Expanding Rural Access
20 July 2007
Expanding Rural Access
n the early 1980s, Sir Donald Maitland chaired the Independent Commission for World Wide
Telecommunications Development. His “Missing Link” report issued in 1984 highlighted the
telecommunications gap and triggered a range of subsequent initiatives. Since this report there has been a
continuing evolution of initiatives aimed at closing this gap, with the “Digital Divide” (and more recently,
“Digital Opportunity”) being the tag placed on this communications gap between wealthy and poor; urban
Perhaps the most dominant current initiative championing this theme has been the World Summit on
the Information Society (WSIS). This effort is led by the United Nations (UN) through the International
Telecommunications Union (ITU). In 2003 at a conference in Geneva, WSIS established a Declaration of
Principles and an Action Plan focusing ICTs and their leveraging capabilities. At Tunis in 2005 this
Commitment and Agenda was reaffirmed with some augmenting elements. These various WSIS
documents reflect a broad-scale commitment to a range of ICT-related topics. With regards to expanding
rural access, these commitments focus on expanding village-level connectivity across the globe by 2015.
It is clear via the commitments make through WSIS and similar forums, those governments across the
globe are committed to improving and empowering the lives of their citizens, especially those that are the
most disadvantaged, through the leveraging of ICTs,
It is encouraging to note that these publicly-stated commitments have been complemented by actions.
An expanding number of countries have adopted consistent national agendas that have led to on-the-
ground action; specifically actions creating more enabling telecommunications environments. A growing
number of countries now have competition in their markets. A growing list of countries have rewritten
their telecommunications laws, established regulators, and written new regulations for supporting this
expanding competition. Many countries have given up their government-owned and operated monopolies
and have moved towards full privatization of the telecommunications sector.
With these improved enabling environments put into place by the public sector, the private sector has
responded with an unparalleled build-out of telecommunication services, specifically mobile networks. It
is estimated that 50% of the world’s population are currently mobile subscribers. An estimated 65% of
these mobile subscribers live in developing countries. For the most part, this dynamic has taken place
within just the last 10 years, and it continues to expand. Clearly the Digital Divide is currently in the
process of being narrowed with regards to voice communications.
Yet as one would anticipate, even with these significant dynamics there remain several gaps needing
attention. First, rural areas continue to lag well behind those living in the urban and para-urban areas.
Second, in many locations the gap is actually expanding with regards to broadband Internet access. At
the end of 2004 it is estimated that worldwide only 13.2% of the world’s population have access to the
Internet. Of these, only 38% have broadband, with only 1 percent living in developing countries. There
is much more to do in the area of expanding rural access and broadband Internet access.
This White Paper puts forward an integrated approach for addressing this remaining gap. It is based
in part from lessons-being-learned through U.S. Agency for International Development’s (USAID’s) Last
Mile Initiative (LMI). Over the last three years this LMI has supported approximately 30 country-level
projects with valuable collective experience coming out of several of these projects.
As such, this White Paper puts forward a replicable community-focused build-out approach for
bringing connectivity, both voice and broadband Internet, to those living in rural communities. The
model builds heavily off of approaches that have worked in the past, and is comprehensive in that it
integrates models for technology, business, and a funding-financing, while addressing required key
enabling environment components. The purpose in putting this forward is to expand upon this collective
experience such that the approach can be enhanced even further and expanded to reach a growing number
of rural communities across our planet.
Expanding Rural Access
Table of Contents
Table of Contents........................................................................................................................................ii
Acronyms and Abbreviations.....................................................................................................................iii
Current Mobile Dynamics Applied to Broadband Internet..........................................................................3
Community Focused Build-out Model.........................................................................................................5
Beyond the Infrastructure..........................................................................................................................10
Expanding Rural Access
Acronyms and Abbreviations
ICT Information Communication Technology
IP Internet Protocol
LMI Last Mile Initiative
USAID United States Agency for International Development
USF/USOF Universal Service Fund/Universal Service Obligations Fund
VSAT Very Small Aperture Terminal
VoIP Voice over Internet Protocol
VoWiFi Voice over Wireless Fidelity (portable hand-held phone)
WiFi Wireless Fidelity
WiMAX Worldwide Interoperability for Microwave Access
WSIS World Summit for the Information Society
Expanding Rural Access
T he exclusive focus of this White Paper is connecting the unconnected, specifically those living in
the more remote rural locations around the globe, and specifically with voice and broadband
Internet. In many respects those living in these rural areas are currently without a voice; Invisible.
