Introduction to Sociology

Course code: SOC112.1

Telecommunication sector of Bangladesh: An analytical study

Submitted by

Name ID
Tasmia Zaman 2021210000061
Fardin Islam Nahin 2021110000008
Ariful Islam Emon 2021110000001
Fahima Yeasmin 2021210000015
Israt Jahan Noor 2021210000046
Jahidur Rahman Chayan 2021110000032
Md. Nahid Hasan 2021110000033
S.M. Sayem 2021110000022

Submitted to

Dr. Md. Azizur Rahmam

Assistant Professor
2|Page

The Role of Telecommunication over the

Economic Development of Bangladesh
Southeast University, Bangladesh

Abstract: Telecommunication, as gift of modern science is largely different from any other traditional
infrastructure. From international market to domestic market, corporate communication to personnel
communication, telecommunication is the prime way to maintain the continuous and instantaneous flow of sharing
information. From business perspective of economic activities of modern world, through the communication
channel telecommunication not only has significant influences over the economy in term of GDP per capita but also
serve many people by creating job opportunities. Hence increasing employment rate may also another significant
factor to enhance economic development. Investment in infrastructural development and earned revenue may have
strong impact on the GDP per capita in an economy. As a result, for the potential role of the telecommunication, a
modern world as well as economy without telecommunication cannot be thought for one moment. This paper is a
devoted best effort to find the relationship between telecommunication and Bangladesh economic development. To
analyze this context more extensively and reliably, this paper fundamentally focuses on the relationship between
various variables under the construct of telecommunication and the economic development. To define this
construct into more concrete way several multiple simpler variables are implemented such as teledensity,
investment in telecommunication industry, revenue contribution percentage of GDP, GDP per capita, employment
rate etc through OLS regression models associated with least square method. This paper indicates
telecommunication industry has significant and positive impact over the economic development of Bangladesh.
3|Page

1. INTRODUCTION
The telecommunication industry around the world achieved a dramatic growth of advancement since 1980s. Since then,
first the developed countries around the globe began to make improvement in telecommunication technology to maintain
a continuous flow of communication which eventually intensifies their economic activities by providing a more developed
platform of communication. On the other hand, developing countries also took initiative when it becomes prudentially
evident that the role of telecommunication over the economic development is significant. As a part of the initiatives,
privatization of telecommunication sector was one of the best efforts that was taken by almost every developed and later
on by developing counties. As the adoption of telecommunication technology around the world is more than ever Harald
and Pantelis (2010) postulated that over the last three decades mobile telecommunication industry has rapidly grown
around the world. They also argued that the positive influence of telecommunication technology is more associated with
developing countries with a subscription of 3.2 billion as in developed countries the subscription is only 1.4 billion.
Gruber and Verboven (2001) argued that impact of the telecommunication investment has significant level of positive
impact on the macro economical dimension of a country. Mobile phone penetration is one of the major reasons behind this
investment which eventually contribute towards the economic development. Jotischky (2010) argued that
telecommunication operators invest in the development of network in Africa which actually ensures the benefit would be
enjoyed across the continent. As a mandatory and progressive part of modern telecommunication, internet is becoming a
prerequisite in the development for any economy. This argument is also supported by Jensen (2007) by claiming that the
fishermen of India are utilizing internet to get the information and location about that market which offers the highest
price for their products. As a result, the possibility of positive impact of internet over the economic development is
endless. Moreover, internet as a crucial tool of telecommunication technology has significant impact on economic
development as bank, stock market, insurance company, mutual fund, corporate offices all of their transaction flow,
accounts and documents largely rely on internet directly. As the role of telecommunication over economic development is
worldwide accepted without hesitation, Tella and Ahamefule (2002) claimed that communication tools such as
telephones, mobiles, and internet are becoming the prerequisite for economic success and personnel achievement.
This research paper will investigate whether there is any significant relationship really exists between telecommunication
and economic development of Bangladesh. To find the answer this paper will analyze 41 years telecommunication and
economic data through multiple OLS regression models based on only Bangladesh perspective. It should be noted that
with other variables which are not considered in this paper, different established regression models might give different
complex findings. Moreover, the telecommunication impact over the economy also depends on the duration of
telecommunication industry's presence in a country and the economic status of that country.

