Telecommunications Reform, Internet Use and Mobile Phone Adoption in the Developing World

Summary How do telecommunications policies influence technology adoption? Has regulatory reform helped mitigate or exacerbate the digital divide? We examine the effects of four policy reform strategies on a country's share of internet bandwidth, internet hosts, internet users, personal computers, and mobile phones. We argue that the best policy environment for the telecommunications sector is one maintained by an independent regulator that is not above representing the public interest or entering into public private partnerships to develop national information infrastructure. Holding other factors constant, privatizing the national telecommunications operator only has a few demonstrable effects, and the effects are mixed. Liberalizing the market for consumer communications services and separating the telecommunications regulator from direct control by the executive branch of government are, for the most part, constructive policies for encouraging technology adoption. Yet over time, too little public policy oversight usually has a negative impact on technology adoption. Regulatory independence mitigates against the digital divide, but regulatory withdrawal exacerbates it. Our findings offer greater coverage than prior research, and emerge from a time-series cross-sectional study of multiple technology indicators in 154 countries during the period 1990-2007.