Progress has been made toward building and managing Universal Service Funds (USF) in a bid to connect previously underserviced African rural areas and communities.
This is according to Matthew Dawes, deputy manager of international events and business development at the Commonwealth Telecommunications Organisation (CTO).
This statement comes after the CTO, in conjunction with the Communications Commission of Kenya, organised and hosted the second annual ICT conference aimed at connecting rural communities in Africa.
USFs are funded by taxes levied on telecommunications services, which are then used to fund and subsidise telecommunications infrastructure for remote and rural areas.
Nine officials, representing nine African government agencies, met prior to the conference to explore the status of the development of USF agencies.
The agencies are preparing to form an association, to be known as the Communications Universal Service Forum, in order to streamline their efforts and share their experience, explains Dawes.
"The officials agreed on the need to formally share experience among Commonwealth countries to speed up the expansion of services to the rural areas."
The officials were from Nigeria, Ghana, host country Kenya, Swaziland, Mozambique, Gambia, Tanzania, Uganda and Zambia.
Affecting growth
In the past, there has been debate regarding best practice and viability of USFs, which have sometimes not been handled properly in some emerging countries, says Dawes.
According to evidence collated by the mobile communication member body, the GSM Association (GSMA), USFs are a relatively inefficient way to develop universal access because an extra overhead is added to the cost of provisioning services.
The report released by the GSMA further states that, globally, only 30% of monies collected by USFs have been dispersed in the right direction. Often a USF will identify an area to target, but by the time the USF is ready to disburse funds, the market will have already covered that area.
Gabriel Solomon, senior VP of the GSMA, says the tax is generally being diverted away from the industry, affecting growth in the long run.
"An open-ended percentage of revenue that traditionally goes into USFs will only increase the risk of this money being diverted away from the industry and, therefore, not serving the objectives it was set out to achieve."
Solomon says the funds should be designed with a specific mission that clarifies core objectives with a capped amount of finance required to fund the objectives.
Dawes says that, although there have been a few teething problems in some African countries, Uganda is proof that USFs can work under the correct design.
He notes that, in the east African countries, 9 000 mobile phones, financed through micro loans (sourced from USFs), have connected four-and-a-half million Ugandans in rural areas in the past few years.
"These citizens would have been unconnected if it were not for these funds - proof enough that although market economics have made huge progress in connecting Africans, tax-funded USFs can also have a huge effect on bridging the digital divide."
Share