2. OBJECTIVE OF THE STUDY

The primary objective of this study is to investigate the relationship between the telecommunication sector and the
economic development of Bangladesh. Given the global importance of telecommunications in shaping economies, this
study seeks to identify the specific impacts that telecommunications have on Bangladesh's GDP growth, employment
rates, and other economic indicators over a span of 41 years. By analyzing this relationship through quantitative methods,
the study aims to provide insights that will aid policymakers, investors, and stakeholders in further understanding and
leveraging the telecommunication sector for economic growth.

Specific Objectives:

1. Evaluate the Contribution of Telecommunication to GDP Growth:

This study aims to measure how much telecommunication services, including mobile, internet, and telephony services,
have contributed to Bangladesh's GDP over time. The focus will be on understanding how factors such as teledensity,
internet penetration, and telecommunication revenue impact economic growth.
4|Page

2. Analyze the Impact of Telecommunication Investments:

The research will analyze the role of investments in the telecommunication sector on economic development. It will
focus on the extent to which increased investments in telecom infrastructure and services have positively impacted the
country’s GDP and overall economic health.

3. Examine the Role of Internet Penetration in Economic Development:

One of the specific objectives is to assess the impact of internet penetration on economic activities. This involves
determining the ways in which increased access to the internet influences businesses, banks, corporate offices, and other
vital sectors of the economy.

4. Determine the Impact on Employment:

The study will examine the role of the telecommunication sector in creating employment opportunities. By analyzing
how the growth of the telecom sector correlates with employment rates, the research will provide insights into its
contribution to job creation in Bangladesh.

5. Identify Key Telecommunication Indicators Affecting Economic Growth:

Through regression models, this study will identify the most significant variables within the telecommunication sector
(e.g., teledensity, revenue, investment) that have the strongest correlation with economic growth. This analysis will help
determine the most critical areas for future investment and policy focus.

6. Assess the Relationship Between Telecommunication Revenue and Economic Performance:

The study aims to evaluate how telecommunication revenues (as a percentage of GDP) contribute to economic
performance. This will involve assessing how reinvestments from telecom profits into the economy help accelerate
development.

7. Provide Recommendations for Future Growth in the Telecommunication Sector:

Based on the findings, the study will offer strategic recommendations for the further development of the
telecommunication sector in Bangladesh. These recommendations will be aimed at maximizing the positive economic
impact of telecommunications on the country.

This detailed analysis will assist in understanding the interconnectedness of telecommunications and economic progress,
and provide valuable data for formulating policies aimed at fostering growth in Bangladesh's telecommunication sector.

3. LITERATURE REVIEW
The role of telecommunication in the economic development attracted attention of many researchers for many years.
Hardly (1980), Lichtenberg (1995), Greenstein and Spillar (1996) and Norton (1992) all of them attempted to examine the
telecommunication impact over the economic development and all of them confirmed that there is strong positive
relationship exists between telecommunication and economic development of a country. By examining the period of 8
years of 24 countries Azim and Mahmood (2008) found that telecommunication development has a strong positive
influence towards the GDP. Kateja and Jha (2008) investigated that there is a casual relationship between the continuous
5|Page

