The Telecommunications Divide Among Indian States

Telecommunications Policy 42(7), 530-551, August 2018

Posted: 17 Feb 2020

See all articles by Hiranya K. Nath

Hiranya K. Nath

Sam Houston State University - College of Business Administration - Department of Economics and International Business

Hemanta Barman

Indian Institute of Technology (IIT), Guwahati, Students

Mrinal Kanti Dutta

Indian Institute of Technology Guwahati

Date Written: May 18, 2018

Abstract

Using data for 16 major states in India from 2001 to 2015, this paper examines the patterns, distribution dynamics, and the drivers of telecommunications (telecom) services across different states. We apply both parametric and nonparametric econometric techniques to study the distribution dynamics of telecom services across the states. Further, we employ the generalised method of moment (GMM) to examine the determinants of telecommunications services in India. Our results indicate that the interstate gap in telecommunications services has been declining over time and there is a tendency for convergence in teledensity towards the national average. The regression analysis suggests that per capita income and network externality are significant determinants of teledensity across states in India. Furthermore, literacy rate and relative size of the service sector are independently significant predictors of teledensity. If we consider rural and urban areas separately, there are some important differences. For example, while the interstate gaps in telecom services in rural areas seem to have declined, there is little evidence of such a tendency in urban areas. However, the regression results with respect to the importance of per capita income and network externality for telecom services are robust to the rural-urban divide and to the inclusion of additional explanatory variables. The findings of this study have important policy implications.

Keywords: Telecommunications Services, Information and Communication Technology (ICT), Teledensity, Digital Divide, India

JEL Classification: L96, L86

Suggested Citation

Nath, Hiranya K. and Barman, Hemanta and Dutta, Mrinal Kanti, The Telecommunications Divide Among Indian States (May 18, 2018). Telecommunications Policy 42(7), 530-551, August 2018, Available at SSRN: https://ssrn.com/abstract=3473309

Hiranya K. Nath

Sam Houston State University - College of Business Administration - Department of Economics and International Business ( email )

SHSU Box 2118
Huntsville, TX 77341-2118
United States

Hemanta Barman (Contact Author)

Indian Institute of Technology (IIT), Guwahati, Students ( email )

Doul Govinda Road
Amingaon
Guwahati, Assam 781034
India

Mrinal Kanti Dutta

Indian Institute of Technology Guwahati ( email )

Doul Govinda Road
Amingaon
Guwahati, Assam 781034
India

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