Often they exist without access to a set of communication tools that can contribute significantly to their
socioeconomic well being. This Paper puts forward an approach whereby many, if not most all, rural
areas can be connected.
The primary orientation of this White Paper is on telecommunications, though the broader and richer
aspect is “access” that goes well beyond infrastructure. Telecommunications is viewed as but a key
building block, the infrastructure component upon which other value-added services can be delivered.
These additional access-related content and services enrich and enable the community through expanded
access to health services, education, government services, business-market related services, etc. While
telecommunications-focused, this access ultimately seeks to empower each citizen living in these rural
As mentioned in the Management Summary, to a considerable degree this White Paper builds off of
several Last Mile Initiative projects. It also takes into account and incorporates other global dynamics
currently taking place, including the following:
1. World Summit on the Information Society (WSIS)—in a simple statement reflected as
paragraph 10 of the WSIS Declaration coming out of Geneva in 2003, those participating in the
WSIS event state the following:
“We are … fully aware that the benefits of the information technology revolution are
today unevenly distributed between the developed and developing countries and
within societies. We are fully committed to turning this digital divide into a digital
opportunity for all, particularly for those who risk being left behind and being
From these two global forums in 2003 and 2005, a range of actionable items were outlined, with a
range of subsequent follow-up activities having been undertaken. The best single source for
current information is captured in two WSIS status reports, one being issued in 2006, and one just
recently issued in June of 2007.1 The WSIS Action Line C2. Information and Communication
Infrastructure, relates specifically to the theme of this White Paper, though other action items are
The follow-up action from the two WSIS events also establishes a Digital Opportunity Index
(DOI) for measuring progress on the results being achieved on a country-by-country basis. As
one would anticipate, connectivity plays an important role in this index. But while there are a lot
of details associated with the WSIS activities, the over-riding thrust is that of expanding the
access-availability of ICTs and the rich value-add potential they have for bringing about socio-
economic improvements to those living even in the most rural-remote areas of our planet.
2. Next Four Billion Marketplace—another complementary and contributing component in our
quest to establish a viable approach for expanding rural access is a recent study produced by the
World Resources Institute (WRI) and the International Finance Corporation (IFC). This report
titled, “The Next 4 Billion-Market Size and Business Strategy at the Base of the Pyramid.”2 This
report provides detailed data on those four billion people on planet earth that make the equivalent
of between $500 and $3,000 per year. This includes a market of $5 Trillion, and represents over
60% of the earth’s population.
The report’s content puts forward detail information on the purchasing patterns of this 4 billion
population, with the broad realization that this is a sizable market with specific needs and with
suggestions as to how these needs can be better satisfied in ways that will have direct and
immediate impact on their productivity and incomes, and in doing so, this will empower them
into the more formal global economy.
Within this report there is a focus on the ICT market (Chapter 3) which indicates a higher-than-
anticipated level (as a percent) on ICT-related spending. This grows as an accelerated rate as
lower income individuals advance through the income levels. This analysis is critical with
regards to understanding several factors with regards to expanding rural access, including; 1)
there is a market in these lower income levels, 2) there appears to be an unmet demand, where the
availability is less than what individuals are willing to buy, and 3) this needs to be taken into
account with regards to public policy, specifically as it relates to designing, implementing and
operating a universal service fund.
3. Summary of Market Dynamics—Today’s global telecommunications marketplace is very
dynamic with a range of complementary themes moving in a positive direction towards bringing
about significant improvements. These include the following key components:
a. Market Liberalization—there is a tremendous dynamic currently taking place within many
developing economies with regards to public-sector -led market liberalization. While taken
into account there are still situations where additional progress and adjustments are required.
b. Mobile Telephone Growth—this liberalization in the marketplace is having a significant
impact on allowing mobile telecommunications to grow at a very rapid pace. Yet in the more
remote and less-populated rural areas these mobile solutions cannot be implemented to be
economically viable. Expanding access to these areas is still a situation needing a new
c. Universal Access/Service—a growing number of countries have adopted universal
access/service funds through collecting a tax on telecom revenue and using these funds to
cross-subsidize rural access. While these have had a significant degree of success, many are
confronted with the sustainability issue and are looking for a more effective use of these
d. Shared Access Centers—most Universal Access/Service funds are relying on shared access
approaches, and these have had an element of success. However this success is uneven in
low-population density rural situations. The high cost for delivering access to remote
communities-village via satellite terminals and a phone or two, rarely becomes self-
sustaining. There is a need for a better community model.
e. Information-Content Gap—with regards to narrowing the digital divide there are two
components; communications and information-content. Data shows that while the
communications (i.e., voice) gap is being narrowed, the information-content gap is still
growing. Mobile is closing the communications gap, and the newer 3G networks hold
promise for closing the information-content gap via faster access. But in most rural areas
these technologies simply will not deliver the needed information-content through a normal
mobile build out. Again, a new approach is needed.