development of telecommunication and economic growth of India. They claimed that telecommunication is
extraordinarily different from other infrastructure. As a result, it has positive and compulsory significant influence over
the economic development.
As an imperative element of telecommunication, teledensity and its impact over the economy was investigated by
conducting a comprehensive study in Iran based on the data from 1960s to 2012, Sadr et al., (2012) found that there is a
positive relationship between GDP and telephone density. Jhunjhunwala (2000) revealed that the teledensity in the
developing country is low because of the higher cost of providing telecommunication service. In the developed countries
more than 90 percent household can easily enjoy the telecommunication service because of their higher purchasing power.
Compared to that statistic in India, only 6 percent household has the capability to bear such a higher expenditure for the
telecommunication service. On the other hand, Jain and Sridhar (2003) argued that the higher cost of providing
telecommunication service to the general people can be significantly reduced in long term by using wireless technologies.
In another interesting study, Waverman and Fuss (2005) found that telecommunication have positively significant impact
on the growth of an economy. Based on this study another truth is also revealed that the impact of telecommunication on
the economic growth in the developing countries is two times larger than developed country. Ross (1999) proved that
privatization of telecommunication industry is significantly and positively related to the growth of teledensity which in
return has significant impact on the economic development through network expansion and the improvement of the
quality of network. Garreau (2008) proved that telecommunication reduces poverty as around the world. He also argued
that teledensity has achieved an impressive growth around the globe where number of activated mobile phone is more
than 3.3 billion while the total population of the earth is 6.6 billion. Patel et al., (2007) also proved that in China there is
rapid growth of mobile phone subscription. In 2003 it was 21 percent while in 2005 it was 38 percent and in 2006 it was
49 percent. The subscription numbers were increased to double percentage within three years.
In an empirical study Shiu and Lam (2007) found that there exists unidirectional causal relationship between
telecommunication investment and economic development in those countries which have a lower income level. This result
expresses that if the investment in the telecommunication investment is reduced then there is a small or no impact on the
growth of the economy. Opposed to the results of this study, based on the data of 45 countries Andrew Hardly (1980)
postulated that in the developing countries the impact of telecommunication investment is way more significant than the
most developed countries. Allenmen et al., (2002) also argued that telecommunication is accountable for the increasing
demand for the input used in the production which eventually also increases the total national output. Sey and Adugu
(2008) claimed that mobile phone is the prime form of communication in Ghana. They also argued that in the developing
countries investment in the mobile phone sectors has a political as well as economic benefit. This is because cities are
centre point for the commercial business, government activities, banks etc which required telecommunication services to
link with other parties and offices. Ajboye et al., (2007), Geiger and Mia (2009), World Bank (2007) found that it is the
mobile phone actually creates high paying jobs as well as socio economic development in the developed and developing
countries. Based on the research conducted by Horst and Miller (2009), Ito et al., (2005) in Israel they proved that the
investment in wireless telecommunication technology has a profound and positive relationship with the economic
development. Sulivan (2007), Kaul et al., (2008) and Knight and John (2008) postulated that in Bangladesh the initiation
of Grameen village handset (GSM Handset) provided the opportunity to utilize the GSM Handset by accessing by the
rural and local women entrepreneur. There is two-way benefit of this initiation as the women are empowered and
facilitated by the GSM Handset for being entrepreneur that results to make change in the socio-economic structure as well
as the profit which is generated by the use of mobile phone can be used in other economic activities.
Deloitte (2008) reported revenue of the telecommunication operators has the significant influence over the GDP. Based on
the taxation purpose Ovum (2006) also reported that mobile phone industry has contribution of 145 billion RS equivalent
to 3.6 billion dollars by providing the taxation revenue towards the government. Again, Deloitte also analyzed (based on
the six countries: Bangladesh, Pakistan, Malaysia, Thailand, Ukraine and Serbia) and reported that government can
captured the revenue directly from the mobile phone operations and services. As a result, mobile phone industry has the
contribution of 26% revenue of the collection of total taxes and it rises to 29% if the regulatory fess which is mandatory to
operate the business is included. Based on the study conducted in Egypt, Saudi Arabia and India Graber and Venkata
(2013) claimed revenue from telecommunication service is the part of two or three percent of total GDP in those
countries.
Bardan et al., (2007) argued that broadband internet is the key point of many crucial services as well as a prerequisite of
innovation and worldwide growth. As a result, accessing to the internet through broadband is the way to construct a
6|Page

