FINANCING OF TELECENTERS

Resources are required to run a telecenter, and those resources have to come from somewhere. So how does one finance a telecenter? I was just chatting with a colleague from the World Bank, who suggested that all of us who think about telecenters tend to view this question from the perspective provided by our own background. The following comes from my background, which is rather confused.

My guess is that mixed financing is appropriate for most telecenters in rural areas and poor urban areas in developing countries. That is, telecenters should probably usually be financed from several sources reflecting their varied client needs and social functions. Here are some sources of financing that might be considered:

· Integration of the telecenter with another, perhaps preexisting facility. There are many such models, including schools that offer access to ICT when not being used by students, teachers and administrators, to post offices that offer email services in addition to traditional postal services, to retail stores that add ICT services to their mix (as McDonalds is doing by putting computers in all their stores in Brazil), to agricultural cooperatives that offer ICT services to the local community using facilities acquired to serve their members, to community radio stations that offer public access to the Internet in addition to broadcasting.
· Fee for services:
1. Fees for use of the telecenter per se;
2. Fees for ancillary services, such as training or search activities.
· In kind contributions, e.g.;
1. Community construction of telecenter facilities,
2. Donated services to operate the telecenter;
3. Donated equipment.
· Cooperative mechanisms, as with a consumer cooperative;
· Cross-subsidies, as when telecommunications regulation make universal service requirements resulting in cross subsidies from highly profitable services, to marginally profitable services to the poor, or the E-rates used to finance school Internet access in the U.S.
· Public funding, justified by public goods aspects of telecenter services. Thus where the telecenter is serving public health, education, and other public goods needs, government financing may be appropriate, via:
1. direct government funding;
2. tax financing (as Internet e-commerce has been exempted from sales taxes in the United States, or the exemption from taxes of services to native American populations);
3. Governmental in-kind contributions would be a mixed form, as when a health center makes a room available without charge for a local telecenter.
· Special loan facilities, insurance, etc. for telecenter operators;
· Special funds, such as lotteries run for the initiation of telecenters, or the donations of part of consumer purchases to schools for the purchase of ICT equipment.

I would point out that there are a lot of different things out there that could be considered a telecenter. They range from Grameenphone’s ladies offering fee for call services from a cell phone; to public fixed-line telephones; to cybercafes; to fully ICT equipped business centers; to multifunction telecenters offering telephone, fax, copying, computer rental, desktop publishing, Internet, community radio, and ancillary services. Compounding these services with the variety of mixes of financing results in a multitude of business models.

This is a topic that merits some research on options and best practices.