This White Paper presents an approach for Expanding Rural Access that not only takes these factors
into account, but also maps out a viable set of technology, business, and financing models that will allow
for access to be delivered to the most remote areas on the planet. Further, it is flexible enough to be
shaped to meet local situations, accommodate a range of business approaches, and fit within most existing
telecommunication environments. In most locations it can also become profitable, ensuring long-term
Expanding Rural Access
Current Mobile Dynamics Applied to Broadband Internet
T he one area in telecommunications where this communications gap is being narrowed is in the
area of mobile telephony. For the most part the growth of fixed lines has come to a virtual
standstill, and wireless has become the dominant solution set. While there is some fixed-wireless
growth in certain locations, mobile-wireless has become the defacto standard for bridging the voice
communications gap. At the end of 2004, the majority of countries (166) on this planet had more mobile
lines than fixed lines.
This growth has been nothing short of phenomenal. In 1994 there were less than 1.0 million mobile
phone users world wide. By 2004 there was an estimated 1.8 billion mobile subscribers. Current
estimates place the number at 3 billion, and by the end of 2007 it is estimated that there will be 3.25
mobile subscribers world wide. This number will total half, 50% of the world’s population. Further, of
this total number of mobile subscribers, 65% live in developing countries. There is no indication that this
growth is slowing down, but rather it is expected to continue with most of it taking place in developing
This spectacular growth is due in large part to the increasing liberalized market, the use of pre-paid
cards, and the lower cost and less time required to deploy wireless solutions. It is a direct private-sector
response to telecommunications market liberalization. This liberalization has taken hold over these last
10 years with the result being a spectacular build-out of mobile networks.
While the focus of this White Paper is on rural broadband, it also includes voice communications as
one of the critical services. Most all of the mobile growth is taking place in urban and para-urban areas,
with the more remote-rural areas still not being served or under-served. With respects to Internet, while
gains are being made, current estimates reflect that in 2004 only 13.2% of the world’s population had
Internet access. And of these, only 38% were access to broadband services. Only 1% in developing
Clearly there is the need to establish a revolution in the area of broadband Internet similar to what is
currently taking place in the mobile marketplace. Towards this end, the following are considered some of
the Critical Success Factors (CSFs) that have been essential for the current mobile growth. And any
approach for expanding broadband Internet will have to incorporate similar CSFs if success is to be
1. Governments’ Triggering Action—in the case of mobile there was a critical tipping-point that
sparked the revolution, a key action taken by the governments that was responsible for making
the technology available. This created the enabling condition for the expansion to move forward.
In today’s mobile expansion has been market liberalization. In context of our earlier discussion
on WSIS, it is not until each of the governments signing on to the WSIS declarations and action
plans actually take real on-the-ground action to create or enhance the enabling environment, that
the revolution can get started. Only then will the ideals of WSIS become reality and have the
2. Making Technology Available—it is important to note that mobile technology has been around
for approximately 20 years. The technology is not what started the current revolution. Rather, it
was the availability of cost-effective technology; the end of telephone monopolies such that other
firms, competitors could enter the marketplace and offer mobile services.
3. Private Sectors’ Action—it is also important to note that it was the private sector that built the
networks, not the governments. In most countries the government had the monopoly for a
hundred years and didn’t do much with it. Private-sector engagement and engagement in a
competitive environment is a common and essential factor for the revolution to truly take hold.
4. Dominance of Voice Services—it is also important to note that voice is the dominant
telecommunication application. It was a hundred years ago and it still is even now. This is the
application people want and the application people are willing to pay for. It is affordable by the
bulk of the population. It is also the application that cuts across the entire population of
individuals, businesses, and governments. It is the essential ingredient for financial viability.
And upon this basic service other value-added Internet services can be expanded. While data
communications is beginning to gain momentum in mobile networks, this will always remain a
secondary service, with voice being the dominant demand.
