Holding voice conversations over the internet through wireless networks are beginning to give consumers, small companies and social activists a way of connecting to international networks. Telephony, chat, email, text messaging and video-conferencing improve trust and enhance commerce. However, in many developing countries regulations are being captured by dominant operators and hindering competition and innovation.

A paper from e-ForAll gives an overview of the role of wireless and Voice over Internet Protocol (VoIP) technologies in expanding low cost information and communications technologies (ICTs) to rural communities in developing countries.

Current restrictions prevent low income people from accessing telephony services. The rates charged by Skype, the leading provider of services from personal computers to public switched telephone networks (PSTN), are largely determined by interconnection charges of national operators. The base Skype rate for international calls to liberalised markets is US$ 0.021 per minute but in markets where the government protects national operators’ telephone revenue, for instance in Guyana, they can be 1,700 percent higher. The author also notes that:

• Dominant operators in many countries including Indonesia, Sri Lanka, Ecuador and India find ways to block internet service providers from offering VoIP commercially or otherwise prevent wireless networks carrying VoIP from interconnecting to the existing operators’ wire lines or mobile networks.
• Monopoly operators serving urban areas have been challenged by mobile networks but rural markets remain underserved. Without public sector encouragement the private sector is unlikely to invest in these high-risk low-profit markets.
• Effective public sector action is required to establish regulation and introduce selective public subsidies to foster competition and innovation.

The author presents an interesting case from Indonesia where young technicians working from a private tourism school have established a wireless WiFi network to commercially serve 20 cybercafés in Jakarta and eventually joined forces with government officials from the Ministry of Education to train other schools to do the same in other parts of the country. Most importantly, through social activism and building a separate constituency, they have managed to achieve changes in the legislation to allow the implementation of WiFi networks.

The author warns that regulation is lagging far behind technical change, particularly in developing countries. Donors and governments committed to using ICTs to reduce rural poverty, would do well to focus on liberalising VoIP and VoIP interconnection to the PSTN and on eliminating restrictions on the use of Wireless spectrum in the bands that enable WiFi and WiMax wireless networks.

The study concludes by recommending three kinds of interventions that have the potential to contribute to such build up:

• Training in wireless networking, including administration and management of sustainable networks.
• Local wireless network projects that increase competition at the edge, filling a gap in rural broadband service.
• Local observatories of hot topics in telecommunications regulation, through which informed exchange, analysis and debate about regulatory issues takes place, and, whenever appropriate, existing operators, politicians and regulators are called to task.

Source(s):
‘The road to broadband development in developing countries is through competition driven by wireless and VoIP’ FAO Investment Centre, paper prepared for the workshop: Wireless Communication and Development: A Global Perspective, Annenberg Research Network on International Communication, by Francisco J. Proenza, October, 2005 Full document.

id21 Research Highlight: 29 March 2006

Further Information:
Francisco J. Proenza
e-ForAll
C. P. 64047
Rome
Italy 00100

Tel: + 3906 5705 6085/ +39 348 870 4494
Contact the contributor: FJProenza@e-ForAll.org

e-ForAll

Other related links:
'Beyond being ‘open for business’: monitoring the impact of telecentres'

'Mobiles and markets – providers of telephones for Africa’s rural poor?'

'Overcoming rural India’s lack of communications infrastructure'

Wireless Communication and Development: A Global Perspective, 2005 Workshop