In the US many essential services work this way. Taxes pay for fire, police, roads, water, etc. Electricity & telecom are heavily regulated. Originally this started as a way to get coverage in rural areas. The government setup a non-compete franchise wherein a provider would agree to cover rural areas (even at a loss) but their exclusive rights would allow them to recoup costs. That alone wasn't a bad idea -- the US's adoption of electricity, telephone, and cable TV outpaced the rest of the world. This however is where it should have ended. Instead the exclusive coverage agreements mostly continue to this day. In spots where local government has decided to open competition the incumbent providers have such an overwhelming advantage that most smaller providers fail quickly but usually no one bothers trying. It's too capital intensive.