knowledge-based economy. Czernich et al., (2009) observed that the continuous advancement of internet has significantly
positive relationship with the economic growth of all the OCED countries. Another interesting empirical study based on
the shadow economy with a panel data of 152 countries over 9 years from 1999 to 2007 conducted by Elgin (2013) and he
observed that there is relationship between internet usage and the size of a shadow economy which has influence over the
GDP per capita. Nande and Saayam (2005) argued that internet usage has a strong influence over the tourism business of
Africa. Weinhold (2004) found that internet is impelling the international trade of economy around the world.
Koutroumpis (2013), Holt and Jamison (2009) Cette et al., (2005) Kim and Oh (2004) and Klein (2003) all of these
scholar’s researchers argued that internet increase the number of outputs for the productivity which has a tremendous
effect on the growth of economy. Lechman and Marszk (2015) proved that internet tremendously enhance the investment
in the economy by promoting the exchange traded funds (EFT).
Katz and Koutroumpis (2012) observed that telecommunication is one of the most promising sectors for creating job
opportunities. Between 2011 and 2012, in Senegal and Mali telecommunication sectors created 8,100 direct jobs and
almost 152,000 indirect jobs. Osotimehin et al., (2007) and Stette (1999) explained that in the developed world most of
the advanced countries have deregulated the telecommunication sector which actually allows more investment in
telecommunication sector which in return enhance the advancement of telecommunication technology, growth in private
sector development as well as more employment opportunities. Moreover, form another study based on the Nigeria, Jenny
and Isac (2001) postulated that telecommunication is such a blessing which enable the day laborers to call to find job
opportunities rather than making a trip worth of USD 40. Moreover, Tella and Adesoye (2007) opined that in Nigeria the
mobile operators have tremendous significance in term of generating employment opportunities. The mobile
telecommunication industry so far created 10,000 job opportunities where people are directly employed as well as
1,000,000 job opportunities where people are indirectly employed. Again Soyinka (2008) and Ndukwe (2008) opined that
GSM business in Nigeria has a great contribution towards the economy in case of GSM card printing, distribution and
recharge. These activities save almost 150 million dollars per month as well as provide job opportunities. Klonner and
Nolen (2010) explained that the presence of mobile network has the ability to create new markets and services. For an
example in South Africa the presence of mobile (GSM) network decreases the unemployment rate significantly. Batziillis
et al., (2010) also explained that in Malawi because of the presence of mobile network the participation of female labor is
increased.
Ovum (2006) opined that in India telecommunication industry has created 3.6 million employments directly and indirectly
and it is estimated that the growth rate of employment opportunities will be increased by 30 percent per year. By
analyzing the data of 6 countries Deloitte (2008) reported that a mobile sector has greater contribution in case of
employment. In Pakistan it has so far created 244,000 jobs and in Serbia it has created 36,000 job opportunities. It also
reported that limited employment opportunities are created by the mobile phone operators for themselves but they
influence other sectors for jobs creations. Moreover, the jobs which are created in the mobile phone operators are highly
paid jobs. The mobile economy GSMA (2014) reported that in 2013 in the Sub-Saharan Africa mobile industry created
2.4 million employments. Most of these jobs include distribution of retails services, selling recharge card and handsets. It
proved that mobile network operation has a significant influence over the job’s creation. But it is also true that only
300,000 persons were directly employed by the mobile phone operators which are considered as high paying jobs. Again,
the mobile economy GSMA (2015) reported that in 2014 worldwide mobile operators created 12.8 million direct
employments. Moreover 11.8 million jobs can be defined as indirect jobs. The accumulation of the direct and indirect jobs
is 25 million in 2014. Boateng and Yellen (2010) opined that the diffusion of mobile phone has greater influence over the
job market with high paying and high-quality jobs both in cities and rural areas.
Greenstein and Spiller (1995) observed that investment in the telecommunication infrastructure has a significant positive
association with growth of employment rate in the United States. According to the Jamaican Ministry of Trade and
Industry (2004), investment in telecommunication industry can boost the economy than any other sector. In Jamaica, the
tourism sector which is considered as one of the largest business sectors, contribute only 6 percent to the GDP with
200,000 employments. Compared to the tourism industry, the telecommunication industry also contributes to the economy
by 6 percent with only 15,000 employments. Alleman et al., (2002) opined that investment in the telecommunication
sector has a positive impact on the economy. It reduces the cost of production which enhances revenue. As a result, it
eventually increases the employment rate of an economy. Ehsun (2011) observed that in Ghana investment in
telecommunication increases the teledensity by expanding network which is one of the major reasons behind millions of
new employments. In this way the productivity of Ghana increased but in other way the labor force is also becoming
7|Page

