Is the Universal Access Fund in Africa Creating an Enabling Environment for ICT Infrastructure Investment in Rural and Perceived Uneconomic Areas?

Abstract

This paper explores the extent to which the Universal Access Funds (UAFs) in selected sub-Saharan states - South Africa, Uganda, Tanzania and Kenya - have tried to fill gaps in ICT infrastructure development and ICT access in rural and perceived uneconomic areas.Following the liberalisation of the telecommunications sector in the mid-1990s, investment in ICT infrastructures has largely been private sector driven. The private sector focuses mainly on urban and semi-urban areas, rather than less economically profitable rural and remote areas, in which the majority of the sub-Saharan population lives. Investment to rural areas, which have traditionally been perceived as uneconomic, has been limited by the high cost of rolling out networks and services. In order to promote investment in ICTs in under-served territories, several African countries have adopted universal access principles with the intention of providing access to ICT services to marginalised communities. However, these have not yielded significant results in terms of increasing penetration rates to communications services.The emergence of IP-based network and services that have dramatically expanded the range of services available beyond tradition voice services and across traditional distinct broadcasting and telecommunications platforms, has challenged traditional definitions of universal access and service. It is the contention of the paper that at least some of the perceived failure of markets, or the perception that some areas are uneconomic, which provides the rationale for the establishment of UAFs, is often the result of African governments failure to create a policy and regulatory environment conducive to investment, or to open up markets to competitors who may have not found it uneconomic to service areas that incumbents with legacy networks may have.