Adriana Labardini raises a very important question--how to get
infrastructure and connectivity into rural areas. She poises the
question of prices, but the real failure of old-line telcos is that they
are wedded to a subscription model--the right business model (shared
use, pre-paid in small units, local entreprenuers as resellers) would
open up service in many places. Grameen Phone's village phone model,
Vodacom's community phone shops, and others show this approach can be
very profitable, and also provide affordable service where it is needed.

Leap-frogging though wireless technologies, evolving fast and inherently
cheaper services for serving dispersed communities, is her other
suggestion. But she points to the real barrier here--most developing
countries have not made unlicensed spectrum freely available, because
they don't understand that the entrepreneurial explosion would generate
more economic activity and more tax revenue than they would get from
license auctions--especially in poor, rural areas. Others have high
import duties on the specialized radio equipment needed to do WiFi or
its successors. So we need to make the business case to governments as
well as to companies.

There is a third possible model, and that is for infrastructure
companies to build and manage the infrastructure for a variety of
users--government agencies, banks, comsumer goods companies--that need
to get to rural consumers/communities. A number of companies are now
contemplating such strategies--both big companies and some
entrepreneurial companies. So one question is, where would governments
welcome such investment and help clear away regulatory barriers?

Allen L. Hammond
Vice President for Innovation & Special Projects
World Resources Institute
10 G Street NE
Washington, DC 20002  USA
V (202) 729-7777 
F (202) 729-7775

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