skilled. Aker and Mitbi (2010) claimed that in Kenya because of the investment in the mobile network the employment
rate is increased by 130 percent from 2003 to 2007. Klonner and Nolen (2008) assessed that the presence of the mobile
network is tremendously successful to create the formal or informal job opportunities in South Africa. The employment is
increased by 15 percentages which the larger percentage rely on women employment.
Ding and Haynes (2003) argued that in developing countries telecommunication is a technological blessing as the
telecommunication industry generates revenue by itself which enables the industry to create job opportunities. Zhara and
Mahmud (2014) postulated that it is obvious that a telecommunication sector has an impact on the direct employment. But
the larger effect relies on creating the indirect job opportunities with an establishment of call centers, customer cares,
retail shops etc.
By using data of various municipalities of Germany through a simple OLS regression Czernich (2014) investigated that
internet and unemployment has a negative relationship. Crandall et al., (2006) found that in USA employment of private
sector is strongly and positively associated with broadband internet. Thru (2005) also reported that if the broadband
penetration increased by 1 percent, employment rate also increased by 0.2 or 0.3 percent in per year. Because of the
broadband internet penetration, in nonfarm private sector there will be 300,000 new jobs created which also indicates the
broadband internet is more positively associated with private industry such as manufacturing, finance, education etc.
Moreover, Deloitte (2012) reported that growth of internet subscription is accountable for 190,000 people to be employed
in Australia. In another interesting study Mckinsey argued that internet is a powerful force that creates job opportunities.
Though it makes some jobs abortive but the net amount of employment opportunities is increased by the internet
subscriptions. Moreover, from a detail analysis conducted on the French economy Mckinsey opined that internet is
accountable for destroying almost 500,000 jobs in last 15 years but it also accountable for creating 1.2 million new jobs.
This result indicates internet generates 2.4 new jobs for each of jobs destroyed by internet subscription. Donner and
Marsden (2011) explained that with the rapidly increased internet subscriptions the digital literacy is also increased. As a
result, the high-quality jobs which are listed online can be accessed and applied through internet.
By considering the above all discussions, arguments and counterarguments, this paper is primarily focused on the
relationship between telecommunication and economic development. It should be noted that in various previous studies
there found positive relationship between telecommunication and economic development such as Sridhar and Sridhar
(2007) argued "Development of ICT including telecommunication sector and their derived services provide significant
benefits to the economy." As a result, this research fundamentally focuses on Bangladesh telecommunication sector as
prime subject to investigate and explore the relationship between telecommunication and economic development in the
light of previous research paper findings about the telecommunication role over the economic development.

