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Welfare Effects of Introducing Competition in the Telecom Sector in Djibouti

Author

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  • Decoster,Xavier Stephane
  • Lara Ibarra,Gabriel
  • Mendiratta,Vibhuti
  • Santacroce,Marco

Abstract

Djibouti is very well placed, as a landing site of undersea fiber optic cables, to benefit from the digital economy. However, the prevalence of a single national telecom operator in the country has stifled service delivery and innovation in the telecom sector. Mobile broadband coverage and access to internet in Djibouti in 2018 remains below that of many Sub-Saharan African countries. This paper simulates the impact of the introduction of competition on the telecom sector's prices and its implications for households'welfare. The analysis finds important gains in welfare among current users of telecom services, with the largest gains going to the richest households. On the extensive margin, the analysis also finds a higher likelihood of take up of telecom services across the consumption distribution but skewed toward the rich. More work is needed to understand the implications of changes in the telecom sector, especially as greater access may lead to more unequal access, at least in the short term.

Suggested Citation

  • Decoster,Xavier Stephane & Lara Ibarra,Gabriel & Mendiratta,Vibhuti & Santacroce,Marco, 2019. "Welfare Effects of Introducing Competition in the Telecom Sector in Djibouti," Policy Research Working Paper Series 8850, The World Bank.
    • Handle: RePEc:wbk:wbrwps:8850
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    Cited by:

    1. Granguillhome Ochoa, Rogelio & Lach, Samantha & Masaki, Takaaki & Rodríguez-Castelán, Carlos, 2022. "Mobile internet adoption in West Africa," Technology in Society, Elsevier, vol. 68(C).
    2. Masaki, Takaaki & Ochoa, Rogelio Granguillhome & Rodriguez Castelan, Carlos, 2020. "Broadband Internet and Household Welfare in Senegal," IZA Discussion Papers 13658, Institute of Labor Economics (IZA).
    3. Rodríguez-Castelán, Carlos & Araar, Abdelkrim & Malásquez, Eduardo A. & Granguillhome Ochoa, Rogelio, 2022. "Competition reform and household welfare: A microsimulation analysis of the telecommunication sector in Ethiopia," Telecommunications Policy, Elsevier, vol. 46(2).

    More about this item

    Keywords

    Information Technology; Inequality; Telecommunications Infrastructure;
    All these keywords.

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