The Universal Access/Service Fund has been a crucial resource through which countries have been able to finance programmes and projects that telecoms companies tend to find uneconomical to implement. However, in a changing sector, is the Fund still needed? And can it continue to operate in the same way as it has in the past?

 

An important and frequently discussed subject when competition is introduced in a country’s telecoms sector, is ensuring that underserved and vulnerable communities and people (such as the elderly and those with disabilities), are not overlooked. As a result, the establishment of a Universal Access Fund (UAF) or a Universal Service Fund (USF) tends to be an important initiative through which to ensure than the less competitive areas, and individuals who would typically be ignored, do not fall between the cracks.

For Caribbean countries that have established Universal Access/Service Fund (UASF), a crucial consideration is identifying possible sources of funds that can be used to implement the envisaged programmes that should be aligned with the country’s UASF framework. Invariably, the source of those funds tends to be telecoms licensees, which usually is levied as a small percentage of their overall revenue, or a small percentage of the revenue generated by specific segments or services.

Although dated, in a one of our earlier articles on UASFs in the Caribbean, we noted that in many countries, the monies collected were not being used, and neither were projects being implemented. Some of the reasons for such a dilemma included that the UASF framework needed strengthening; the selection of projects to be funded was a protracted process; and the scope of activities that could be funded as specified in the existing framework were no longer relevant to sector’s and by extension the country’s current situation and needs.

The USF in Jamaica

One of the countries that addressed those challenges and so has been able to finance telecoms and ICT projects through its USF is Jamaica. Over the years, the country has been able to use the Fund to finance projects such as:

  • the establishment of Community Access Points across the island (Source: USF Jamaica)
  • the connecting of schools, libraries, post offices, health centres and police stations to the existing fibre optic network (Source: USF Jamaica), and
  • the procurement of tablet computers for the Technology Advancement Programme for unattached youth (Source:  TAP).

However, a recent news article indicated that the revenue to the Fund, which has been collected so far this year, is considerably less than projected (Source: Jamaica Observer). It was thus likely that unless the shortfall could be met, some of the activities the organisation has planned to implement, will be affected.

The impact of a changing sector and changing customer behaviour

From the same news article, it would appear that revenues to the Fund have been falling over the years. Hence it perhaps should be surprising that the USF in Jamaica has found itself in this current predicament, especially since it has been implementing a suite of costly programmes over the years.

Moreover, the rates payable for many telecoms services have dropped over the years, to make more competitive and attractive to consumers, which would have an effect on the revenues telecoms companies generated. Further, as has been noted in several quarters, virtually all of the companies have been actively trying to streamline their operations, in order to reduce spend and, at the very least, maintain profits.

Additionally, and in the case of Jamaica, the USF is financed through a levy on incoming calls to the island (Source: Jamaica Observer). However, thanks to over the top (OTP) services, such as WhatsApp, Skype and Facebook Messenger, to name a few, which we all use instead of making telephone calls and sending text (SMS) messages – especially for overseas communication – it is no wonder why revenues to the USF in Jamaica have, and continue to, plummet!

Can countries rely on their UASFs to the degree they did in the past?

In acknowledging that our telecoms and ICT sectors are changing, we must also recognise that the revenues that telecoms companies used to generate – in terms of the overall amount, and their sources – is also changing. Hence UASFs in the Caribbean, and particularly in Jamaica, may need to be more prudent in the projects that they decide to finance, and to consider new and more creative ways in which revenues can be generated.

More importantly, and recognising that some of the UASF frameworks across the region maybe at least five to 10 years old, an update might be in order. The review ought to include an examination of the scope and functions of the Fund, and the financing mechanism, to ensure that they are suitably aligned to their country’s current situation and needs, and those anticipated in the foreseeable future.

 

Image credit:  Pixabay (Pexels)