Telecommunications Challenges in Developing Countries: Asymmetric Interconnection Charges for Rural Areas


Work data:

ISBN: 0-8213-5784-0

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Type of work: Working Paper


ICT Infrastructure | ICT4D | Policy & Regulation


Telecommunications Challenges in Developing Countries addresses an important aspect of interconnection?the settings of call termination charges. In rural telecommunications, network costs are known to be high. The traditional consensus has been that many rural areas cannot be connected without subsidies. This paper investigates the possibilities for implementing a geographically de-averaged charge regime indicative of the relative cost differences between urban and rural networks. This could change the business model for rural networks, significantly increasing revenues from incoming calls.

The study investigates historic and current examples of asymmetric charges and user tariffs in fixed-to-mobile interconnection regimes today. It addresses a wide range of related issues and questions: customer affordability; customer education and awareness; numbering plan and billing; whether detailed cost models would be required; and whether asymmetric termination charges, while eliminating current market distortions, would create other distortions. Alternative implementation strategies are also considered, with an eye to practicality for developing countries. It concludes that the concept is feasible, and the study further provides ideas for piloting the concept in a limited number of countries.