As per a recent report by GSM association, cell phone coverage could come close to 100% in future if governments make proper utilization of funds gathered from service providers to extend coverage to backward regions.
Around 90% of approximately 6 Billion of global population will have access to cell phone coverage by 2010, a rise from present 80 %, provided the governments eliminate customs & sales taxes to make handsets & mobile services affordable for the poor, as per a recent study by GSM association & Intelecon Research.
The report covered 92 developing nations and examined the funds collected by governments. It was found that governments have so far collected over US$ 6 Billion from telecom sector of which US $ 2 Billion came from cell phone operators. Despite the cost benefits, only 5 % of US $ 1.5 Billion (distributed until now) has been utilized to extend mobile coverage.
Moreover, majority of the fund money was utilized in extending fixed-line services instead of cell phone infrastructure that has lesser deployment costs. If remaining (around US $ 4.4 Billion) is used for extending cell phone coverage, service providers can expand the network to around 450 million population residing in rural areas.
"These figures suggest that governments are still underestimating the potential of mobile industry in contributing towards the overall development of the nation. Funds should be properly utilized and equal priorities must be given to all services," said an analyst at RNCOS.
Out of 92 nations, 32 have established funds for universal service in taxes accounting from 1-6 % of total revenue of operators. For instance, Malaysia takes 6 % of revenue from operators while India charges 5 % and has amassed nearly US $ 2 Million, which has been allocated entirely for developing fixed line networks. Brazil charges a mere 1 % but still hasn't utilized any amount of $ 1.7 billion funds it has gathered so far.
The report has urged governments to concentrate on 2.7 billion people residing in regions with mobile phone coverage but still don't have cell phones, to encourage economic growth. If sales & taxes are removed, mobile penetration can increase by an estimated 20 % in those regions. Moreover, a 10 % rise in mobile penetration in a developing nation can boost its economic growth by around 0.6 % annually.
Related Market Research Reports:
3G Market Outlook (2007-2010)
European Mobile Market Scenario to 2012
Europe Mobile Handset Market Analysis (2007)
