Mobile communication and socio-economic development: a Latin American perspective.

• Author: Fernandez-Ardevol, Mireia

The impact of information and communication technology is not limited to the sector in which it is produced, but rather it spreads to all sectors of production and consumption. This is also valid for mobile telephony.

[ILLUSTRATION OMITTED]

In addition, its influence increases as network effects do; that is, when the number of people using the service rises. Moreover, it shows a clear improvement over time--mobile devices incorporate more and better services while the quality of communications also develops. Infrastructure and service coverage grow and, at the same time, prices show a clear downward trend. Finally, the mobile phone also generates innovation because it promotes and facilitates the invention and production of new services, products, or processes. Examples are common, from the use of missed calls for livelihood activities to mobile banking, both in rural and urban areas.

All of these characteristics correspond to what is known as a general purpose technology. Benefits associated with the dissemination of a general purpose technology go beyond its application to business processes, and allow the generation of improvements in the quality and variety of products and services that are put on the market. As with landline phones, the spread of mobile telephony involves changes in the daily organization of private life and business. Whether involving large or small firms, or formal or informal businesses, from a purely economic point of view, we can identify a number of areas in which the presence of mobile devices is driving changes. Whether or not it operates in combination with fixed telephony, wireless communication allows greater management flexibility and speeds up the processes that depend on communication.

The available evidence shows that the use of mobile phones can reduce information access costs and uncertainty in decision making. This is valid if there are no technical or pricing barriers to accessing such information. When access to information becomes easier, traders are able to make more informed decisions and, consequently, market efficiency could improve. Transaction costs can be reduced and market transparency should increase.

The popularization of a particular type of information and communication technology can contribute to changing the production structure of an economy. This would contribute to productivity growth and could even modify the main sources of economic growth, as long as the organizational capacity...