TELE-DENSITY is commonly used to measure the level of development in telecommunication. Most of researchers associate the level of a country’s telecommunication infrastructure with its teledensity.
A standard definition of teledensity refers to the number of telephones available per hundred inhabitants of a particular territory. Today, teledensity is the basic measure of telecom development just like GDP per capita which shows the economic strength of a country. It also shows the strength of telecom infrastructure.
The next question for researchers is obvious— how teledensity is to be improved. Some opine that increased investment in telecommunication infrastructure will boost the teledensity while others argue that investment in telecom infrastructure alone without improving other socio-economic conditions will not increase the teledensity. However, it is now considered view that telecom is a basic sector for the development.
Sound infrastructure in telecom development is viewed as a major pre-requisite for the economic integration in this globalized world. World Bank in its report in 1990 stated that the establishment of a modern, reliable and rapidly expanding telecommunications infrastructure contributes considerably to the promotion of a variety of economic expansion activities.
Historically, there exists a wide gap between the teledensity of developing and developed countries. International Telecommunication Union (ITU) reported in 2003 that teledensity in the least developed countries is about 0.29 per cent which means that one telephone line for 300 people. In some countries teledensity surpasses 100 per cent which means that some people subscribe to more than one telephone line.
In the decade of 1990s, massive research was conducted in telecom sector and many studies showed positive relationship between telecom growth and economic development. One study showed that teledensity investment projects brought average financial rates of returns of 18 per cent and economic returns ranging from 20-50 per cent.
Some of the studies found that growth in teledensity brought a variety of social benefits in addition to economic benefits in developing countries. Social benefits were identified in health, social services delivery, and education and development projects.
These benefits made the developing countries realize to invest more in telecom development. Since, the developing countries have little sources to invest in the infrastructure, the only option was private investment. Consequently, a wave of telecom liberalization has been observed across the developing world since early 1990s which brought telecom tariffs down and expanded the services rapidly.
In terms of telecommunication penetration, Asian economies are taking lead and expanding rapidly. Transfer of latest technology is no more a hurdle for the growth of telecom as telecom giants of the world are taking over the sector in developing countries in collaboration with local investors or some time having solo flights.
Pakistan opened its basic telephony market for private investors in 2003 and introduced more competition in cellular market by awarding two more licenses at attractive prices to foreign based companies. Resultantly, a rapid growth in penetration in terms of teledensity has been observed in Pakistan in a few months.
Every 14th Pakistani possesses either cell phone, WLL or fix line phone across the country. Five years back every 33rd Pakistani had this facility. Teledensity has improved manifolds in the last few years. The total teledensity has crossed 13.6 per cent which is 3.5 percentage point higher than India who opened its market much earlier than Pakistan. Two new companies have crossed the million mark in their subscription.
In the new telecom policy, new licensees are required to cover 70 per cent of tehsil headquarters all across Pakistan in two years and it is great challenge for Pakistan Telecom Authority to ensure the rollout obligations by cellular mobile operators.
Despite the fact that Pakistan has observed a fast growth in Teledensity, rural urban disparity is still wide which needs to be addressed. Currently, fixedline rural teledensity is just 1.3 per cent as compared to 7.9 per cent in urban Pakistan. Similarly, there also exists the digital divide among four provinces.
Balochistan is at the lowest ebb where total fixed line teledensity is just 1.9 per cent while it is 2.7 per cent in NWFP and 4.1 per cent in Sindh province. In cellular, Balochistan is again lagging behind other provinces. Cellular teledensity in Balochitsan is just 3.4 per cent while in Sindh it is 11 per cent. Cellular teledensity in Punjab and NWFP is 8.3 and 5.4 per cent respectively. The Ubran-rural disparity needs to be removed.
The boost in teledensity has helped to achieve over eight per cent economic growth. It is estimated that a 10 per cent rise in the teledensity can increase the GDP growth from 0.2 to 0.6 per cent.
TELE-DENSITY is commonly used to measure the level of development in telecommunication. Most of researchers associate the level of a country’s telecommunication infrastructure with its teledensity.
