Can the Balkans have a data highway like the Baltic?

The Baltic Highway was created by Data Logistics Center (part of Lietuvos Energija, a state-owned holding company of Lithuanian energy suppliers), Latvenergo (a state-owned electric utility company in Latvia) and Televõrk (a subsidiary of private energy firm Eesti Energia in Estonia). Unlike previous data highways, this network was built by laying optical fiber over high-voltage electricity lines and gas pipelines that belong to energy companies, as opposed to using different segments of telecommunications networks that have been “stitched together.” Today, Baltic Highway clients have the opportunity to utilize one seamless regional infrastructure system from a single point.

What would it take to implement a similar project in the Balkans?

There are many parallels between the Baltics and the Balkans. All energy companies in the Western Balkans own fiber assets. All countries in the region are seeking European Union (EU) accession and are in the process of harmonizing their telecommunications regulatory frameworks with EU acquis, which, among others, promotes infrastructure sharing*. Given that increased regional cooperation yields multiple socioeconomic benefits and could be seen as a means to help heal the wounds inflicted by the region’s traumatic history, one can’t help but wonder why the Balkan Highway has not yet emerged in the region.

Instead of making that kind of leap, Western Balkan countries are underutilizing their available fiber capacities; regional telecommunication infrastructure is patchy, and regulatory frameworks in the six Balkan countries are unsynchronized. In many instances, the fiber deployed by local utility companies is not even being shared on a national level, and there are no regional cross-border initiatives.

While working on the publication analyzing the state of broadband networks in the Middle East and North Africa**, a World Bank team asked telecommunications companies from the Middle East why no one is trying to reach European internet hubs through the Balkans. The answers were quite conclusive: the local regulatory frameworks and infrastructures cannot make a viable business case. This is a clear call for greater regional integration including through infrastructure sharing.

Unleashing energy infrastructure sharing could be a pragmatic starting point to move ahead in telecommunications sector development. The Baltic Highway could be a replicable model for the Western Balkans to follow, although quite a bit of work needs to be done:

• First, building awareness of the infrastructure-sharing benefits for utility companies;
• Second, establishment of a regional dialogue on the issue area; and
• Third, harmonization of the regulatory regime for infrastructure sharing.

Global experience proves that it’s a worthy undertaking. Where available, infrastructure sharing leads to more effective use of energy infrastructure assets. It has also accelerated deployment of telecommunications networks — in particular across borders — at lower cost, faster pace and in a more environmentally friendly manner, while also routing investment toward underserved areas.

It has proven to enhance competition and product innovation in the telecommunications market, while also facilitating improvement in customer service provision in the energy sector. Additionally, the fiber infrastructure owned by energy utilities usually has higher protection standards and could not be, for instance, accidentally damaged by construction work, which is often the cause of cable cuts.

Kosovo as a testing bed for infrastructure sharing in the region
With the financial support from the Private-Public Infrastructure Advisory Facility (PPIAF)***trust fund, our team launched a technical assistance activity to support Kosovo’s Ministry of Economic Development of Kosovo (MED) in its efforts to advance its infrastructure sharing agenda. The activity will last until the end of December 2015, and will have two main beneficiaries: the Ministry’s Department of Post, Telecommunication, Information and Communication Technology, and the Electricity Transmission System and Market Operator of Republic of Kosovo (KOSTT). Local telecommunications operators will also benefit by getting access to reliable wholesale boradband services.

The first objective of this activity is to facilitate access to information on the existing communication infrastructure of public utility companies. We will accomplish this through provision of technical advisory support to develop an Electronic Broadband Infrastructure Atlas and an infrastructure sharing regulatory review. The Atlas will use the Geographical Input System (GIS), which will not only store information on the infrastructure deployed by telecommunication operators, but also infrastructure deployed by utility companies. This could potentially be used to facilitate the deployment of telecommunication networks through infrastructure sharing agreements.

The second objective of the activity is to provide an objective analysis of the Kosovo broadband internet market’s dynamics, which would forecast demand for broadband infrastructure services based on consumption patterns and other factors. Finally, the third objective is to streamline KOSTT’s infrastructure sharing by developing a costing model, conducting sensitivity analysis and reviewing the company’s business and operational plans.

Western Balkan countries can substantially gain from their geographical position — as a “bridge” between the Aegean and Adriatic seas — that is advantageous in linking the EU’s south to the west, and providing alternative routes to Turkey and the Middle East to Western Europe.

There are many parallels between the Baltics and the Balkans. Let’s hope that one day the two regions will get connected through a high-speed Balkan data highway

* Infrastructure sharing could be seen as a regulatory incentive to develop underserved areas as much as to stimulate the roll-out of high-speed alternatives to already existing telecom backbone networks with an aim to benefit big data operators (large corporate customers, financial institutions, wholesale carriers, and so on). Infrastructure sharing is commonly implemented in the energy and transport sectors; its basic principle lies in opening access to fiber optics assets of linear infrastructure networks – oil and gas pipelines, electricity grids, roads and railways – to Internet Service Providers on a commercial basis. Energy and transport infrastructures usually have fiber optic cables, ducts, and towers for their own use, however those are usually used only at a fraction of capacity, which makes commercial infrastructure sharing reasonable and mutually beneficial.

** The full publication “Broadband Networks in the Middle East and North Africa: Accelerating High-Speed Internet Access” could be downloaded here:https://openknowledge.worldbank.org/handle/10986/16680

*** The Public-Private Infrastructure Advisory Facility (PPIAF) is a multi-donor trust fund that provides technical assistance to governments in developing countries in support of the enabling environment conducive to private investment, including the necessary policies, laws, regulations, institutions, and government capacity.

This article is published in collaboration with The World Bank’s Information and Communications for Development Blog. Publication does not imply endorsement of views by the World Economic Forum.

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Author: Natalija Gelvanovska joined the World Bank in 2012 as a Senior ICT Policy Specialist. Zhenia Viatchaninova is an ICT consultant specializing on implementation of open data and open government projects in the Russian Federation.

Image: Internet LAN cables are pictured in this photo illustration. REUTERS/Tim Wimborne.