Mobile networks will cover up to 90% of the world's population by 2010 from the current 80%, despite the misplaced policies of many governments that continue to subsidize the rollout of fixed-line networks, a study commissioned by the GSM Association said.
The study, covering 92 developing countries, found that governments had collected more than $6 billion in universal service fund levies from the telecom industry, of which $2 billion came from mobile operators.
Of the $1.5 billion that had been distributed so far, only 5%, or $75 million, was used to extend mobile coverage, despite the distinct cost advantages of mobile technologies, the GSMA said in a statement.
The World Bank estimated that the capital cost of providing mobile coverage to an individual was just one-tenth of the cost of installing a fixed-line connection, according to GSMA.
Universal service funds are typically designed to provide governments with the resources to extend basic telecom facilities to the least privileged in society and to those living in the most remote areas.
Despite the critical role that telecom played in developing markets, the Intelecon Research study found that governments had yet to allocate $4.4 billion of the $6 billion it had collected so far.
If governments allocated the unspent $4.4 billion to extending mobile networks, an additional 450 million people in rural areas of the developing world would have mobile coverage, the study said.