Understanding Mobile Service Substitution and the Urban-Rural Digital Divide in Nigeria
16 Pages Posted: 3 Apr 2017 Last revised: 23 Aug 2017
Date Written: March 31, 2017
Across Sub-Saharan Africa (SSA), Internet penetration has lagged behind developed countries. Within countries in SSA, this divide exists between urban and rural areas with the offline population largely in rural areas. Mobile technologies have been identified as a means of leapfrogging the relatively expensive fixed Internet access and bridging the gap between the connected and unconnected populations. Furthermore, over-the-top services – that allow users to make calls and send messages over the Internet – and social networks have been a driver of Internet traffic in SSA. Using panel data from January 2016 to June 2017 of the billing records of 2 million unique customers retrieved from a mobile carrier in Nigeria, this study seeks to understand the urban-rural digital divide and how the relationship between cellular voice and mobile Internet varies across this divide. The results show that the increase in total minutes of voice calls, and the total volume of data used by the sample over time, is largely driven by an increase in the average volume used per person. Urban users have a significantly higher use of mobile Internet than rural users. The result showed mobile Internet is both a substitute and a complement to voice calls. The substitution was weaker for males, older users, those living in the South West region and those with a longer tenure on the network. Urban users also had a weaker substitution compared to rural users, while urban female users had a higher substitution than rural females.
Keywords: digital divide, mobile, Internet, Nigeria, mobile service substitution, price
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