5. Massively Parallel—yet another CSF is the massively parallel nature of the mobile phenomenon
is taking place around the world. Here there are hundreds, possibly thousands, of mobile
networks being put into place world-wide cell-by-cell at the same time. Revolutions must be
broad-based and small deployments are simply of marginal use, and typically not financially
6. Community Focused Build-out— and finally, it is important to note the community orientation
of these massively parallel implementations. Today’s mobile growth, while not focusing on the
expansion of rural communities, it is in fact the expansion of urban communities—expanding
access to those living within the community. For rural communities this is an essential difference
between many of the existing rural programs now in place that take an approach of installing a
single phone or two into a remote rural community, often using an expensive satellite terminal.
This approach simply doesn’t create the needed community dynamics nor financial viability, not
add critical value to all living in the community. It’s an add-on, not a systemic part of their
The above six CSFs provide a list of essentials that needs to be kept front-and-center for Expanding
Rural Access. They provide a touch-stone for establishing a successful approach; a test as to the validity
of what is being put forward.
While not the focus of this White Paper, it is interesting to note that the telecommunications
revolution that took place a hundred years ago in the U.S. followed a very similar to what is currently
taking place across the planet in the mobile telephony arena. The above CSFs are virtually identical and
of special significance to our focus, much of this revolution took place in rural areas.
As a starting point, the telephone was invented in 1876 with two competing patents being issued, but
this was sorted out with Bell being granted the patent. This gave Bell a telephone monopoly in the U.S.
until 1894. When the patent expired in 1894 the technology became available to everyone. And between
1894 and 1902, in just 8 years, an estimated 3,000 non-Bell commercial systems were established in the
U.S. By 1927, another 25 years, there were over 6,000, the result being massively parallel expansion.
With regards to growth, when the Bell patent ended in 1894 after 18 years of Bell having the
monopoly, the Bell system had an estimated 270,000 phone installed on its various networks. Virtually
all of these were in large cities. By 1907, just 13 years after the patent ended, there were an estimated
6,000,000 phones in service throughout the U.S. Teledensity in the U.S. went from 0.43/100 in 1895 to
6.67/100 in 1906, a period of just over 10 years. And perhaps even more important with regards to
Expanding Rural Access, this teledensity was virtually even for urban and rural. The rural state of Iowa
had a teledensity greater than that of New York City where Bell still retained a monopoly.
A couple more items of interest from 100 years ago: 1) The average number of phones on these over
6,000 systems was less than 200. These networks were community-based. 2) The technology at the time
didn’t allow for long-distance transmissions or interconnection between these small networks. Yet those
living within these rural communities placed a sufficiently high-value on these systems such that they
built and operated them.
The above reflects critical elements that need to be taken into account as we seek an approach for
Expanding Rural Access, with a special focus on broadband Internet.
Expanding Rural Access
Community Focused Build-out Model
The last of the CSF’s, “Community Focus”, center on an approach for a totally-networked community
with a full complement of telecommunications and access to information-content. This is not a one or
two phones approach, but rather a level of teledensity ultimately not substantially different than urban
areas. That’s the target. This approach seeks to serve the entire community, in our case those living in
the more remote rural communities. Those living in the community will be linked to the world by first
linking to themselves. The orientation is to build a local community-based infrastructure where those
living within the community have the ability to call others within the community, as well as calling-
receiving calls to/from outside the community.
This Community Focus moves beyond the common shared-access approach of placing a single phone
per community. Examples of this approach are found worldwide, be it in Eritrea, Vietnam, South Africa,
Peru, etc. Taking the lessons of the U.S. build-in that took place in the late 1800-early 1900s, and the
current global mobile dynamic, the approach here is to focus attention on meeting the local needs within
the community first; ”first mile first.” The value of any network is the number of nodes on the network;
network economics. What is the value to those in a community where it has but one node? Value?: yes;
a lot of value?: no; Sustaining value?; unfortunately in many cases: likely no. This approach simply
doesn’t add value to where there is the greatest demand—that of providing communications where it most
naturally occur; within the community.
Even in developed economies with mature telecommunications networks, approximately 60% of the
communications traffic is local. Again, the community oriented approach provides value where there is
the highest demand and for a core service for which people are willing to pay. And, it cuts across the
entire community, not simply one segment or sector (e.g., health, education, business, etc.). These are
incremental value-added services that can be added to the core.
In our Community Focused approach, there are four
• Enabling Environment—this will influence how
the other three components are implemented. T e c h n o lo g y
Variables here are frequencies, interconnection,
business structure, etc. For optimization there
are likely some public-sector changes required.
