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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.

Suggested Citation

  • Barrantes, Roxana & Galperin, Hernan, 2008. "Can the poor afford mobile telephony? Evidence from Latin America," Telecommunications Policy, Elsevier, vol. 32(8), pages 521-530, September.
  • Handle: RePEc:eee:telpol:v:32:y:2008:i:8:p:521-530
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    Cited by:

    1. 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.
    2. Sarin, Ankur & Jain, Rekha, 2009. "Effect of Mobiles on Socio-economic Life of Urban Poor," IIMA Working Papers WP2009-02-05, Indian Institute of Management Ahmedabad, Research and Publication Department.
    3. Luis Fernando Gamboa, 2009. "Strategic Uses of Mobile Phones in the BoP: Some Examples in Latin American Countries," Lecturas de Economía, Universidad de Antioquia, Departamento de Economía, pages 209-234.
    4. Balwant Singh Mehta & Nidhi Mehta, 2014. "ICT and Socio-Economic Empowerment of Rural Women: Case of Mobile Phone in India," Knowledge Horizons - Economics, Faculty of Finance, Banking and Accountancy Bucharest,"Dimitrie Cantemir" Christian University Bucharest, pages 103-112.
    5. 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, January.
    6. Yamakawa, Peter & Rees, Gareth H. & Manuel Salas, José & Alva, Nikolai, 2013. "The diffusion of mobile telephones: An empirical analysis for Peru," Telecommunications Policy, Elsevier, pages 594-606.
    7. repec:dau:papers:123456789/14815 is not listed on IDEAS
    8. Srinuan, Chalita & Bohlin, Erik, 2011. "Understanding the digital divide: A literature survey and ways forward," 22nd European Regional ITS Conference, Budapest 2011: Innovative ICT Applications - Emerging Regulatory, Economic and Policy Issues 52191, International Telecommunications Society (ITS).
    9. Claire Borsenberger & Denis Joram & Lise Martin, 2012. "Affordability of Postal Services Addressed to Households," Chapters,in: Multi-Modal Competition and the Future of Mail, chapter 9 Edward Elgar Publishing.

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