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Home > Thailand Article > Empirical Evidence of Network Externality of Thailand's Telephone System

Empirical Evidence of Network Externality of Thailand's Telephone System

Introduction

Telecommunications infrastructure is a crucial element for economic development, especially for developing countries. However, telephone service in developing countries is typically characterized by a supply that does not meet demand. This means that the telephone service may not be available in some areas, or that there may be delays in getting a telephone. In terms of telephone usage, it means that telephone calls may not go through during peak hours because of congestion. As the Maitland Commission (1984) noted, telecommunication is a missing link in much of the developing world.

During 1980's, the problem of telephone shortage in developing countries had been modestly reduced because of changes in telecommunications technology and policy.

Hudson (1995) found that the average growth of the telephone line capacity per 100 populations in developing countries between 1980-1990 was many times higher than the average growth of their per capita GNP. However, the average level of telephone line capacity per 100 population for the low-income and the lower middle-income economies was relatively low, i.e., 0.5 lines per 100 population and 5 lines per 100 population respectively. Thus, there is still a significant gap in the access to telecommunications between the industrialized and the developing countries.

Can read full article at http://thailand2009.blogspot.com/2007/06/empirical-evidence-of-network.html

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