Technology—the need is for an existing
technology solution set that can provide a low-
cost service, both in terms of initial capital
investment and operating costs, and support
broadband data and voice from a single network.
• Business—there is the need to develop a business En a b lin g E n v ir o n m e n t
model that can be implemented in various structures
(independent, franchise, mobile extension, or PSTN
extension) and that can demonstrate a profitable operation to ensure
long-term financial sustainability.
• Financing—there is the need for start up funding. Funding must be based on a viable technology
solution set and a business, as it seeks start up financing, be it private or public investment. If the
Enabling Environment is suitable, then this will be from the private sector. Another financing
option is through universal service funds, though there may be the need for moving from an on-
going subsidy approach towards a public investment-oriented funding-financing.
The next four Sections address each of these components in more detail.
Expanding Rural Access
uilding off of the CSFs established earlier, two elements are essential; 1) there must be some public-sector
triggering event, and 2) there must be an opportunity for the private sector to take advantage of the
opportunity and make the technology available to the marketplace. With these two pieces in place, the
private sector is empowered to move forward my making needed investments.
In the approach put forward through this White Paper; 1) there are viable technology sets available
today that can cost-effectively light up any remote village anywhere on the planet, 2) in most cases it will
be possible to build a viable business plan that can demonstrate financial viability of these microTelcos,
and 3) with these viable technical and business models, the potential to locate and secure financing
becomes a real potential.
Here the focus is very targeted. From both an entrepreneur seeking to set up a rural microTelco or the
government seeking to allow this to happen, the core questions are; “Is it allowed or happening…and if
not, why?”, “What is in the way?? If it is not for want of a viable technology solution set, and it is not
having a solid business plan, or the availability of financing, then what is it? Something in the
government’s enabling environment simply isn’t as enabling as it needs to be.
Once the barriers are identified then the public policy makers who are committed to the ideals of
WSIS and/or closing the digital divide must either; 1) commit to removing the obstacles, or 2) simply
acknowledge this in fact is not a national priority. It is not a matter of the public sector “doing it.”
Instead it is a matter of the public sector creating the enabling environment for the private sector to do it.
One of the distinct advantages of approaching the Expanding Rural Access from a community
perspective is the fact that it narrows the focus of this discussion with regards to what changes are needed
in order to create the needed enabling environment. In all likelihood there are few changes actually
required. Rarely will there be the need for a wholesale rewriting of the telecom law and supporting
regulations. Rather there is just the need to identify and create the triggering event that allows the private
sector to expand the access to technology. The key is to use the Community-oriented model to identify
those few things needing to be changed and then setting about changing them.
One key area of focus for possible change is to create a more competitive environment where the
marketplace will become actively engaged in closing the gap, similar to what is taking place in the mobile
arena. This in essence is aimed at minimizing the “friction” such that the private sector can operate freely
by closing the “market gap.” The corollary to this is for the public sector to establish a comprehensive
approach to close the “access gap” whereby a universal service fund is designed and put into place and
operated such as to fill in those remaining holes where market forces will not make the required
investments to expand access into more rural areas. This will require establishing greater unity between
the telecom policy, legal, and regulatory environment and the USF with the goal being to enable the
private sector to play a greater role in servicing rural communities, and to implement public financing
only where the gap still exists.
Several other actions the public sector may need to take include: 1) cutting adoption time for new
technology from the historic 20 years we saw in the two earlier examples to 5-10 years or less; 2) building
a national backbone that can provide cost-based connectivity to rural areas, with fiber being the likely
solution with wireless distribution off the backbone; 3) allowing ISPs to become carriers by providing
low-cost Wireless and VoIP services, 4) requiring and aggressively enforcing a provision that existing
carriers must interconnect to the microTelcos and provide realistic cost-based call termination fees in a
timely manner, and 5) adding to existing carrier licenses a simple provision, that they either provide
quality access services to the rural communities or they lose their exclusivity for these areas, thus
allowing independent microTelcos to enter the local community markets. Making these changes should
be quick, with the result being a near-immediate launch of the sought-after revolution in rural
Darrell Owen Page 9 20 July 2007
Expanding Rural Access
T he starting point for the Technology Model is to establish a technical solution set that is low cost
and can satisfy the needs with the local community. It also must include connecting to/from the
outside as a secondary focus. Further, it also needs to support the highest demand first, and that is
voice. Too often in recent years the focus in rural areas relative to introducing the Internet into rural
communities is typically a single-purpose solution focusing on but a single sector.
