OF SRI LANKA
TABLE OF CONTENT
1 Introduction 4
1.1 Background to the Requirement for a Nationwide
Backbone Network 4
1.2 Key oObjectives for the Proposed Nationwide
Backbone Network 5
1.3 Scope of Consultation 6
Views and comments of interested parties will be taken into account when formulating
the regulatory framework for the deployment of the national backbone network in Sri
Lanka.
4
1 Introduction
This chapter will introduce the purpose and objectives of the consultation exe rcise
turn connected to the SEAMEWE system, thus extending the benefit of the international
long-haul bandwidth deriv ed from the SEAMEWE cable to end-customers of operators
other than SLT.
As discussed above, the demand for broadband connectivity in Sri Lanka and the inability
of existing infrastructure to meet this demand imply that a new, comprehensive, national
backbone network is required.
Issues to be discussed in this section include:
• Background to the requirement for a national communications backbone network
• Details of support from the TRCSL / government for the backbone initiative
• Reasons why a Public Private Partnership (PPP) approach is suitable for this project
• Details of parties involved in this initiative (e.g. World Bank / PPIAF) and their role
1
TRCSL’s requirements for the proposed National Backbone network are stated in its document titled “Country Requirements for the
deployment of the Proposed Optical Fibre National Backbone Network”
6
– open access implies that the Backbone Network must be made available to all
operators under the same terms and conditions and the network owner must not
interfere with traffic over the Backbone Network
– open access to the network is critical to ensuring that all stakeholders can utilise
the Backbone Network to meet their connectivity needs
– open access is also critical for the viability of the National Backbone
– it will be important to specify how and at what levels open access can be achieved
• Next-Generation Network and Services (NGN)
– the backbone network must support the deployment of a next -generation network
in the future and associated services
– NGN network can be easily laid over a DWDM / fibre network
For comments:
This chapter will provide an introduction to the different types of relevant PPP arrangements as
well as provide international case studies of similar projects
This consultation document provides an introduction on deployment of national
backbone network and considers some of the technical, economic and regulatory issues
that may need to be addressed prior to the deployment of national backbone network in
Sri Lanka. Telecommunications Regulatory Commission of Sri Lanka (TRCSL) would like
to seek views and comments from members of the public, industry and equipment
manufacturing industry any or all issues outlined in this document or any other matter
relating to pertaining to the national backbone project.
Views and comments of the interested parties will be taken into account when
formulating the regulatory framework for the deployment of national backbone network
in Sri Lanka.
– therefore, instead of contracting with only one entity to build, own and operate
(BOO) the national backbone network, the TRCSL could elect best of breed
contractors for construction and ownership of different parts of the backbone
network as well as the subsequent operational management of the national
backbone
– alternatively, the network could be split by the various ring s (5 rings proposed;
note that the five proposed rings are not concurrent rings but offer two -span
connectivity)
• A multi-party consortium
– in this model, a consortium comprising of various parties (e.g. operators,
regulator, rights of way owners, etc.) would have joint ownership of the backbone
network and would therefore be jointly responsible for constructing and operating
the backbone network
– consortia can have different ownership structures
. for example, in an egalitarian consortium, all members have equal ownership
(an equal share joint venture arrangement)
. in another consortium, there may be a clear and strong leader (in terms of both
ownership and control) i.e. a leader with a clear mandate supported by a
majority asset share that would be able to maintain sufficient control over the
consortium
The advantages and disadvantages of the above models are shown in the exhibit below.
9
– Bell Canada finished and now owns and maintains both the Base Network and the
EAN 20-year contract with four 5-year renewal terms
– ownership of the EAN will transfer to the Alberta Government at the end of 30
years or it can assume EAN ownership earlier in case of Bell default on revenue
sharing agreement
Worldwide, all of the above types of models have been employed for various backbone
projects. Thus, there is no single model that is dominant and the choice of model depends
on the particular situation and circumstances of a project and the country that it is being
implemented in.
For comments:
3 Regulatory Issues
This chapter will discuss regulatory issues that are pertinent to the proposed project. The chapter
will specify questions / issues on which stak eholders’ views are sought.
