1. Introduction
1.1  Background
1.2  Focus of this Report
1.3  Contents of the Report

Against the background of large disparities between urban and rural areas in terms of telecommunications development in developing countries, and the recognition of the eminent importance of telecommunications for economic development, the report sets out to investigate:

What are the implications of sector reform and commercialization? What are the underlying conditions required to make the difference and encourage rural telecommunications to develop?

A varied and wide ranging action agenda has been cited, which includes:

• special rural telecom strategies at the national level;
• better integration between the planning of telecom projects and the development programs of other sectors;
• the imposition of strict rural service obligations on monopoly suppliers;
• the creation, encouragement and protection of a new class of small rural operators;
• a serve it or lose it, fully liberalized and competitive market, including price deregulation for operators serving rural areas;
• public-private joint ventures, build-transfer schemes and revenue sharing contracts;
• a stronger co-operative movement;
• special subsidy or capital funds which national or rural operators can draw on;
• fundamental cost-based tariff reform linked with interconnection agreements which favour small rural operators; and
• strong fiscal and other financial incentives directed at rural service provision.

All of the above are being proposed or tried in some form, or in combination, in various places throughout the world.

The challenge is how a country decides which policy option might be the most appropriate for its situation. This report is giving some guidance.