Pantelis Koutroumpis

Mobile Telecommunications and the Impact on Economic Development

Using annual data from 192 countries over the period 1990–2007, we assess the impact of mobile telecommunications on economic growth. We find that this impact is smaller for countries with a low mobile penetration, usually low income countries. While in low income countries the mobile telecommunications contribution to annual GDP growth is 0.11%, for high income countries this is 0.20%. The increasing returns from mobile adoption are also emerging when assessing the impact on productivity growth. To promote mobile telecommunications penetration liberalization policies along with appropriate regulatory frameworks are recommended. Such policies should be pursued more forcefully in cases where serious shortcomings exist.

Diffusion of new technology generations in mobile communications

The study identifies factors that affect the diffusion of new generations of mobile telecommunications technologies. Per capita income, urbanisation and Internet/broadband penetration, as well as regulation, positively affect diffusion across all generations of mobile technologies. However, there are also several remarkable differences in diffusion patterns over generations. Diffusion of first generation technologies boosts the adoption process of second generation networks, but second generation adoption negatively affects adoption of third generation technologies. Second generation technologies are unaffected by the spread of third generation technologies. Competition between firms has been found to be the key determinant of the diffusion speed across all generations, but there are indications that the effect is dissipating in the transition from second to third generation. Second generation markets show a switch in the influence of standards competition, with a positive effect on diffusion in the early phase and a negative effect later on.

The Economic Impact of Telecommunications in Senegal

While the economic impact of telecommunications has attracted the focus of attention of research in the past, the area of sub-Saharan Africa has only recently become the subject of inquiry. Furthermore, the study of the region represents a case study by itself. Socio-economic parameters like economic stability and growth, compulsory education, access to basic services, rule of law and control of corruption shape an unpredictable environment and certainly affect the impact that wireless and broadband may have. Additionally, embryonic fixed line networks, limited banking facilities and patchy transport links may have an accentuated impact on the development and use of digital networks. In this paper a unique country-level sample was assembled for Senegal for the period 2004-2011 in order to measure the effect of wireless and broadband on the economic growth of the country. Our preliminary results suggest that mobile phones have a measurable impact on economic growth and lie within the estimates of previous work on a much larger scale. On the other hand, the economic effect of broadband cannot be measured yet because the technology is at its very early stages of adoption. However, the rapid growth of third generation services during 2011 suggests a transformation in this type of network access, which might result in important economic effects in the future.

The Latin American path towards digitization

Purpose – Digitization is defined as the social transformation triggered by the massive adoption of digital technologies to generate, process, share and transact information. This paper seeks to present a methodology followed to calculate the Digitization Index, a concept originally developed by Booz & Company, the global management consulting firm, with the support of the authors.Design/methodology/approach – This index consists of six elements capturing Ubiquity, Affordability, Reliability, Speed, Usability and Skill and 24 sub‐indicators measuring tangible parameters of perceived digitization metrics.Findings – The index indicates that countries are clustered as Digitally Constrained, Emerging, Transitional or Advanced, with varying degrees of contribution of digitization to economic growth. The Index is used to assess the situation of Latin American countries in terms of their progression to digitally advanced societies. In this context, the areas to focus on in the formulation of Latin America digita...

Measuring Socio-Economic Digitization: A Paradigm Shift

Digitization is defined as the social transformation triggered by the massive adoption of digital technologies to generate, process, share and transact information. Unlike other technological innovations, digitization builds on the evolution of network access technologies, semiconductor technologies, software engineering and the spillover effects resulting from their use. This paper presents a methodology followed to calculate the Digitization Index, a measure of country level of digitization, a concept originally developed by Booz & Company, the global management consulting firm. This index consists of six elements capturing Ubiquity, Affordability, Reliability, Speed, Usability and Skill and 23 sub-indicators measuring tangible parameters of perceived digitization metrics. The sample spans across 150 countries from 2004 to 2010. Countries are clustered as Digitally Constrained, Emerging, Transitional or Advanced. Once the index is defined, hypotheses regarding the contribution of digitization to economic growth, job creation and welfare are tested. In addition, a critical mass hypothesis is also tested as additional returns might derive from network externalities and spillover effects. The results provide strong support for the effect of digitization across all growth generating metrics.

Speed 2.0: Evaluating Access to Universal Digital Highways

This paper shows that having access to a fast Internet connection is an important determinant of capitalization effects in property markets. Our empirical strategy combines a boundary discontinuity design with controls for time-invariant effects and arbitrary macro-economic shocks at a very local level to identify the causal effect of broadband speed on property prices from variation that is plausibly exogenous. Applying this strategy to a micro data set from England between 1995 and 2010 we find a significantly positive effect, but diminishing returns to speed. Our results imply that disconnecting an average property from a high-speed first-generation broadband connection (offering Internet speed up to 8 Mbit/s) would depreciate its value by 2.8%. In contrast, upgrading such a property to a faster connection (offering speeds up to 24 Mbit/s) would increase its value by no more than 1%. We decompose this effect by income and urbanization, finding considerable heterogeneity. These estimates are used to evaluate proposed plans to deliver fast broadband universally. We find that increasing speed and connecting unserved households passes a cost-benefit test in urban and some suburban areas, while the case for universal delivery in rural areas is not as strong.

The Impact of Maximum Markup Regulation on Prices

We study the repeal of a regulation that imposed maximum wholesale and retail markups for all but five fresh fruits and vegetables. We compare the prices of products affected by regulation before and after the policy change and use the unregulated products as a control group. We find that abolishing regulation led to a significant decrease in both retail and wholesale prices. However, markup regulation affected wholesalers directly and retailers only indirectly. The results are consistent with markup ceilings providing a focal point for collusion among wholesalers.

How important is IT

Information and communication technology patents are more influential on subsequent inventions than are other types of patents.

Auction design and auction outcomes

We study the impact of spectrum auction design on the prices paid by telecommunications operators for two decades across 85 countries. Our empirical strategy combines information about competition in the local market, the level of adoption and a wide range of socio-economic indicators and process specific variables. Using a micro dataset of almost every mobile spectrum auction performed so far—both regional and national—we show that auction design affects final prices paid. Two designs (SMRA with augmented switching and CCA with core pricing) result in auctions with systematically higher normalized returns. Further, we document that spectrum ownership appears to affect prices paid in subsequent auctions. We discuss the mechanisms of cost minimization and foreclosure faced by operators in different regulatory environments. Our findings have implications for policy-makers and regulators.