Potential advantages of being a USO provider

Identifying the range of benefits in being a USO Provider is essential to the success of any programme. The intangible benefits of being a USO provider are as follows:

  • Life cycle effects – customers in an area may not initially be profitable but may become so in the future;
  • Non-Universal Service Obligation services – the benefit that accrues by virtue of having a USO presence and infrastructure and thereby being able to offer non-USO services at marginal cost;
  • Ubiquity – the advantages of having a ubiquitous presence as a result of being the universal service provider (USP) and thereby having a greater profile with potential customers;
  • Brand enhancement and corporate reputation – the enhancement of a provider’s brand and image as a result of the national role of the USP and the ability to leverage this into marketing and advertising;
  • Payphone advertising – the benefit of being able to advertise on payphones provided under the USO;
  • Volume discounts – the cost savings in equipment made as a result of providing the USO; and
  • The network effect – the value of adding additional users to the network and the increased usage of the network.

Consideration should also be given to what would occur if the USP were relieved of the USO; if the USO ceased, would the USP actually cease service to USO areas?

Source: DCITA Review of USO, Attachment I (quoting Ovum study).

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