Connectivity for rural development with emerging technology
Connectivity for rural development with emerging technology
Business Model Description
Accelerate the closure of the connectivity gap by providing Internet connectivity services to hard-to-reach, rural, and suburban areas through leveraging recent innovations in communications and telecommunications services.
Expected Impact
Investment in telecommunications infrastructure will reduce the digital divide of the Dominican population.
How is this information gathered?
Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.
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Country & Regions
- Cibao Norte
- Cibao Sur
- Cibao Nordeste
- Cibao Noroeste
- Valdesia
- El Valle
- Enriquillo
- Yuma
- Higuamo
- Ozama
Sector Classification
Technology and Communications
Development Need
The digital divide persists in the DR. 91.7% of Households have access to an ICT device/service (1). However, only 56% of households have a fixed Internet connection (2). This limits their productive development and opportunities for access to quality services because they are on the margins of technological development, with this gap being greater in rural areas (3).
Policy Priority
The National Development Strategy establishes in its specific objective 3.3.5 to achieve universal access and productive use of ICTs (4). Likewise, it established its roadmap towards digital transformation embodied in the Digital Agenda 2030 (5).
Gender Inequalities and Marginalization Issues
Only 39% of women were employed in the ICT sector in 2018 representing a high gap in access to specialized work considering that this is a high-income sector (6). By 2021, the enrollment of women in the ICT knowledge area represented 21.6% in contrast to 78.4% of men enrolled in higher education (7).
Investment Opportunities Introduction
This sector represents an attractive high-growth market with great potential for investment. In 2022, the communications sector had a growth rate of 4.6% in its contribution to GDP (8). In addition, the flow of foreign direct investment to the telecommunications sector in 2022 totaled USD 191.9 million (9).
Key bottlenecks Introduction
High infrastructure costs represent one of the main bottlenecks in projects related to telecommunications services. Regulatory issues such as licensing and spectrum allocation may limit investment projects in this sector (10).
Telecommunications
Development Need
The Dominican Republic needs an estimated CAPEX investment, both fixed and mobile, totaling USD 872,671,618.37 million to generate 315 thousand jobs and close the digital gap that exists in comparison with OECD member states. According to the Broadband Development Index, this country ranked 52nd out of 65 countries in 2020 (11).
Policy Priority
The Digital Agenda 2030 prioritizes in its Connectivity and Access pillar the objective of connecting all Dominicans to affordable broadband internet to close the digital divide and the development of an inclusive digital economy (12). This is supported by other policies such as the establishment of the national broadband plan and infrastructure (13) (14).
Gender Inequalities and Marginalization Issues
Women in vulnerable situations and in areas with low levels of access and connectivity may contribute to higher levels of inequality. On average, women are less likely to have access to a cell phone. The latter being an essential tool for combating inequality (15).
Investment Opportunities Introduction
Between 2010-2017, public investment in telecommunications infrastructure averaged 0.001%. of GDP (13). In 2021, telecommunications investments increased by 66% with a calculated dollar estimate of USD$ 372.16 million (16).
Key Bottlenecks Introduction
The incorporation and regulatory compliance processes could slow down the implementation of the investment (10).
Telecommunication Services
Pipeline Opportunity
Connectivity for rural development with emerging technology
Accelerate the closure of the connectivity gap by providing Internet connectivity services to hard-to-reach, rural, and suburban areas through leveraging recent innovations in communications and telecommunications services.
Business Case
Market Size and Environment
17 communities to establish internet access, distribution and wholesale internet networks (20).
The rural and semi urban areas with the lowest quality of life index have been selected to establish the pilot projects because they lack of broadband infrastructure (21).
Indicative Return
The Conectar a los No Conectados project is an initiative with 3 components: 1) access and infrastructure; 2) demand subsidy; and 3) social appropriation and skills development. For this case, the infrastructure component has an estimated budget of US $800,000 (20).
Investment Timeframe
Short Term (0–5 years)
Projects are advertised through public bidding and the estimated execution time is 24 months (22).
Ticket Size
USD 500,000 - USD 1 million
Market Risks & Scale Obstacles
Capital - Limited Investor Interest
Impact Case
Sustainable Development Need
Only 46.1% of households in the Dominican Republic have access to fixed Internet (16).
Gender & Marginalisation
According to ENHOGAR 2021, considering the population residing in rural areas, 26.8% indicated that they used a computer and only 75% used the Internet (24).
