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Can the poor afford mobile telephony? Evidence from Latin America

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  • Barrantes, Roxana
  • Galperin, Hernan

Abstract

This study analyses the cost of a low-volume basket of mobile services across a sample of Latin American countries, and contrasts these results with standard income and poverty indicators. The main goal is to establish how affordable mobile services are for the poor. Three general findings emerge. First, the poor generally pay a cost premium for using prepaid subscriptions that allow better expenditure control, though in many cases this premium is much lower than expected. Second, affordability is an important predictor of mobile penetration. Overall, while affordable handsets and the calling-party-pays system allow a significant number of low-income Latin Americans to become mobile subscribers, the results reveal that the current tariff structure has an inhibiting effect on service consumption by the poor. Third, since affordability is the most significant barrier to extending the reach of mobile services, as well as the range of services used by the poor, priority should be placed on policies aimed at reducing tariffs and stimulating the introduction of commercial innovations for low-income groups.

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Bibliographic Info

Article provided by Elsevier in its journal Telecommunications Policy.

Volume (Year): 32 (2008)
Issue (Month): 8 (September)
Pages: 521-530

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Handle: RePEc:eee:telpol:v:32:y:2008:i:8:p:521-530

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Related research

Keywords: Mobile telephony Tariffs Affordability Latin America Digital divide Universal access;

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Cited by:
  1. Gamboa, Luis Fernando, 2010. "Strategic Uses of Mobile Phones in the BoP: Some Examples in Latin American Countries," REVISTA LECTURAS DE ECONOMÍA, UNIVERSIDAD DE ANTIOQUIA - CIE.
  2. Peters, Kay & Albers, Sönke & Kumar, V., 2008. "Is there more to international Diffusion than Culture? An investigation on the Role of Marketing and Industry Variables," EconStor Preprints 27678, ZBW - German National Library of Economics.

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