YOU ARE AT:Archived ArticlesRural access remains challenge for telecom providers

Rural access remains challenge for telecom providers

MOUNTAIN VIEW, Calif.-Rural and underserved markets quickly are becoming integral, strategic components of international telecommunications expansion, because reaching the 4 billion people worldwide still without access to telephone services poses a challenge for service providers.

According to Frost & Sullivan’s latest research report, “World Rural and Underserved Telephony Markets,” new telephone lines serving nonurban populations generated an estimated $9 billion in service revenue from 1995 to 1998. Additional new lines will grow this market to a minimum of $42 billion worldwide by the end of 2004, with more than 65 million cumulative new lines expected.

These figures represent the beginning of a growth curve where demand outpaces supply, and future market potential is vast for companies that properly assess their expansion.

“The biggest mistake companies make addressing these markets is to assume that conventional marketing rules apply,” said Frost & Sullivan Consulting Analyst Maya B. Tse. “For example, market restraints play a bigger role than market demand, and potential market restraints can vary greatly from region to region, from country to country, and from locality to locality.”

The research firm predicts that by the end of 2004 broadband wireless and satellite last-mile solutions will begin to erode the market share of current wireless local loop and fixed-satellite telephony solutions. However, current low-earth orbit satellites and WLL hardware only have a lifespan of five to 10 years; therefore, infrastructure upgrades already should be factored into long-term business plans, the report said.

Bolstered by the economic power of many of its developed nations, Asia will represent the largest regional share for telecommunications by 2004. Latin America ranks second, with its development being accelerated by regulatory and trade policies, according to the report.

To better serve and develop these rural markets, Frost & Sullivan recommended telecommunication providers plan for long-term technology migration, seek opportunities in both liberalized and monopoly environments, understand the significance of development issues, and pay as much attention to non-technical operating costs as to technology costs.

“As the competitive map of the international telecommunications industry changes, companies must increasingly look further afield for new opportunities. What they will see are underserved markets that are not going away any time soon,” Tse said.

ABOUT AUTHOR