Expected Development Outcome
Increase the percentage of households with access to fixed internet in the Dominican Republic.
Develop telecommunications infrastructure that will in turn increase economic activity in depressed areas.
Gender & Marginalisation
Reduce the digital divide in the Dominican Republic by increasing the percentage of the rural population with access to telecommunications services such as internet and telephone.
Primary SDGs addressed
9.c.1 Proportion of population covered by a mobile network, by technology
In 2018, The population covered by at least one mobile network was 99.15% (25).
Increase the number of residents connected to broadband internet, the population's capabilities in digital technologies and to digital technologies and leave an integrated digital ecosystem (26).
17.8.1 Proportion of individuals using the Internet
The percentage of the population aged 10 years and older that used the Internet in the three months prior to the survey was 84.4% (1).
Increase the percentage of people using the Internet, from 74.82 to 90.69 (26).
Secondary SDGs addressed
Directly impacted stakeholders
People
Gender inequality and/or marginalization
Corporates
Public sector
Indirectly impacted stakeholders
People
Gender inequality and/or marginalization
Planet
Corporates
Public sector
Outcome Risks
Access to infrastructure does not mean access to the Internet and its appropriate use if it is not accompanied by ICT skills-building programs (19).
Gender inequality and/or marginalization risk: Increase the number of cases of cybercrime or cybercrime cases towards vulnerable population.
Impact Risks
The non-functioning and service continuity of the infrastructures implemented for access to telecommunications services in the various selected communities could affect the reliability of the service.
Limited access to electricity would affect the continuity of the project's business model in the implemented localities.
Impact Classification
What
Increased accessibility to telecommunications services.
Who
Regions without access to quality, high-speed telecommunications services.
Risk
Failure to develop the project could lead to an increase in the digital divide and inequality in the Dominican Republic.
Contribution
Increase in the supply of Internet access and telephone services.
How Much
Expansion of telecommunications infrastructure in 17 communities in areas of low ICT development.
Impact Thesis
Investment in telecommunications infrastructure will reduce the digital divide of the Dominican population.
Enabling Environment
Policy Environment
National Development Strategy 2030 creates the primary conditions that favor the synergy between public and private actions for achieving the Nation's Long-Term Vision and the Strategy's Objectives and Goals (4).
The Digital Agenda 2030 established as a national priority to expand the national fiber optic network (5).
Presidential Decree 539-20 establishes a national priority to define a National Broadband Plan to guarantee universal access to last-generation internet and the productive use of ICT (13).
Financial Environment
Foreign investors, whether natural or legal persons, have the right to remit abroad, in freely convertible currencies, without the need for prior authorization (31).
Other incentives: Residence Permits for Investment Program, through an agreement with the General Directorate of Migration, having as a prerequisite the Certificate of Registration of Foreign Direct Investment (31).
Regulatory Environment
Law No. 47-20 on Public-Private Partnerships establishes the regulatory framework that regulates the initiation, selection, adjudication, contracting, execution, monitoring, and termination of public-private partnerships throughout the national territory (28).
Law No. 344-43 on Expropriations, which grants the Executive the power to authorize the expropriation of property for duly justified reasons of public utility or social interest (29).
Law No. 153-98 – General telecommunications that created the Dominican Institute for Telecommunications to regulate the telecommunication sector (30).
Marketplace Participants
Private Sector
Telecommunications companies (e.g. Claro, Viva, Wind, Altice).
Government
The Dominican Institute of Telecommunications (INDOTEL), Dominican Electric Transmission Company - ETED and Governmental Office for Information Technology and communications - OGTIC, DGAPP, DGCC and others.
Multilaterals
Interamerican Development Bank, International Telecommunications Union, World Bank and others.
Non-Profit
Association of companies in the communication and technology sector (Comtec).
Public-Private Partnership
Potential or existinf PPAs that might have an impact on rural connectivity.