With regards to using available technology, our model is using wireless, either WiMAX and/or WiFi
and Voice over IP (VoIP). These are relatively new technologies that have been available for
approximately 5+ years. While the technologies are stable, their integration into a single solution for
voice is pressing the technology envelope just a bit. Also, at this time pricing is remains higher than it
will be as we have yet to reach economies of scale, especially with WiMAX. However this is rapidly
Also, while the platform focuses on Voice, it is VoIP delivered over an IP Wireless network, thus
providing the platform for expanded access to Internet-based information-content and services. Recall
that worldwide this is still where the gap is going, and it is essential this be addressed in our technology
And finally, there is the need for an out-of-the-box integrated solution such that the solution can be
easily replicated, is stable, low maintenance, and yet allows for tailoring to meet local situations.
As put forward in this White Paper, the Technology Model consists of two sets of complementary
technology solution sets that combine into an integrated set of network services:
Central-Shared Services—these core services focus on the establishment of a central-shared set of
services upon which multiple communities…hundreds, even thousands, can derive key services. This
allows for the realization of economies of scale and scope, and in doing so, significantly lowers costs.
Key central-shared services include a shared backhaul, VoIP services, PSTN and Mobile
interconnection, Internet connectivity, Internet services, as well as billing. The goal here is establish
essential services though a central-shared approach in such a manner that they can be made available to a
large number of remote-rural communities.
With regards to a shared backhaul, this will vary depending on the local environment. In many cases
this will be a combination of fiber, satellite, and terrestrial wireless, both point-to-point and point-to-
Depending on the nature of the Enabling Environment, these services can be provided by either a
PSTN, mobile operators, or even an ISP with proper licensing. Whereas the individual rural communities
may be locally-owned and operated, these central services are best provided through a single, national-
Community Networks—the technical solution here is to gain access to the shared backhaul, and
through this, to the central-shared services. Within the remote-rural community the network consists of
an edge-switch that will keep local voice traffic local, and an IP-based wireless network that provides
coverage throughout the community. This is via WiMAX and/or WiFi, with the number of antennas
dependent on the coverage area that is required. In most rural communities the approach will be to place
the higher value-added access devices such as PCs, in one or more TeleCenters. Wireless VoIP (VoWiFi)
phones will be distributed throughout the community to individual and/or businesses in much the same
manner as mobile phones are used in more urban settings.
The key at the community level is that this solution set works out of the box. Also that it is
operationally stable and requires minimum maintenance and operational support. Here the key is for a
solution that can be implemented in a “massively parallel” approach.
Expanding Rural Access: White Paper Page 10 20 July 2007
Expanding Rural Access
T he starting point for the Business Model is to pursue an approach that is private -sector based, and
not the product of a public-funded development project, unless such a project concludes in
privatization. Also, it is an in-country enterprise, possibly multiple, where there is a firm
providing the central-shared services, and possibly a franchise approach where each remote-rural
community is independently owned and operated.
The focus at the community level is to capture all local community demand, specifically voice. In
that it is built on an IP network, it will also deliver Internet services and with it the range of “access” to
key services. The business model is not limited to closing only the communications gap, but also the
The reason for Voice? It is the one service where the demand reaches across the community—to
individuals, businesses, and government. The uptake by users is also rapid in that there are no language
or computer literacy issues. It is also the one service for which the largest number of people are willing to
The business model orientation is to establish a two-layered business model that parallels the
National Platform—first there is the need for a business that provides the national platform of
central-shared services, and second there are local community-village businesses that provide the local
community network and services. Ideally the national platform can be put into place by an existing
Telco, in many cases most likely the mobile operator.
In many locations the legal and regulatory environment is such that existing carriers are already
empowered to pursue an approach whereby they lead an effort to provide these services. And in many
situations a business approach can be established whereby entry into this market is a viable and
sustainable business initiative. In other situations there may be the need to seek some level of
government approvals such as frequencies and possibly expanded services. It may also be that there is
the need to seek access to universal service funds through established processes and procedures.
