Public-private alliances for telecommunications development : Intracorporate baby bells in the developing countries

While telecommunications has been touted as necessary for development, governments tend to spend relatively little on telecommunications development. The question of the importance of telecommunications investment in relation to other governmental choices in budgetary expenditure (gross fixed capital investments, social welfare and economic services) is studied through a devised ranking system based on standardized regression coefficients. In a sample of nine developing countries, telecommunications ranks last, supporting existing government policies. Four countries were also studied individually. These studies show that telecommunications investments are relatively more effective in upper-middle-income countries than in lower-middle-income countries, supporting the idea that telecommunications should follow rather than lead basic development. Evidence is found supporting a complementary nature for telecommunications investment. Using these findings and current thinking on joint public-private efforts towards development, a plan for a government-private enterprise telecommunication services strategic alliance is proposed.