Narrowing the “Digital Divide”: The Role of Fixed and Mobile Infrastructure

Ryan Hawthorne and Lukasz Grzybowski

Journal of Economics & Management Strategy, 2025, vol. 34, issue 4, 799-829

Abstract: We study the substitution between fixed and mobile broadband services in South Africa using survey data on 134,000 individuals collected between 2009 and 2014. In our discrete‐choice model, individuals choose fixed or mobile voice and data services in a framework that allows these services to be considered substitutes or complements. We find that there is substantial heterogeneity in the perception of these services as substitutes/complements. We use our model to simulate the uptake of fixed and mobile broadband across various demographic groups under different policy interventions, including (i) a reduction in mobile data prices, (ii) an expansion in fixed‐line coverage, (iii) a widespread distribution of computers, and (iv) broader Internet access in schools and workplaces. Our results suggest that, when applied in isolation, these interventions do not significantly increase Internet access among poorer households. In particular, the uptake of fixed broadband would remain limited, even if accessible to all households. This is because many households prefer mobile Internet access, perceiving it as a substitute for fixed broadband.

Date: 2025
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