinedoffering entitled the 'Accelerating Broadband Connectivity' initiative (better known as the 'ABC Initiative'. The ABC Initiative brings together EBRD's existing commercial financing and investment in the ICT sector with LTT's longstanding Electronic Communications Regulatory Development Programme to offer an integrated suite of technical and/or financial support based aroung six main pillars of support, each available to relevant market participants.

We offer this support to policymakers, regulatory authorities and relevant stakeholders throughout our regions, by the following means:

Under the Legal Transition Programme of the European Bank for Reconstruction and Development (the “EBRD” or the “Bank”), the Bank's Legal Transition Team has focused part of its work on the development of detailed analytical assessments of the state of legal transition in a number of commercial and financial sectors of EBRD regions. Traditionally these assessments have benchmarked the developments in these sectors in each country against recognised international best practices, providing analysis of the existing legislative and regulatory framework, comparison of that framework with best practice and the identification of gaps and legal and regulatory reform needs. More recently, assessment activities have also evaluated sector policy, law, regulation and practices through the prism of investor perception, examining the expectations and experiences of existing and potential investors into the ICT sector (particularly broadband infrastructure) in the countries surveyed.

Survey of Investor Perceptions and the Broadband Sector (2020)

The Legal Transition Team has carried out regular assessments of the telecommunications/ICT sector in its regions. These assessments have focused on the overall potential of the sector for reforms that could improve the broader investment climate in the sector, in particular, to improve the reach, quality and affordability of infrastructure for delivering modern broadband services. The previous assessment approach used by EBRD has been to study key characteristics of the market, in terms of output metrics (for example broadband penetration, eGovernment and eCommerce world rankings) alongside a comparison between the legal and regulatory framework and best practice in the sector. The methodology relied on building an accurate picture from the outputs of the sector itself alongside on the policy, legal and regulatory environment for investors, service providers and consumers.

Taking an investor’s view

For 2020, we have taken a different approach, one in which the informed views of investors has the most impact. Specifically, we have recorded directly the views of a wide range of existing and potential stakeholders in investment in broadband infrastructure and service, including finance providers, telecommunications network and service operators, broadband and internet service providers, analysts and other market stakeholders.

“Broadband investment” embraces telecommunications infrastructure and connectivity (fixed and mobile networks) and the services (both retail and wholesale) that are delivered over these networks (voice, internet, data, media and broadband services). This definition is used within the context of the key purpose of this survey – to promote broadband infrastructure investments.

In addition, the survey team has researched and held wider discussions regarding the overall policy, legal and regulatory conditions used by the relevant authorities in each country. In this way, we have attempted to match the effectiveness of the relevant conditions in each country to investor needs.

Stakeholders generally use benchmarks to compare the conditions in their country alongside the conditions achieved in neighbouring countries and regions, notably the EU. The EU is generally perceived to be an open and effective marketplace for ICT investments. The EU’s current legal and regulatory framework (“The European Electronic Communications Code”) is viewed by investors as an enabler to overcome the most commonly faced problems in the competitive ICT markets.

Other factors are used in our surveys that could be useful to investors in deciding on which countries to focus on now and in the future. The most important of these other factors are the relative achievements, expressed in terms of each country’s current standing in published world rankings. For example, the International Telecommunications Union (ITU’s) ICT Development Index and world rankings are used alongside their published data for fixed and mobile broadband penetration and internet usage. 

Respondents’ views of the policy, legal and regulatory enablers for broadband infrastructure investment have led us to identify the gaps in policy implementation. The action areas we recommend for each country are shown toward the end of the report.

The approach is based on investors’ immediate concerns in terms of which factors in each country contribute most to decisions on whether to invest or not. The results have therefore identified the countries that have the most attractive markets and policies for encouraging investment, particularly for broadband infrastructure and connectivity. The survey outputs, in the form of a ranking of investment attractiveness and a listing of the key investment risk factors, are intended not only to inform investors, but also to prompt policy makers to consider reforms that would improve investment conditions in their countries. 

The main output of the survey is a ranking of countries, based on their investment attractiveness, with further explanations for each country giving the main reasons expressed by investors that have led to the index and ranking calculated.

Countries included in the survey

The countries we intend to include in the 2020 survey are:

• From the Southern and eastern Mediterranean (SEMED) region: Egypt, Jordan, Lebanon, Morocco and Tunisia
• From the South eastern European countries (SEE) region: Albania, Bosnia and Herzegovina, Croatia, Kosovo, Montenegro, North Macedonia and Serbia
• From the Eastern Europe and the Caucasus (EEC) region: Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine
• From the Central Asia region: Kazakhstan, Kyrgyz Republic, Mongolia, Uzbekistan

The reports from the SEMED and SEE regions can be found below, on an individual country basis and contained in two regional reports.