Community Level— the local community networks can be set up as either as branch offices,
independently-owned business and/or franchisees. The business approach at the community level is one
of delivering layered services. This includes; 1) using the technology model to support Internet and
Voice access through shared-access TeleCenters, 2) delivering Voice services throughout the community
to those seeking the service (moving beyond access to individual service), 3) delivering Internet services
to local businesses, government, and international-funded NGOs working in the community, and 4) using
an approach pioneered by Grameen through it’s “village phone operators” where individuals, typically
women through support of micro-loans, provide shared phone access throughout the community to those
who cannot afford a phone. The orientation is to capture the maximum potential demand from throughout
the community, and in doing so maximize the revenue stream for ensuring long-term financial
sustainability. To be a success, these community businesses simply must be profitable and sustainable.
Also at the community level, the key is to build a viable business plan. The starting point for this is
the use of a common template and automated tool where differing local variables are plugged into the tool
in an effort to facilitate localization for each specific community project. These in turn serves as a base
set of replicable business-finance models that can be adjusted even further for other local communities.
Variables that need to be localized include the initial cost of the network, population size, revenue
projections, operating cost projections, estimated growth, loan repayment schedule, etc. The orientation
is to have prospective local businesses or franchisees quickly develop a professional quality business-
finance plan that is based off of others’ examples and is sufficient in details and completeness for the
local entrepreneur to secure a loan to cover start up costs from a commercial lender, a venture capital
fund, possibly even a repackaged public universal access/service fund.
Expanding Rural Access: White Paper Page 11 20 July 2007
Expanding Rural Access
K eeping with our focus on CSFs from earlier successes, and incorporating our new technology
and business models, the focus here shifts to funding-financing, specifically start- up financing.
To a degree how the funding-financing component is addressed will be influenced by the
governments’ enabling environment.
A fundamental component to this enabling environment will be the issue of private ownership and a
fully-functioning regulatory that addresses issues such as tariff setting, enforcing interconnection,
frequency licensing, etc. But in virtually all countries currently-licensed carriers are able to pursue this
approach through local offices and likely even through a franchise approach. In a growing number of
countries ISPs have obtained a VoIP license and represent a viable business structure.
Regardless of the business structure, with a viable business plan the next step is to seek start up
Private Sector Funding Sources—with regards to seeking start up funding from private sources, the
keys will be a business plan showing financial viability, some demonstration of management and
operational strength, and assurance that the local enabling environment is sufficiently stable to ensure
launch and operations without undue or overly burdensome obstacles. The key for the financier is one of
managing risks. For a franchise approach set up by either a Mobile or PSTN operator, the likely
financing source will be internal to the company. Another growing source of funding isinternational
foundations seeking to promote the growth of small-medium businesses, specialized venture capital
funds, and a growing number of investments funds that are committed to providing social responsible-
related funding and thus willing to take on risks associated with emerging economies.
Public Sector Funding Sources—with regards to seeking startup funding from public sources, the
foundation stones are the same as with the private sector sources: a solid business plan showing financial
viability, some demonstration of management and operational strength, and assurance that the local
enabling environment is sufficiently stable to ensure launch and operations without undue obstacles.
Sources for funding from the public sector include specialized funds set aside by some of the multilateral
banks such as the IFC with its small-medium business funds.
An ideal approach within the country is via the establishment of a country-level Universal
Access/Service Fund (USF) that is postioned to enhance their operations to include the use of loans as a
replacement or augmentation of recurring operational subsidies. The use of loans adds a project focus
that in essence holds potential for turning USFs into a specialized public venture capital funds with the
potential that they can support starting up hundreds, if not thousands of community-based microTelcos.
These loans may have a concessionary component included with regards to delaying repayment and for
lower-than-market interest rates. Again, we’re seeking massively parallel implementations. In most
situations this will require legislative changes as many USF programs have not been structured in this
A key consideration for the governments is to recognize and take into account that while these UA/S
fund loans would be made to community-based a microTelco, behind this microTelco is community
enrichment and empowerment—expanded socio-economic services to their most rural and
disenfranchised population. This allows the UA/S funds to play an increasing role in the nation’s regional
or rural development initiatives.
Further, it is also important that this not be undertaken on a delivering telecom services at the lowest
possible cost approach. Rather than the lowest cost, there needs to be an expanded focus by USFs
towards maximizing the total value to be gained from these services being delivered to these rural
communities, again, with community development seen as an integrated rationale for managing the funds.
Expanding Rural Access: White Paper Page 12 20 July 2007
Expanding Rural Access
Beyond the Infrastructure
he focus of this White Paper has been to pull together a range of dynamics that intersect to provide a
viable and sustainable approach for Expanding Rural Access into more remote-rural communities. It
seeks to pull together lessons learned from earlier successes, and establishes an integrated set of
technology, business, and financing models that hold potential for meeting a near-universal goal of
bringing ICTs to those living in the more remote-rural areas of our world.
