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The GSM Association (GSMA) believes that the cost of mobile networks and devices will continue to fall, enabling affordable mobile services to people on very low incomes.

In many developing countries, mobile penetration is strongly correlated with economic growth and social benefits. Governments and other stakeholders should therefore encourage the mobile industry to provide communications for all by lowering mobile-specific consumer taxes and removing regulatory bottlenecks.

Universal service funds have been adopted by governments in many developing countries, with the aim of improving access to telecommunications.

Points to Ponder
Mobile networks now cover 80% of the world's population, double the level in 2000. This can be attributed almost exclusively to investment by mobile operators and the liberalization of telecom markets by governments. By 2010, 90% of the world will be covered by mobile networks.

Thirty two of the 92 developing countries surveyed have set up universal service funds, which levy contributions from mobile and fixed operators, to subsidize the rollout of telecommunications networks in rural areas. The levy is typically set at 1–2% of gross or net revenues, although a minority of funds collect a considerably higher amount, with the highest being 5% of gross revenues. To date, 15 of the 32 universal service funds have collected more than $6 bn from the telecommunications industry, of which $2 bn has come from the mobile industry. The remaining 17 funds are expected to levy fees soon, or have only recently begun to do so.

Only 27% ($1.62 bn) of the $6 bn that has been collected has been redistributed to the telecommunications industry to aid network expansion. The remaining 73% remains unallocated and unspent.

Universal service funds distribution has had little impact on improving market penetration, primarily because most of the money spent (93% of the $1.6 bn) has been on extending fixed-line networks, which are relatively expensive. In comparison, only 5% or $75 mn has been allocated to mobile networks, 6 which are far more cost efficient to deploy than fixed-line networks.

Opportunities
Mobile operators could extend coverage to an additional 450 mn people (7% of the world's population) living in rural areas, if the unallocated $4.4 bn universal service funds levies were invested into mobile network rollout.

Universal service funds will extract a further $3.8 bn from the telecoms industry by the end of the decade. If 100% of this money was spent on increasing mobile network reach, a further 382 mn people, (6% of the world's population) would have mobile coverage.

If the unspent $4.4 bn universal service funds levies and the further $3.8 bn that will be collected between now and the end of the decade were spent on extending mobile networks, mobile coverage would be near 100% within 3.5 years. Countries collect universal service funds from the mobile industry but invest in fixed networks. It prevents the mobile industry from being able to serve less well-off consumers through the delivery of sustainable and affordable mobile services.