In many developing countries, there is limited information regarding the cost and demand for semi-urban and rural Internet provision. While field demand studies are very helpful overall and in some countries provide the very first survey-based data from rural areas, they often still yield insufficient solid data on Internet demand in some countries where many people have not used the Internet before. A potential guide for estimating cost and demand is through examining the experience of other universal access and service (UAS) programme designs and tenders. In 2004 in Uganda, district level Internet POPs have been subsidized between USD 10,000 and USD 60,000 and public Internet centres for between USD 15,000 and USD 25,000, however, data evaluating their sustainability are not yet available. Subsidy estimates include the capital, the cost of the digital bandwidth leased from terrestrial service providers, and the initial promotion, marketing and basic training.
For estimates of potential subsidy requirements for an Internet programme, it is usually recommended to offer a value equal to almost the entire capital costs of a district centre POP and a public access centre. The reason for this is that demand for Internet is typically less immediate and takes more time to build up, and operating, maintenance and staff costs in districts are considerably higher than in cities.
Offering the entire capital costs as the maximum subsidy, and then letting the market determine the real subsidy through competitive bidding, ensures that it will not be under-estimated. As an example, capital costs for the Internet component of a pilot in Mozambique are estimated at USD 75,000. This included VSAT backhaul as the worst-case scenario. Details of the cost components are shown in the Table below:
Source: Mozambique Universal Access Internet pilot programme 2007