Exhibit 2: Current regulation impacting the objectives for the national backbone
network
• National backbone network • Licensing guidelines issued by TRC state that applicants should
must be an island-wide provide proposed infra sharing arrangements so that the service
network coverage area can be increased
• The National Communications Policy recognises the need to
extend telecommunications facilities to rural parts of Sri Lanka
• Sri Lanka’s membership of the WTO implies that there must be a
focus on providing telecom services to rural areas
• National backbone network • Section 12 of the Ceylon Electricity Board Act allows CEB to enter
should utilise existing rights of into contracts to enable other parties to utilize its transmission and
way of CEB and SLGR distribution network
• The Railways Ordinance does not specifically set out any provision
under which the SLGR may acquire or use rights of way for the
purposes of its rail network
• National backbone network • Information and Communication Technology Agency (ICTA) has an
should promote development Information Infrastructure programme
of ICT - ICTA promoted the installation of backbones (Rural Telecom
Network) but this initiative has been stalled
- ICTA also has a backbone initiative called the Lanka
Government Network (LGN)
• ICTA is not playing any direct policy or regulatory role in the
proposed national backbone project
- but its policies that aim to increase the utilisation of ICT will
help to create demand for the proposed national backbone
• National backbone network • The incumbent’s high prices for leasing its network has been
should be cost effective for subject to some regulatory scrutiny so far, but more scrutiny is
operators needed
• In theory, prices for telecoms services including access charges for
backbone capacity leasing are regulated
- TRC must approve charges of all operators
• National backbone network • There is no regulation governing the fee for wayleaves that can be
should be built in a cost- charged by SLGR / CEB
effective manner • BOI status can help to reduce costs of kit significantly
• Operators should have open • Interconnection rules of 2003 state that operators have an
access to the national obligation to provide interconnection to other operators
backbone network • Licenses stipulate that anti-competitive practices are not allowed in
connecting other operators to an operator’s network
One key issue that emerges from the regulatory analysis is that although there is existing
regulation in some areas (e.g. regulation on infrastructure sharing, regulation on
interconnection, regulation on pricing, etc.), such regulation may need to be strengthened
further. For example, the licensing guidelines ask operators to provide details of
infrastructure sharing arrangements but instances of infrastructure sharing remain
limited. This has implications for the proposed national backbone project; if operators are
not under regulatory pressure to share infrastructure, then operators might build out their
separate backbone networks in the same areas, leading to unnecessary duplication.
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Instead, some of these investments could have been diverted towards the proposed
national backbone project.
For comments:
Note: (1) With respect to exact incentives that can be offered to operator s to upgrade their data networks and
rollout in rural areas, these can be discussed during the consultation process (2) Note that feasibility of the
proposed national backbone network depends critically on the lea sing costs of rights-of-way
For comments:
4 Technical Issues
This chapter presents different options for technical aspects of a backbone network. The preferred
option for each technical aspect is highlighted and stakeholders’ views are sought on the same.
2The traffic from various subscribers and LANs has to be aggregated at a location and the aggregated traffic is then taken to one of the
nodes of the Core network. Typically an aggregation network is like a Metro Area Network (MAN) and in some cases it can be a Wide
Area Network (WAN). This network is usually an order of magnitude less in capacity than a Core network. In some unusual
circumstances, an Aggregation network may get connected to another Aggregation Network but it can be done if several small
Aggregation Networks exist quite far from a node of the Core Network. A Core Network consists of interconnected nodes at the highest
level in the hierarchy and has mesh interconnectivity between nodes. The number of nodes is usually quite small. This network has the
highest capacity and consists of only a few nodes.
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Core Network
Scope of the
National Backbone
Network
Aggregation
Network
Access links
The existing backbone network of the incumbent operator, Sri Lanka Telecom (SLT), is not
a comprehensive, nationwide network. The following exhibit shows the current extent of
SLT’s backbone network.
As the above exhibit shows, the fibre backbone network of SLT is largely confined to the
west of the country; there is only one western ring covering major cities like Colombo,
Kalutara, Nuwara Eliya, Kandy, etc. with smaller towns en-route.
SLT has plans to expand its backbone network; it claims that it will complete four fibre
rings by end -2007. However, only the Southern ring is near completion and other rings
like the North East Central Ring and East Uva Central Ring are still being built. SLT is
targeting that 60% -70% of electorates will eventually be covered by its fibre network but it
is expected that it will take a few years before this level of coverage is achieved.
Dialog Telekom is planning a new core backbone fibre network but the construction of
this has not started. Proposed coverage maps for Dialog’s planned network are not
available but it is expected that Dialog will focus on the Colombo region, at least initially.
