Since development planners first recognized the immense socio-economic impact of communications, general hypotheses about impacts with regard to rural communications systems have evolved, and have been demonstrated to various degrees, in a wide range of studies since the early 1980’s.
In 2005, the study The Impact of Telecoms on Economic Growth in Developing Countries, has added to this long history of previous research, conducted over many years, to demonstrate that telecommunications has a significant impact on economic growth. This research has highlighted the particular impact of mobile communications penetration on economic growth.
The socio-economic impact of communications can be summarized as follows:
- General regional integration:
- Areas with communications are less isolated economically and socially, are better able to enter the market system, and will experience improved political administration and social services;
- The benefits can be described as macro-economic and structural, e.g., development of market system, and the enablement of the services and information sectors; and
- The level of impact is increasing and becoming more widespread the more mobile the communications medium is becoming .
- Market & social infrastructure:
- Typically 25-40 per cent of calls made from rural public phones or payphones in developing countries can usually be classed as related to administration, business or financial matters ;
- Related to commercial markets, better communications provide both the means and sources of information regarding the price of rural products, typically yielding fairer market relations and more efficient operation of the market system;
- Improved organizational management is possible – most organizations (e.g., government, health, education and transportation) and businesses run more efficiently as communications services improve, resulting in better coordination, stock ordering & replenishment, more timeliness, and quicker response to operational and maintenance needs; and
- New market and employment opportunities – businesses can organize better outreach, market access and market expansion.
- Personal urgent need to communicate:
- Typically 10-15 per cent of calls made from rural public phones or payphones can usually be classed as ‘personal urgent’. These typically relate to health, family emergencies or other matters considered urgent enough that some other form of communication – often personal travel to deliver a message – would have been necessary; and
- Urgent matters often include notification of family or social events, coordination of travel arrangements, or such matters as school exam results, deadline related matters (e.g., financial enquiries, school entry applications), etc.;
- Personal non-urgent communication:
- Up to 50 per cent of all calls are typically classed as personal and non-urgent, but nonetheless important enough that people are willing to spend 3-5 per cent of personal incomes on them; and
- The benefit enjoyed is the reduction of isolation for family members living elsewhere, especially with younger generation members studying or working in the capital city.
A compendium of cost-benefit results illustrating many of the above benefits are documented and discussed in the reference document Methodology for Economic Analysis of Telecommunications Projects.
The expected economic impacts and targets of a universal access and service (UAS) programme should be stated as specifically as possible, in order to assist with final selection or prioritization of projects. The Practice Note Specific regional and poverty reduction impacts in Mongolia provides an example for this.
- The Impact of Telecoms on Economic Growth in Developing Countries, Leonard Waverman, Meloria Meschi, Melvyn Fussi, March 2005.
- For example, evidence of this has been recorded in World Bank sponsored studies undertaken by Intelecon in Nigeria (2005), Burkina Faso (2004) and Mozambique (2005).