Governments ‘sit on telecom funds’

MOBILE networks will cover 90% of the world’s population by 2010, up from 80% today, despite the hindrance of misplaced government policies to subsidise the growth of fixed networks rather than cellular systems, says industry body the GSM Association.

Governments have collected more than $6bn from the telecoms industry to fund universal service obligations, with $2bn of that from mobile operators. Yet only $1,5bn has been handed out, and only $75m was used to extend mobile coverage, even though the cost of providing mobile coverage to an individual is one-tenth of the cost of a fixed line connection.

Despite the beneficial effect telecoms has on developing economies, governments have yet to allocate $4,4bn collected by their universal service funds, the association said. If the $4,4bn was used to extend mobile networks, another 450-million people in rural areas could be covered.

SA is among the non-spending culprits with misguided policies, according to telecoms consultant Paul Cole. SA’s telephony remains among the dearest in the world despite the creation of the Universal Service and Access Agency. In 2002, operators handed over R280m of their total revenue of R56bn for use by the agency, but the communications minister capped its budget at R50m, Cole said in a report.

At its current rate of spending, the agency would take 1500 years to hit a target of taking fixed lines to 20% of the population, at a cost of R80bn. Cole agreed that poor policies were a problem, as they focused on fixed line services and failed to recognise that mobile technologies could do the job faster and more cheaply.

The Association also said governments should help to connect people who were already covered but could not afford the services.

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Governments ‘sit on telecom funds’