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DIALOGUE: Regulatory Frameworks for Improving Access Print E-mail
Written by Abi Jagun, APC and Amy Mahan, LIRNE.NET   
Friday, 19 October 2007
Article Index
DIALOGUE: Regulatory Frameworks for Improving Access
Amy Mahan
Hugo Carrión
Randy Spence
Steve Esselaar
Hernán Galperín
Lishan Adam
Monica Kerretts-Makau
Rohan Samarajiva
Claire Milne
Ismael Peña-López
Hernán Galperín
Profesor | Investigador, Universidad de San Andrés

Despite significant improvements in coverage and adoption over the past ten years, ICT services are not effectively reaching the poor in Latin America and the Caribbean, particularly those living in rural areas. Moreover, several studies reveal that subsidy programs administered by federal governments that compensate the difference between tariffs and cost-recovery levels have proved limited in reducing network deployment gaps.

At the same time, many recent studies point in a different direction. In a nutshell, these studies highlight the role that is being played by a largely unnoticed set of actors we call microtelcos – small-scale telecom operators that combine local entrepreneurship, innovative business models, and low-cost technologies to offer ICT services in areas of little interest to traditional operators. Through a series of case studies in Latin America,* we have documented how microtelcos combine organizational and informational advantages that allow them to service the poor more effectively and with limited access to public subsidies. In fact, we showed that they have done so despite a less than favorable regulatory environment.

Fortunately, the regulatory environment seems to be (slowly) changing in favor of microtelcos. In Peru, the government has recently created a special license for small-scale operators that provides incentives for entry in unattended markets. Telephone cooperatives in Argentina have recently been allowed to provide broadcasting services, thus creating incentives to invest in next-generation multiservice networks  Across the region, regulators are loosening rules for deployment of wireless networks over unlicensed spectrum, thus reducing administrative overhead for local entrepreneurs. These are worth celebrating, though much remains to be done to enable microtelcos their full development potential.

* See Chapter 8 - Microtelcos in Latin America and the Caribbean in Diversifying Participation in Network Development (2007, WDR).