Teleuse on a shoestring: Poverty reduction through telecom access at the bottom of the pyramid

Posted on December 3, 2007  /  0 Comments

by Harsha de Silva & Ayesha Zainudeen
In Does inequality matter? Exploring the links between poverty and inequality (p. 135-167), Edited by Prashan Thalayasingam & Kannan Arunasalam. Published by CEPA, Colombo, 2007

Pre-publication version available for download. The paper was presented at the Centre for Poverty Analysis Annual Symposium on Poverty Research in Sri Lanka (6-7 December 2007, Colombo)

Much has been said of the benefits of access to telecommunication especially at the ‘Bottom of the Pyramid’. The economic as well as social benefits from such access can, in theory enable people to graduate from poverty and also contribute more widely to development. Thus it can be argued that inequality in access to telecom services can lead to limitations in fighting poverty.

Many in the ‘ICT for development’ movement highlight the benefits that telecommunication, the Internet and other information and communication technologies (broadly put, ICTs) can bring to the table in the fight against poverty. A number of studies have attempted to demonstrate the impacts of access on income at the macro-level. However supporting evidence for these arguments at the household level is limited at best.

This paper takes a unique look at telecom access and studies the perceived impacts of direct access to telecom services, that is, telephone ownership at a household level at the ‘Bottom of the Pyramid’ in five developing Asian countries. It focuses on the perceived economic impact (positive or negative) of telecom ownership in terms of the potential to increase indirect income generation capacity or save on expenditure or transactions costs. The findings reveal that some telecom users do perceive the economic benefits of direct access to be high, but this finding is not seen across the board for a number of reasons explained.

The paper is based on a large sample survey of telecom users at the BOP in Pakistan, India, Sri Lanka, the Philippines and Thailand. Section 2 reviews the existing literature on the impacts of telecommunication. Section 3 explains the study design and methodology, and examines the difficulties faced in conducting a study of this nature and the methodological innovations undertaken. Section 4 explores in detail the impacts of telecom services at the BOP in the five countries. Section 5 concludes, looking at the policy implications from the study.

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