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 Monday, March 31, 2008

A novel idea to take voice and data services to the most rural areas could see Vodacom and MTN paid subsidies to do the job. The operators have to promise high-quality services even the poorest people can afford in return for having up to 80% of infrastructure subsidised. But the cost will not hit taxpayers as the cash will come from the Universal Service Fund, to which the operators themselves contribute.

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The agency rates 27 areas as underserviced. In one, Umzinyathi in KwaZulu-Natal, 64% of the population has no electricity, 94% no landlines and 69% no cellphones.

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Last year, US$32.5 million sat idle in the Universal Service Fund as the Treasury refused to hand it over until the agency submitted sound business plans. The cash comes from an annual levy of 0.2% on revenue generated by each telecoms company.

Source: Balancing Act.