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Economic Development by Telecom (ETE 521 L8)
Telecommunication access in developing countries like Bangladesh has economic and social benefits. Studies have found that phones enable important financial discussions for rural families receiving remittances. In Bangladesh, phones have also been used to generate income by reselling minutes. However, these income benefits are not seen everywhere. Other research found telephones save time and costs for travel or postage but have little direct impact on income generation, except for wealthier individuals. Phones also strengthen social networks which are important for informal economies, helping to access information on jobs, remittances, and housing. While business uses are important, most phone use in developing countries is for social contact with family and friends.
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Economic Development by Telecom (ETE 521 L8)
- 1. ETE 521: Telecommunication Businessand Management Lec 08: Economic Development and Telecommunication Services
- 2. Telecommunication and Globalization ofthe Value Chain of the Service Industry.
- 3. Advances intelecommunications technology have enabled a disruptive transformation of the global business services value- chain.
- 10. Perceived economic benefitsof telecom access at the Bottom of the Pyramid in emerging Asia
- 12. Bangladesh isa widely cited example, where telecommunication is alleged to be particularly important in contributing to incomes of many poor families who depend on remittances from members working abroad. Richardson et al. (2000) found that the discussion of financial matters is a very important use of the phone among the rural poor, thus enabling financial transactions. In addition, phones are used as direct income generating devices in rural Bangladeshi villages through the ‘resale of minutes’. This however is done with the support of micro-loans to make the initial purchase of the phone and subsidized call rates. Richardson et al. (2000) as well as Bayes et al. (1999) demonstrated the income benefits arising from this kind of business to be considerably large. However, these two phenomena are not commonly seen in other settings.
- 13. Souter etal. (2005) assess the impact of telephones on the livelihoods of low-income rural communities in Mozambique, Tanzania and Gujarat (India). Impacts on financial capital are mixed, with most of it coming from saving travel time and cost or postage cost, but little impact on income generation is seen. Only the better-off (in terms of wealth and education) see greater benefits in income generation. Impacts on social capital through networking, especially within the family are large.
- 14. A smallSouth African study of the use of telecommunication showed that while as a proportion of calls, the majority of calls among those studied were for social purposes, the social networks maintained by the telephone were key to reinforcing livelihoods, seeking information for example about employment opportunities, securing remittances, finding housing etc. (Skuse & Cousins, 2008) Such social networks are key where the informal economy predominates.
- 15. The ‘social’use of phones has also been seen in several other studies. Zainudeen, Samarajiva and Abeysuriya (2005), in a study conducted among financially constrained users in several localities in India and Sri Lanka found that the large majority of phone use was for ‘keeping in touch’ with family and friends rather than instrumental uses such as business and financial transactions. Bayes et al. (1999) also cite ‘social cohesion’ availed of by telecom users, especially in the case of Bangladesh where many families have members working abroad. Such ‘social’ use is not to be considered ‘frivolous’; as the mere ability of families to stay in touch contributes to better quality of life. Bayes et al (1999) also note the noneconomic benefits of phone access in rural Bangladeshi villages, such as improved law enforcement, disaster-communication, and increased social kinship. 2006).
- 18. In general wefind that the BOP valued highly the contactability any time, anywhere that (particularly) mobile communication allows. In fact, the contactability brought about through phones is one of the key reasons that was seen to be driving people to get their own connections. The ability to obtain information (any information) in an instant was also highly valued. Some interesting findings that emerged from the Pakistani qualitative studies, the only Muslim country where separation of men and women were relatively more pronounced, were that the males supported the notion that mobiles have reduced the dependence of females on the males in running general home errands.
- 24. The economiccontribution of mobile services in the Europe Union before its 2004 expansion 1 A report to the GSM Association, 2005
- 25. The mobileservices industry now makes a major contribution to the GDP of the EU15 region: • it generated €106 billion of GDP in 2004, 1.1% of total GDP in the EU15 • in terms of GDP contribution it is bigger than industries such as mining and quarrying and is approaching the same size as the agriculture, forestry and fisheries industry • it is larger than other ICT industries such as the supply of end user hardware or software and is growing significantly
- 26. The industryis also a major generator of high value added jobs in the EU15: • the industry itself employs 423,000 staff, who are on average generate nearly 2.5 times as much GDP as the average EU 15 worker • a further 1.3 million jobs depend on the industry. These are of two kinds. 740,000 workers are employed in providing the industry with support services of various kinds while a further 600,000 jobs are generated when governments, shareholders and lenders spend the tax revenues, dividends and interest payments generated by the industry • a further one million jobs depend on expenditure in the economy created by the industry (the multiple
- 34. What isthe nature of value addition in Bangladesh’s Telecom Sector?
- 35.