Target Locations
Cibao Norte
Cibao Sur
Cibao Nordeste
Cibao Noroeste
Valdesia
El Valle
Enriquillo
Yuma
Higuamo
Ozama
References
- (1) ONE, 2023. National Multi-Purpose Household Survey 2022. https://www.one.gob.do/publicaciones/2022/encuesta-nacional-de-hogares-de-propositos-multiples-enhogar-2022-informe-basico/?altTemplate=publicacionOnline
- (2) Srinivasan, S. et al., 2022. Internet access and use in Latin America and the Caribbean. Results of the LAC High Frequency Telephone Surveys 2021. https://www.undp.org/sites/g/files/zskgke326/files/2022-09/undp-brlac-Digital-ES.pdf
- (3) IBD, 2021. DR-L1147: Program to Improve Connectivity for Digital Transformation in the Dominican Republic. https://www.iadb.org/en/project/DR-L1147
- (4) Law 1-12 National Development Strategy 2030. https://mepyd.gob.do/estrategia-nacional-de-desarrollo-2030/
- (5) Agenda Digital 2030 – República Dominicana. https://agendadigital.gob.do/documentos/
- (6) ONE, 2020. Survey of Human Resources Demand in Information and Communication Technology and University Business Cooperation in the Dominican Republic 2019. https://www.one.gob.do/publicaciones/2020/encuesta-demanda-de-recursos-humanos-en-la-tecnologia-de-la-informacion-y-la-comunicacion-y-cooperacion-empresarial-universitaria-en-la-republica-dominicana-2019/?altTemplate=publicacionOnline
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- (8) Banco Central, 2023. Dominican Economic Report 2022. https://cdn.bancentral.gov.do/documents/publicaciones-economicas/informe-de-la-economia-dominicana/documents/infeco2022-12.pdf
- (9) ProDominicana, 2023. Report on foreign direct investment performance in the Dominican Republic year 2022. https://datamarket.prodominicana.gob.do/Documentos/2022%20-%20Comportamiento%20de%20la%20Inversi%C3%B3n%20Extranjera%20Directa%20en%20Rep.%20Dom..pdf
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- (12) Agenda Digital 2030 – Connectivity and Access Pillar. https://agendadigital.gob.do/ejes/conectividad-y-acceso/
- (13) Decree No. 539-20 which orders the preparation of a National Broadband Plan (PNBA). https://presidencia.gob.do/decretos/539-20
- (14) MEPYD, 2020. National Infrastructure Plan 2020-2030 https://mepyd.gob.do/wp-content/uploads/drive/DIGEDES/Publicaciones/Plan%20Nacional%20de%20Infraestructura.pdf
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- (16) INDOTEL, 2022. Annual Telecommunications Performance Report 2021. https://transparencia.indotel.gob.do/wp-content/uploads/2022/12/informe-desempeno-de-las-telecomunicaciones-2021.pdf
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- (21) Indotel, 2023. Contracting of one (1) company for the installation of satellite internet kits in public educational centers of the access and infrastructure component of the biannual plan of development projects 2021-2022 "connecting the unconnected". HTTPs://transparencia.indotel.gob.do/wp-content/uploads/2023/03/Pliego-de-Condiciones-Infraestructura-en-Escuelas-.pdf
- (22) Indotel, 2023. Monitoring and Budget Report for the Transparency Portal: project to connect the unconnected. https://transparencia.indotel.gob.do/wp-content/uploads/2023/07/0_abril_junio_2023_conectar_a_los_no_conectados_pb_21_22_final.pdf
- (23) World Bank, 2018. Innovative Business Models for Expanding Fiber-Optic networks and closing the access gaps. https://documents1.worldbank.org/curated/en/674601544534500678/pdf/Main-Report.pdf
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- (25) Comisión ODS. 9.c.1 Proportion of population covered by a mobile network, by technology http://ods.gob.do/Indicador/Index/121?fromMenu=True
- (26) National Multiannual Public Sector Plan 2021–2024. https://mepyd.gob.do/publicaciones/plan-nacional-plurianual-del-sector-publico-2021-2024
- (27) World Bank, 2022. Rural population (% of total population) – Dominican Republic. https://datos.bancomundial.org/indicator/SP.RUR.TOTL.ZS?locations=DO
- (28) Law 47-20 on Public-Private Partnerships. https://dgapp.gob.do/wp-content/uploads/2020/09/LEY-47-20.pdf
- (29) Law No. 344-43 on Expropriations. https://drlawyer.com/espanol/leyes/ley-344-de-1943-que-establece-un-procedimiento-especial-para-las-expropiaciones-intentadas-por-el-estado-el-distrito-de-santo-domingo-o-las-comunes/
- (30) Law No. 153-98 – General telecommunications. https://transparencia.indotel.gob.do/wp-content/uploads/2022/10/ley-no-153-98-ingles-1.pdf
- (31) Law No. 16-95 on Foreign Investment. https://prodominicana.gob.do/wp/wp-content/themes/ceird/ceirdpdf/Ley-16-95-sobre-Inversion-Extranjera.pdf
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