Achieving the Sustainable Development Goals to end extreme poverty by 2030 will require about $4.5 trillion annually, far more than multilateral development banks or donors can provide by themselves. To face this challenge, the World Bank Group adopted the MFD approach, which entails working with governments to crowd in the private sector while optimizing the use of scarce public resources. This approach is guided by the Hamburg Principles adopted by the G20 in 2017 and builds on the substantial experience across the institution.
The Union of the Comoros, an archipelago off Africa’s east coast with high levels of poverty, sought to improve communications, trade, and economic opportunities by expanding mobile communications and internet services. With support from the World Bank Group, the government liberalized the telecommunications sector, held an international tender, and awarded a second telecoms license. Through competition, Comoros now has better quality and cheaper telecoms services, as well as broader coverage. In a country with scarce government resources, the World Bank’s $32 million has made a substantial contribution by leveraging over $90 million in telecoms licensing fees and infrastructure investment.
In 2013, Comoros was one of the few countries worldwide with a telecoms monopoly. The state-owned enterprise, Comores Télécoms, charged customers a high price but provided poor services. Consequently, only 40 percent of the country’s 800,000 people had mobile service, and less than 1 percent had broadband internet. To improve services and citizens’ access, the authorities sought, with IFC advice, to privatize Comores Télécoms; but in 2014, political disagreement halted passage of the necessary legislation. Instead, with World Bank support, the authorities held an international tender, and in 2015 awarded a second telecoms license to the highest bidder—Telma Comores.
The MFD Approach
Since 2013, the World Bank Group has supported Comoros’ efforts to improve its telecoms sector. This has included advising on legal and regulatory reforms, the privatization of Comores Télécoms, and an international tender for a second telecoms license; co-financing an undersea cable; stimulating demand by subsidizing internet connectivity; and lending Telma Comores €13 million so that the company can expand its network nationwide.
Improving the Regulatory and Institutional Framework
In 2013, a World Bank project began helping the Comoros’ authorities improve mobile phone and internet access, quality, and prices. As research has shown, improving telecoms access has economic as well as social benefits. For example, a 2009 World Bank study of 120 developing countries found that a 10 percent increase in broadband penetration resulted in gross domestic product rising 1.38 percent.
The Comoros project addressed telecoms from several angles. The World Bank and IFC advised the government on liberalizing the sector, including by supporting development of the 2014 Communications Act. Later, in collaboration with regional operators, the World Bank co-funded a submarine cable to connect Comoros to the island of Mayotte, with possible extension to Madagascar. To stimulate broadband internet demand, the World Bank is subsidizing services for schools, universities, community associations, and local government. Also, to help increase tourism sector growth, the World Bank is advising on a system to offer online visas. In addition, it is helping to digitize public administration.
The PPP Program
To improve telecoms access, quality, and prices, and thus boost economic development, starting in 2012, IFC advised the government on how to privatize Comores Télécoms, the country’s largest employer. However, in the political context at that time, privatization proved to be difficult. Instead, in 2015, with World Bank support, the Comoros’ telecoms regulator (ANRTIC) held an international tender for a second telecoms license. This attracted African bidders Telecom Malagasy S.A. and Mauritius Telecom, and international firms, including France’s SFR.
In October 2015, Telma Comores, a subsidiary of Telecom Malagasy S.A., won the bid at a cost of $16 million for the license fee. The company launched its operations in 2016, and within a year had gained a quarter of the telecoms market. So that Telma Comores can extend its network nationwide, in January 2019, IFC loaned the company €13 million to support its expansion program.
Making a Difference
The launch of Telma Comores has expanded telecoms services in Comoros, giving people high quality 4G LTE (fourth-generation long-term evolution) mobile broadband technology at lower prices. In response to this competition, Comores Télécoms has launched an even faster 4.5G network. By 2018, mobile broadband subscriptions rose to 58 per 100 inhabitants, and coverage is on track to provide all citizens with broadband mobile phone and inter- net services by 2030.