Microtelcos in Latin America and the Caribbean

The problem discussed in this paper is the failure of ICT networks and services to effectively reach the poor, particularly those living in rural areas, in Latin America and the Caribbean. The conventional answer to this problem has been to create incentives and offer public subsidies for traditional operators to cover the differ-ence between tariffs and cost-recovery levels. This paper examines a different answer. We suggest that microtelcos- small-scale telecom operators that combine local entrepreneurship, municipal efforts, and community action- can play an important role in extending ICT services in the region, particularly in areas unat-tractive to large private operators. In fact, we show that a variety of microtelcos are effectively servicing many of these areas, despite a less than favorable regulatory environment and little access to public subsidies. The paper examines the theoret-ical case for microtelcos as an effective alternative to address the ICT needs of the poor, presents examples of microtelcos drawn from across the region, and suggests how existing regulatory obstacles for microtelcos may be removed