A Cross-Country Assessment of the Digital Divide
This paper considers the constraints on information and communications technology (ICT) services growth. The focus of this analysis is on the drivers of demand per se, and not service growth as a function of infrastructure deployment and service availability. Indeed, given the investment required to design and deploy next generation networks, this focus raises the possibility that once networks are in-place, the price may not be affordable to most households. The policy implications of that scenario include significant (publicly funded) subsidies or increased regulation. We examine the growth in telecommunication and data services by constructing a cross-country model of countrywide expenditure shares. The analysis compares growth rates by country against the share of income allocated to communication service to infer an upper limit on potential market saturation. The analysis provides an alternative perspective on the ‘Digital Divide’ by separating the demand for advanced services into socio-economic (prices, income, demographics) and policy (universal access, availability) factors.
KeywordsGlobalization Index Expenditure Share Mobile Subscription Communication Share Communication Expenditure
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