Publication: Expanding the Frontiers of Telecom Markets Through PPP in Peru

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Stephens, Robert
Bossio, Jorge
Ngo, Jean-Christophe
To help bring telephone service closer to Peru's poorest and most isolated areas, where people still had to travel some 56 kilometers on average to reach a pay phone, a pioneering fund offered subsidies to attract investment by private operators. Initial efforts led to impressive achievements, though slow implementation left room for improvement. A Public-Private Infrastructure Advisory Facility (PPIAF)-funded assessment of the first projects helped design the next generation of initiatives-and pointed to lessons for other developing countries. This paper list the following lessons: Governments should set measurable and achievable goals for a time frame of two to four years for their universal access programs, periodically updating the goals as they are met and as markets and technology evolve; universal access funds can be most effective and sustainable if they create incentives for private provision of services on a commercial basis.; imposing a 1-2 percent assessment on operators' revenues is an effective and transparent mechanism for financing universal access funds; making the universal access program part of the sector regulator, rather than a stand-alone agency or a line ministry, reduces political interference in the use of funds and makes it easier to introduce critical regulatory changes to support the program; sound regulatory measures can support universal access; output-based aid (OBA) subsidies are an effective use of universal access funds because they attract significant additional private investment; and governments should find ways to ensure that universal access funds are used in a timely way.
Stephens, Robert; Bossio, Jorge; Ngo, Jean-Christophe. 2006. Expanding the Frontiers of Telecom Markets Through PPP in Peru. Gridlines; No. 5. © World Bank, Washington, DC. License: CC BY 3.0 IGO.
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