Research - 3rd Cycle - Pro Poor
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In a post-privatisation context, market actors may not choose to service areas that are perceived as unprofitable. Particularly problematic is extending network infrastructure to rural areas where it is costly to extend physical infrastructure and where lower population densities imply reduced demand and hence reduced revenues. It is often claimed that failure to extend the network occurs due to market factors such as lack of economies of scale in extending the network and offering service. However, it is increasingly found that poor and marginalized communities are in fact willing to spend higher amounts on telecom services than in places with already developed infrastructure. And whether or not a profitable market exists, community will to connect to the network implies a universal service obligation to facilitate – or at the very least to remove restrictions which impede – network extension to these unconnected communities.
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