3. The Economic Role of Rural Telecommunications
3.1  Background
3.2  Economic Benefits
3.3  Distribution of Benefits
3.4  Telephone Line Affordability and Payphones
3.5  Planning and Deployment Implications

The last decade has heightened the understanding of the socio-economic benefits of telecommunications in rural areas. However, even though such investments have accelerated markedly, the promise of economic benefits, largely in the form of consumer surpluses, has done little to convince commercial financiers to fund essentially loss-making projects.

Operating companies have continued to collect relatively low revenues from the majority of their rural customers, although some rural lines have attracted high revenues. Many others could have been far more attractive if the institutional aspects – supply strategy, marketing, and operation and maintenance (O&M) – had been better organized, or if the service had been better able to translate knowledge about economic benefits and willingness to pay into a commercial footing. Unfortunately, rural telecommunications still have a reputation for high costs and low revenues.

This chapter reviews well-travelled ground for the simple purpose of constructing a scenario that incorporates knowledge about economic benefits into the development of a strategy for commercial viability. Our basic hypothesis is that the evidence indicates that the maximization of revenues and economic benefits go hand in hand.