The Impact of Mobile Phone Telecommunications on Economic Growth in India and Sub-Saharan Africa and the Analysis of Mobile Phone-based Business Models

This paper intends to analyze the effect of the rapid growth of mobile phone subscriptions on economic growth in India and Sub-Saharan Africa. The first part of the paper tests this relationship quantitatively using a panel data regression based on an aggregate production model. The analysis results for India find a positive and significant relationship between mobile telecommunications density and the level of GDP in Indian states while a more detailed analysis shows that it is the growth of mobile phone subscriptions in rural areas that significantly drives this impact. Concerning the analysis on Sub-Saharan Africa, the results show that the relationship between mobile phones and economic growth is also positive and significant for middle and high income countries in Sub-Saharan Africa; yet about 10 times weaker than in India. Finally, the last section of the paper focuses on the qualitative aspect of the analysis and examines the impact of mobile phones through the case study of three mobile phone-based business models. Each of the companies selected has the particularity that its business model contributes to the improvement of the education, agriculture or health sector, all of which constitute important factors for development. The case studies help understand how companies are able solve a development issue by leveraging the potential of mobile phone usage and provides insights in the main challenges to overcome for mobile solutions to achieve scale and sustainability.

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