Narrowing the ‘digital divide’: the role of complementarities between fixed and mobile data in South Africa

Working paper 792
Author(s): 
Ryan Hawthrone and Lukasz Grzybowksi
Publication date: 
September, 2019
Classification-JEL: 

We study substitution between fixed and mobile broadband services in South Africa using survey data on 134,000 individuals between 2009 and 2014. In our discrete-choice model, individuals choose fixed or mobile and data services in a framework that allows them to be substitutes or complements. We find that voice services are complements on average but data services are substitutes. However, many consumers see data services as complements. Our results show that having a computer and access to an internet connection at work or school are more important that reducing mobile data prices by 10% in driving broadband penetration.

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