The following exhibit shows the extent of existing fibre networks in the various districts.
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With the liberalisation of the telecoms sector in Sri Lanka and the significant increases in
demand for telecoms services, the existing backbone networks of incumbents have
become inadequate. Therefore, there is a need to develop an expanded backbone network
that covers not just the western part of the country but other under-served regions
especially the north and the east.
The following exhibit shows the different technical aspects of the backbone network that
must be finalised and the various options for each of these aspects. We would like the
stakeholders to comment on these issues.
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Exhibit 7: Technology Issues and Options for the National Backbone Network
For comments:
• Should the scope of the backbone network be confined to the core network?
• How should scalability and future-proofing be ensured?
• How will backbone deployment plans of existing operators impact the
choice of various technical parameters?
For comments:
• Degree of applicability of each of the main business models in the Sri Lankan
context
• Government ownership of the network
• Appropriate pricing level for capacity on the proposed network
For comments:
6 Implementation Issues
This chapter discusses implementation and governance issues and procedures.
demonstrated track record of similar projects are identified. Network rollout involves the
phased network rollout plan, and the actual monitoring of the rollout to ensure that
objectives are achieved.
The timetable for the implementation of the National Backbone will depend significantly
on the type of organisation which wins the PPP contract and the PPP model that is
selected. If one of the contractors already owns significant backbone infrastructure (e.g.
SLT) and is proposing to incorporate this into the operating company, then the roll-out
timescales will be significantly shorter. Rollout timescales will also depend on how
quickly access to rights of way can be secured.
For comments:
Written comments and views will be posted on the TRCSL’s web site, except where
parties indicate that their submissions, or parts of it, are confidential. Respondents are
kindly requested to submit such confidential information separately, with the relevant
part provided under separate cover and clearly marked.
TRCSL welcomes further views on deployment of the National B ackbone Network that
are not addressed in this consultation document.
All views and comments should be submitted in writing, and in electronic form in
Microsoft Word 2000 version. Please submit your responses by 04th May 2008.
A soft copy of the submission may be e-mailed to the address indicated above.
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Jaffna
Kilinocchi
Southern Ring (Phase 1)
Matale
Puttalam Badulla Batticaloa
Karunegala
Kandy
Kegalle Ampara
Gampaha
Colombo Nuwara-Eliya
Kaluthara Monaragala
Rathanapura
Hambantota
Galle
Matara
As the above exhibit shows, the proposed national backbone network is split in to five
rings: the southern, central and western rings can be built in phase 1, the eastern ring in
phase 2 and the northern ring in phase 3. The phased buildout of the five rings reflects
the relatively greater demand for capacity in the south, centre and west of the country and
therefore the higher priority that is accorded to these areas. Also, the east and north of the
country are conflict zones and therefore the buildout will be slower in these regions; the
network rings in these regions will have to be built in separate, subsequent phases. Note
that the five proposed rings are not concurrent rings. These rings offer two -span
connectivity and so most cities are on a single ring. Therefore, any one location is covered
by a maximum of two spans ensuring 2X redundancy.
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Multiplexing
Transmission (PDH, SDH,
WDM), IP
Backbone
network Fibre,
Physical infrastructure
microwave,
satellite
3 The traffic from various subscribers and LANs has to be aggregated at a location and the aggregated traffic is then taken to one of the
nodes of the Core network. Typically an aggregation network is like a Metro Area Network (MAN) and in some cases it can be a Wide
Area Network (WAN). This network is usually an order of magnitude less in capacity than a Core network. In some unusual
circumstances, an Aggregation network may get connected to another Aggregation Network but it can be done if several small
Aggregation Networks exist quite far from a node of the Core Network. A Core Network consists of interconnected nodes at the highest
level in the hierarchy and has mesh interconnectivity between nodes. The number of nodes is usually quite small. This network has the
highest capacity and consists of only a few nodes.
29
Core Network
Scope of the
National Backbone
Network
Aggregation
Network
Access links
10.1 Uganda
10.1.1 Introduction
Currently, Uganda’s national backbone is owned by UTL, the incumbent operator, and
MTN, the Second National Operator. Both UTL’s and MTN’s backbone will form part of
the East African Backhaul System (EABS). EABS is a joint venture project among
operators from Tanzania, Burundi, Rwanda, Uganda and Kenya. This backhaul system
will link all the five East African Community countries to the EASSy Submarine cable to
be laid along the Eastern African seaboard. 30 operators in Eastern and Southern Africa
are involved with this latter project.
