Cell Mates: Mobile Phones and Digital Access in China

Information and communication technologies (ICT) are often touted as tools for spurring economic growth. But in developing countries, the infrastructure required to access the wired Internet is typically lacking, hindering governments’ ability to use ICT as a tool for economic growth. In countries like China, the digital divide – the gap between those who can access and use ICT and those who cannot – mirrors the enormous economic divide of the country. The coastal cities of eastern China are prosperous, and the rural central and western regions are impoverished.

A reduction in the digital divide has the potential to reduce economic divides in countries like China, and authors Loo and Ngan say mobile phones may be the key to doing so. Mobile phones have long been heralded as one solution for spurring economic growth, as they open up access to banking, education, and entrepreneurship without the need for expensive infrastructure.

In their article, “Developing mobile telecommunications to narrow digital divide in developing countries? Some lessons from China”, Loo and Ngan seek to determine (1) whether mobile telecommunications have narrowed the geographical digital divide in China, and (2) whether there were any government policies that were also effective in narrowing the divide. They analyzed data published in the China Statistical Yearbook and the Annual Report of China’s Communication Industry Statistics to track the relative teledensities of the urban and rural, and the coastal and inland regions of China before and after the introduction of mobile technology in 1987.

Loo and Ngan found that there was a substantial drop in the ratio (from 211.9 to 1.9) between the teledensities of east versus central China between 1990 and 2010, when the number of mobile phone subscribers increased by 858,980,000. However, it is not clear that the introduction of mobile phones was responsible for all of the reduction in the digital divide between eastern and central China. Significantly, in 1994 the eastern region still accounted for over 70 percent of total mobile subscribers.

The authors argue instead that improvements in digital access in rural China came as a result of a few important government policies. The first was a “Go West” campaign in 1999, which aimed to promote social and economic development of the interior and western regions of the country. The second was the government’s pledge to invest 200 million yuan to narrow the geographical digital gap between the eastern and western regions. These two policies boosted telecommunications hardware and software in the interior and central regions.

The third policy was the government’s approach to the launch of 3G licenses. Before the introduction of 3G, China Mobile had by far the biggest share in the mobile phone market. To increase competition, the Chinese government approved the least well-developed 3G technology to China Mobile and approved more mature technologies to its competitors, China Unicom and China Telecom, giving them a head start and support from handset manufacturers. This dramatically improved competition and reduced China Mobile’s subscriber share from 70 percent to 43 percent. Furthermore, the relative teledensities of 3G became much more even between the east and west than the teledensities of 2G had been.

The authors conclude that while mobile telecommunications can be used to overcome the high costs of providing telecommunication services in the rural areas of developing countries, they will not reduce the digital divide without additional help. Loo and Ngan argue that proactive government policies, like those seen in China, are necessary to support mobile telecommunications development across rural regions of the globe.

Feature photo: cc/Chris Kealy