Fixed Telephone Lines
Telephone networks are complex systems of electrical connections that allow two people to communicate over distances. These telecommunication networks require extensive infrastructures. Many countries have been unable to invest in these expensive systems, and so their residents are unlikely to have fixed phones. This fact is especially true in rural areas of developing nations. The poverty experienced in these areas is often linked with isolation and lack of access to services, including communication.
Lack of Fixed Telephone Lines
Every country on this list has 0 fixed phones per 100 people, and the majority are located in Africa. Some of these places include Guinea, Nauru, Democratic Republic of Congo, South Sudan, Central African Republic, Nigeria, Chad, Burundi, Liberia, and Sierra Leone. Any landlines these countries once had are now outdated or have been destroyed by internal conflict.
Development of telecommunication phone lines in the western world helped promote economic growth. They allowed individuals and businesses to decrease transaction costs and provided business with a means of broadening their market. The increase in GDP surpassed the investment made in infrastructure. There is no doubt that telephone expansion is linked to economic growth. This same development did not, however, occur in the previously mentioned countries, nor in the following (which also have 0 fixed phones per 100 people): Guinea-Bissau, Tanzania, East Timor, Afghanistan, Mozambique, Republic of the Congo, Malawi, Haiti, Kenya, and Rwanda.
Factors Contributing to Under-Investment in Telephone Infrastructure
Although access to telephone communication has been linked to economic growth, it is usually not an investment focus for developing countries. There are several reasons for this. Telecommunications are typically government owned which means they follow governmental budgetary practices. In other words, the telecommunication industry must compete with other public services to receive budgetary allocations.
Fixed line infrastructure is likely viewed by governments in developing countries as the least of their concerns. Budget monies are instead allocated to sectors that have a more obvious and clear impact on economic and social development. This failure to invest in the communication sector has contributed to an increasing development gap between these places and more industrialized nations.
Consequences of No Landlines
Not only does a lack of landlines affect economic growth, but it also affected personal lives. When a household doesn’t have access to telecommunication, it can increase costs for even the simplest of tasks. The only substitute for telephones is physical transportation. Imagine being a subsistence farmer in the most rural location of one of the countries mentioned. To find out the cost of agricultural commodities involves leaving the farm, traveling to the nearest market, asking around, and returning the long trip home. This option versus being able to make a quick phone call. The lack of telephone infrastructure increases the cost of information. Transactions over very long distances would be even more expensive as one must travel before knowing about product availability.
Rise of Mobile Phones
Now that some of these nations might be in the position to consider investing in infrastructure, it seems that they are foregoing the expense and turning to mobile telecommunications. In fact, mobile phone lines have far surpassed fixed line communication methods. The reason for this is the lower startup cost and faster attainment when compared to traditional landline modes of telecommunications. Estimates suggest that mobile lines are 50% less expensive than fixed lines.
Increased communications, whether fixed line or mobile, have a positive effect on the economy and growth potential. This impact is twice as big in developing countries. Mobile phones allow individuals to determine product pricing and availability, take part in mobile money, and receive news and entertainment. Although this trend is beneficial, it has not yet reached the most rural locations as they lack even the most basic service infrastructures like electricity and water.