Published: Mon, Feb 2, 2009
Type: Case study

Vodafone recently launched their latest addition to their series of studies on the socio-economic impact of mobile (SIM). Entitled India: The impact of mobile phones, the report demonstrates that mobiles aid the process by which disadvantaged groups, including the low-skilled labor force, enjoy the fruits of economic growth.

The team of researchers, led by the Indian Council for Research on International Economic Relations(ICRIER) who produced the report, found clear evidence to suggest that mobile penetration facilitates economic growth. More specifically, it shows that Indian states with 10% higher mobile phone penetration will enjoy an annual average growth rate 1.2% higher than those with a lower teledensity.

The report contains specific studies of how mobile devices benefit rural farmers, small- and medium-sized enterprises (SMEs) and the populations of urban slums. The research also showed that information via mobile, such as weather reports and market prices, has begun to have an impact on productivity for the agricultural sector.

However, it also concludes that other infrastructure challenges, such as poor roads and a lack of refrigerated transport, need to be addressed in parallel in order for farmers to realize the full potential of access to information via mobile.

Neil Gough, Director of Public Policy – Emerging Markets at Vodafone Group, said, “We are pleased to have been able to fund this important study. As a company, we believe that public debate of these issues is fundamental to the development of effective regulation. The research demonstrates that access to telecommunications acts as a catalyst to realize productivity and efficiency improvements, thereby making it possible for the benefits of economic growth to be shared amongst a greater proportion of the population.”

Dr Rajiv Kumar, Director and Chief Executive of ICRIER, suggests that the research report should provide government with the analytical and empirical content to refresh the policy environment for telecommunications. He believes that certain policy changes could stimulate greater investment in Indian telecommunications, improve access to communication in poorer areas and ultimately lead to increased economic growth.

“India has a lower teledensity than many other emerging economies including China, Pakistan and Sri Lanka. We also lag far behind in terms of internet access,” said Dr Kumar. “It is therefore particularly important that in these challenging times we step up to the mark and create the appropriate regulatory environment to attract investment and sustain a world-class telecommunications service. Our global competitiveness depends on this.”

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