With an understanding to share the backbone infrastructure once it has been built, UTL
and MTN have agreed to roll out backbone network in a complementary manner to avoid
duplication of infrastructure rollout. With existing fibre links to Bugiri, MTN will
complete the remaining fibre link to the Kenyan border by the end of 2008. This will link
up with the Telkom Kenya fibre that will eventually run fro m Malaba to Nairobi to
Mombasa as part of the EABS.
The Ugandan Government is planning to build a national backbone after securing a
US$106m loan from the Exim bank of China in July 2007 and Huawei is the contractor for
this project. UTL and MTN have both expressed concerns over the future use of this
backbone network, which potentially duplicates their existing backbones.
10.2.1 Introduction
KORNET is a domestic internet access infrastructure network established by Korea
Telecom. The service started in June 1994, first in the Seoul area, and currently covers 114
areas nationwide. In addition to the local transmission backbone, international internet
connections have also been established with 15 countries, including a 26Gbps link to the
US to ensure uninterrupted connections.
The backbone links ranges from 45Mbps between local nodes to 40Gbps between major
nodes and covers most residential areas in South Korea. The backhaul is built using a star
topology, extending links from the core nodes, through the regional nodes, to the local
nodes. Two main nodes are established in Seoul (Hyehwa Centre and Guro Centre).
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Each of the regional nodes are then connected to both the main nodes, providing
resilience at the core node level.
The transmission network uses Lucent’s DWDM equipment over a fibre network. The
core switches are combinations of Juniper and Cisco equipment. Riding on this backbone
network, KT offers a range of services in addition to broadband service including internet
connections for corporations at from 1Mbps to 1Gbps, local lease lines up to 2.5Gbps.
10.3 Philippines
10.3.1 Introduction
Philippines has two major backbone networks. PLDT’s DFON was the country’s only
backbone network until 1999, when a consortium formed by alternative operators built
the National Digital Transmission Network (NDTN).
NDTN is majority-owned by BayanTel, with DIGITEL, ETPI, Extelcom, GlobeTelecom,
PT&T, and Smart as co-owners. It is managed and operated by the Telecoms
Infrastructure Corporation of the Philippines (TelicPhil).
PLDT’s DFON is built based on six fibre rings linking up the major cities and regions in
the Philippines. This architecture provides natural redundancy against single point of
failure within a ring. Based on DWDM technology, DFON can transmit up to 10Gbps of
voice and data traffic. Microwave links are also used to complement coverage. Nortel is
the vendor for its latest expansion.
NDTN is also a fibre platform capable of delivering 10Gbps over DWDM using ECI’s
equipment. NDTN is composed of three segments: Microwave Radio in the Luzon,
Submarine Fiber Optic in the Visayas, and Land Cable in Mindanao.
10.4 Japan
10.4.1 Introduction
Japan’s widely-regarded leadership in terms of FTTH deployments was achieved through
the e-Japan national initiative. A combination of tax breaks, debt guarantees and partial
subsidies (without a requirement for structural separation) created the right incentives
and environment enabling self-regulation by the private sector and fulfilment of the e-
Japan objectives on schedule.
The Government used a combination of tax breaks, debt guarantees and partial subsidies.
For encouraging rollout in the urban areas, companies were allowed to offset one-third of
their development costs on first-year taxes and the Government guaranteed their debt
liabilities. For encouraging rollout in the rural areas, municipal subsidies covering
approximately one-third of the costs were given to operators that provided open access
network s. In total, US$16.7bn was allocated for the project which also included the
digitisation of Government and education services.
10.5 Australia
10.5.1 Introduction
In June 2007, the Australian Government announced funding of A$958m and a legislative
initiative called Australia Connected, which will deliver broadband access for all
Australians. Australia Connected is the rollout of a new, independent, competitive and
state of the art national broadband network that will extend high speed services out to 99
per cent of the population and provide speeds of 12Mbps by mid 2009
OPEL, a joint venture between Optus and Elders, is the successful bidder this project.
Upon completion, the structurally separated OPEL will provide access to all service
providers in the market on an open and transparent basis.