The Urban-Rural Telecommunications Divide Endures: A Historical Perspective from Landline Telephony

The popular press and academic literature show that the urban-rural divide persists with regard to recent telecommunications technologies, such as broadband and wireless service. As was the case for landline telephony, this lack of deployment in rural areas is rooted in cost differentials and lack of agglomeration economies. This paper provides historical insights on this divide, using 1990 data on voice communications in a region located in the northeastern United States, and investigates (1) whether there are differences in telecommunications usage between urban and rural firms, (2) whether advanced telecommunications technologies provide an economic advantage to rural firms, and (3) what are the factors encouraging and inhibiting the provision of these technologies in rural areas. Exchange-level data on telephone usage by eleven economic sectors are first linked, through regression analysis, to data characterizing the exchange employment, rural character, availability of advanced technology, and geography. Rural activities turn out to use telecommunications less than urban ones in the absence of advanced technologies, but the latter tend to significantly increase usage. Next, a logit model is estimated to link the deployment of one advanced technology—digital switching—to market and geographical variables. The results tend to support the idea that an advanced telecommunications infrastructure in rural areas may be important to attract activities that make heavy use of telecommunications, but also that its provision is inhibited by the traditional rural barriers of distance and low population density.

Reaching the Hard to Reach

Information Technology has become core in national development across the globe; hence, the government of Botswana decided to use ICTs to give rural people newer options of communicating, sourcing, and sharing information through the introduction of a project called Nteletsa 2. A village, Kaudwane, whose residents have relied on the word of mouth for so long, is now communicating through mobile phones as a result of this program. This project is done under the Rural Telecommunications Strategy with a goal of providing telecommunications services to rural areas in the most cost effective, efficient, logical, and transparent manner possible. The government works in partnership with Botswana Telecommunication Centre which provides mobile services with capability to deliver Internet, voice, and data. The project also uses Public Communications Centre (PUCC) now referred to as Dikitsong Center operated by communities in partnership with Mascom or Botswana Telecommunication Center. Services include provision of an Internet café, charging individual cellular phones at a fee, and selling airtime to both locals and visitors. The result is great: employment creation and easier communication amongst individuals and visitors. However, low literacy level of some villagers limits use. Also, there are high maintenance costs due to poor roads.