Universal Service in times of Reform: Affordability and accessibility of telecommunication services in Latin America

Abstract

By surveying the universal service policies in six Latin American countries, this study explores the evolution of the concept during the rollout of the telecommunication reform in the last decade. Country profiles and a set of universal service indicators provide a frame for discussing issues of accessibility and affordability of telephone service in the region. This study found that the reconfiguration of national networks fostered by liberalization policies offered risks and opportunities to achieve universal service goals. The diversification of access points and services enhanced users choices but price rebalancing and lack of Universal Service Obligations (USO) to target groups with special needs depressed the demand and threatened to exclude significant parts of the population. The situation requires the reformulation of USO incorporating all technological solutions existing in the market, and factors from the consumer-demand accounting for the urban-rural continuum, and different social and economic strata. This study identifies the emergence of a second generation of USO targeting some of these needs. However, more competition and special tariff plans for the poor need to be incorporated to the options available in the market.