Regions and Countries

	Table of Contents
p. 12 of 20 BACK | NEXT I. Introduction II. Background and Rationale III. Economic and Social Trends IV. Program Review - Lessons Learned V. Strategic Directions of the GMS Program for 2001-2003 VI. Sector Properties and Proposed Program for 2001-2003 A. Transport B. Energy C. Telecommunications D. Tourism E. Environment F. Human Resource Development G. Trade H. Investment VII. ADB's Operational Program VIII. Coordination with Donor Agencies and Regional Institutions IX. Cofinancing and Catalyzing External Resources

GMS Assistance Plan : VI. Sector Properties and Proposed Program for 2001-2003

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C. Telecommunications

77. The high correlation between poverty and access to telecommunications is increasingly becoming apparent with the rapid expansion of the Internet. The development of the telecommunications sector throughout the GMS countries will help address the issue of the so-called "Digital Divide", i.e., the affluent members of society in the urban areas have more opportunity than the poor to access the Internet and take advantage of new technologies and services. The price of telecommunications service in most of the GMS is high, making such service less accessible and affordable. An efficient telecommunications network linking poor border areas will not only facilitate transfer of information at reduced cost, but will also help increase trade and production, and, thereby, empower minorities and rural communities.

78. Subregional cooperation in the telecommunications sector will give the GMS countries the opportunity to maximize the benefits to be derived from telecommunications technology. A total of 13 transmission links originally grouped into three loops (East, West, and North) and improved interconnection have been identified for priority implementation. These 13 priority networks have been regrouped into a two-phased project, namely, the Telecommunications Backbone Project - Phases 1 and 2.

79. The strategic thrust of the telecommunications sector under the GMS Program for 2001-2003 is to expedite the development of "backbone" transmission lines with a view to maximizing the development impact of these networks on poverty reduction. Efforts will be made to promote a secure and stable policy environment to mobilize private sector investment. Phase 1 of the backbone involves sections of four of the priority networks, one new connection, and five new networks for upgrade and improvements, with a combined cost of about $50 million (in 1998 prices). It also includes two studies related to implementation, and four institutional strengthening projects with a combined cost of about $12 million (in 1998 prices). Phase 2 involves sections of seven of the priority networks, and upgrade and improvements of existing networks, with a combined cost of about $96 million (in 1998 prices). It also includes three studies related to implementation with a combined cost of over $4 million (in 1998 prices).

80. ADB small-scale technical assistance is being provided to update the feasibility study on Phase 1 involving Cambodia, Lao PDR, Viet Nam, and Yunnan Province, including assessment of possible social and environmental impacts¹⁴ . ADB has been requested by the six countries to help mobilize resources for Phases 1 and 2 of the Telecommunications Backbone Project. This assistance will include financing and arranging cofinancing for the construction of the optical fiber "backbone" network, as well as removing the regulatory impediments in the GMS.

81. To partly finance the construction of Phase 1, ADB's proposed additional lending pipeline for the GMS Program for 2001 includes loans to Cambodia, Lao PDR, and Viet Nam amounting to some $40 million combined since a portion of the project cost is expected to be cofinanced. ADB will also mobilize technical assistance grants to assist the GMS countries in reviewing the telecommunications policy in the GMS and establishing or enhancing the regulatory framework. For this purpose, regional technical assistance grants amounting to some $2 million and $1.3 million have been included in the ADB's pipeline for the GMS Program for 2001 and 2002, respectively. Cofinancing from other donors for Phase 1 as well as for the other studies for improving the regulatory framework, will be explored.

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