World Bank Technical Paper No. 359. As the telecommunications sector evolves toward a more competitive environment in which the private actors become the main players, it is essential to develop policies that will reduce the disparities between urban and rural telecommunications services. This report provides a comprehensive analysis of the technical and financial parameters that have to be considered in formulating such policies. It presents an array of options for commercial operation of rural telecommunications and challenges the general perception that rural telecommunications services are unprofitable. It demonstrates that services can be economically delivered to rural areas at affordable prices while simultaneously providing reasonable financial returns to investors. A planning tool kit is included that assists in the design of the various options.