Yet while this White Paper has focused predominantly on the telecommunications component of
expanding access, the most promising aspect of this approach is the value-added information-content
services that this infrastructure brings to each rural community. Whether it is the access to improved
health services, education, business-economic support, access to government services, or simply
improved social interaction, the infrastructure is the foundation for launching a range of enabling and
empowering information-content services. In many situations these also hold potential for bringing
business and job opportunities to the rural communities, closing socio-economic gaps well beyond
narrowing the digital-access divide. Here community development is at the core.
Several key value-added content services hold tremendous possibilities for bringing about
socioeconomic gains in remote-rural communities, including the following:
e-Government—a fundamental value to the government and its citizens is to expand the delivery of
government services to those living in rural areas. This enables the government to extend its sovereignty
and influence, and at the same time provide value-added government services to citizens which at present
are out of the reach of these services due to physical distances.
e-Learning—delivering high-quality education-related services to remote-rural communities is a
significant challenge across the globe. With the network in place a wide-range of basic-to-advanced
education can be delivered on-line. These can be constructed such as to meet specific community needs,
be oriented towards job creation, or aimed at improving any number of in-community services.
e-Health—this has been a rapidly growing area where ICTs have been instrumental in delivering
improved services into remote areas. This can include delivering sophisticated patient records at local
clinics, to diagnostic capabilities using digital scanning/X-rays, as well as prescribing and monitoring
e-Business—a range of business-related services can be delivered over the Internet including not only
training-learning opportunities, but also expanding the reach of markets for local products, marketing-
advertising rural tourism-related offerings, building improved partner-supplier relationships, and
extending a range of micro-finance related services.
e-Agriculture—because the remote-rural communities are frequently agricultural-based, the Internet
provides rich opportunities for gaining information to improve agricultural practices, learn about new
opportunities, and to gain current pricing information to improve income.
These are simply an initial set of examples where the broadband Internet infrastructure can be used to
deliver value-added content services that hold promise for bringing about socio-economic gain to those
living in remote-rural areas. The community-focused approach seeks to provide a single network into and
across the community whereby these services are made available across the community rather than at a
single point of delivery. Further, this community-focused approach is such that none of the organizations
and users of these individual services have to absorb the total cost of the network. Rather, it’s shared with
multiple uses, including voice, with the result being a resource that becomes financially viable for long-
Expanding Rural Access: White Paper Page 13 20 July 2007
Expanding Rural Access
T he approach put forward in this White Paper holds the potential to be implemented on a wide-
range of levels, from an existing carrier seeking to expand their reach into more rural
communities, to a government seeking to encourage the building of a national-level shared service
that can support thousands of franchisees at the community level. The focus is on obtaining the needed
national-level scale while at the same time providing local community opportunities and empowerment.
Ideally a logical starting point for traveling down this road is through an initial Assessment of the in-
country environment with regards to examining the country’s enabling conditions, and the prospects of
market and potential for scale. This could be driven by the government, one of a number of international
donors, an investment fund seeking socially-responsible investment opportunities, or as reflected above, a
fixed line or mobile operator seeking a low-cost approach for expanding their customer base and/or
meeting universal access/service requirements imbedded into their telecommunications license. This
Assessment would provide a current reading of the local environment, roadblocks needing attention, and
opportunities to be pursued. It should also seek to establish potential partners for undertaking such an
Assuming the Assessment shows potential, a second step would logically involved a limited scope
demonstration effort to iron out the details of connectivity, business model, demand, possibly establishing
a national franchise, establishing financing mechanisms, resolving possible interconnection issues, and
also identifying and addressing potential limiting conditions needing attention and resolution. This is not
so much an effort to determine if the approach will work, but rather an effort to optimize the approach
and make the requisite local adaptations. It would also seek to gain implementing and operating
efficiencies and effectiveness.
From this initial piloting effort the issue is simply one of developing a viable plan for national scale.
Again, this can be through a private business supported via an investment fund, a franchise model with
private or public investors, or establishing a new rural community business unit within an established
fixed-line or mobile operator.
Those wanting to comment upon, seeking additional information, possibly wanting a fuller
presentation, or are even planning to pursue an expanding rural access initiative are encouraged to contact
Darrell Owen at firstname.lastname@example.org.
Expanding Rural Access: White Paper Page 14 20 July 2007