Policy Package 2. Connecting Poor Places to the Poles of Development
telephone and Internet services than their counterparts in South Asia and East Asia, as well as Europe and Central Asia. Mobile telephony’s comparative advantage over fixed telephony is strongest in low-density areas, where the cost per household of installing and maintaining cable connections is highest. However, the shift in rural areas from fixed-line to mobile telephony has been less pronounced in MENA than in other parts of the world. In all the other regions, the rate of rural mobile usage has overtaken that of fixed lines. In MENA, however, 37 percent of households have fixed lines and 26 percent have mobile lines. A probable reason is that MENA made significant early investments in extending fixed-line telephony to rural areas, achieving high rural usage rates compared with East Asia and the Pacific (10 percent), Latin America and the Caribbean (13 percent), South Asia (11 percent), and Sub-Saharan Africa (1 percent). Only Europe and Central Asia (46 percent) have higher rates of rural household fixed-line connections than MENA (ITU 2008).
Expansion of ICT Use in Lagging Areas When designing strategies to extend ICTs to lagging areas, it is useful to break the task down into two components: (a) the market efficiency gap and (b) the access gap (Navas-Sabater and Dymond 2002). The market efficiency gap is the difference between the current level of service penetration and the level achievable in a liberalized and stable regulatory environment. The access gap relates to the gap between leading and lagging areas that would remain under efficient market conditions because the lagging population cannot afford the market prices at which the service is offered. Sector reform will help close the market efficiency gap by increasing competition, reducing tariffs, and increasing supply. As can be seen in Table 5.6, fixed-line liberalization still has a way to go in MENA. The present and planned liberalization of the fixed-line and data markets in some MENA economies should enhance infrastructure-based competition in these countries. Allowing for international connectivity competition in most MENA economies will also lower international bandwidth costs, which will allow the Internet and data providers to start offering more advanced services at cost-based rates, and hence much lower rates, across the country (Arab Advisors Group 2008). Figure 5.7 compares the spread of communications technology in MENA economies with global trends around 2007–08. In 2007, Jordan was ahead of the global trend for cellular subscriptions, with Egypt, the Islamic Republic of Iran, Libya, Lebanon, and Syria lagging behind. In 2008, most MENA economies’ monthly cellular tariffs were below the global trend, but not Morocco’s and Lebanon’s. Broadband connections have been slow to grow in Libya and Syria.
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