The Relevance of Public Access Services and Universal Service Obligations and the Implications for Policy and Regulation – A Case Study of Innovative New Business Models to Address Public Access Services for Low Income Consumers

Abstract

This paper explores the relevance of public access services and universal service obligations in light of the impact of increased competition in developing markets. A combination of factors is increasing mobile penetration in developing countries driven by the tremendous growth of mobile services in most developing countries reducing prices of telecoms services in general. Increased innovation has created low-cost handsets thus removing the barriers to entry for poor people. As a result of increasing penetration markets in urban areas and competition from multiple operators in the city centre, operators are extending their geographical reach and coverage. This has raised the question of the relevance of universal service obligations, which were initially created to expand access to areas which were perceived to have low commercial viability. A large portion of these obligations, included compelling operators to provide shared models of access in disadvantage areas. However, most such interventions have had limited success to date yet penetration is improving and access and usage of mobile services continue to grow. This paper will explore the relevance of universal service programmes in light of new market developments in emerging markets, using the South African example as a case study.