4. METHODOLOGY
With purpose of determining the relationship between telecommunication and economic development of Bangladesh this
research paper intends to offer answering the following prime question.
1. Is there any significant relationship between telecommunication and economic development of Bangladesh?
Based on answering the prime research question and previously demonstrated discussions in the review of literature, the
developed central hypothesis is as:
H1: There is significant relationship between telecommunication and economic development.
Against the null hypothesis which is there is no relationship.
3.1 Identifying Variables:
3.1.1 Dependent Variables
GDP per capita: GDP per capita is the average income per person in a country. The formula is GDP per capita = Gross
domestic products / Total population.
Employment rate: Employment rate can be defined as percentage of the labor force which is employed. It is one of the
most vital economic indicators which is implemented to understand the state of the economy. Broadly speaking, the
employment rate is a macroeconomic variable that indicates the labor force which is currently employed to the total
8|Page

working age population of specific region or country. In is calculated as Employment rate = (Labor force currently
employed / Total population) * 100.
3.1.2 Independent Variables
Teledensity: It is the total number of telephone line which includes both fixed telephone line (PSTN) and wireless mobile
in a region compared to the number of whole populations in that same region.
Investment in telecommunication: The amount of money which is invested for the for both of the fixed telephone line
and wireless mobile phone by the government and private sectors for infrastructural development and operations.
Revenue from telecommunication: The amount of revenues which is earned from the provision of telecommunication
services by considering both the governmental and private telecommunication institutions.
Revenue percentage of GDP: It is the percentage contribution by the telecommunication industry through their revenue
in the whole Gross domestic products.
Internet users: The total number of internet subscriptions or connections in a region compared to the number of
inhabitants of the same region.
Through the identification of multiple simpler variables of telecommunication and economic development leads us to
answer individual research questions:
1. Is there any significant relationship between teledensity and GDP per capita?
2. Is there any significant relationship between investment in telecommunication and GDP per capita?
3. Is there any significant relationship between telecommunication revenue and GDP per capita?
4. Is there any significant relationship between internet users and GDP per capita?
5. Is there any significant relationship between telecommunication revenue percentage of GDP and GDP per capita?
6. Is there any significant relationship between teledensity and employment rate?
7. Is there any significant relationship between investment in telecommunication and employment rate?
8. Is there any significant relationship between telecommunication revenue and employment rate?
9. Is there any significant relationship between internet users and employment rate?
10. Is there any significant relationship between telecommunication revenue percentage of GDP and employment rate?
These individual research questions lead us to individual test of following sub-hypotheses:
H1A: There is significant relationship between teledensity and GDP per capita.
H1B: There is significant relationship between investment in telecommunication and GDP per capita.
H1C: There is significant relationship between telecommunication revenue and GDP per capita.
H1D: There is significant relationship between internet users and GDP per capita.
H1E: There is significant relationship between telecommunication revenue percentage of GDP and GDP per capita.
H1F: There is significant relationship between teledensity and employment rate.
H1G: There is significant relationship between investment in telecommunication and employment rate.
H1H: There is significant relationship between telecommunication revenue and employment rate.
H1I: There is significant relationship between internet users and employment rate.
H1J: There is significant relationship between telecommunication revenue percentage of GDP and employment rate.
Table I. Variables with respective symbols and sources
Variables Symbol Source
9|Page

GDP per capita GPC Kanwal (2008), Lei and Kingsley (2006)
Employment rate EMP Tella et al., (2012), Stette (2009)
Teledensity TEL Kawajeet and Neena (2007), Adegbemi et al.,
(2012)
Telecommunication investment TEI Oladipo (2013), Hendrick and Leonard (1996)
Telecommunication revenue TER Farncis et al (2012), Rahul and Xue (2012)
Internet users INU Joseph (2011), Donner and Marsden 2011
Telecommunication revenue percentage of GDP TRG Sheriffdeen (2012)
3.2 Model:
GDP per capita (GPC) and Employment rate (EMP) both of these two dependent variables are implemented as the
multiple simpler variables of economic development dependent construct. Teledensity (TEL), telecommunication
investment (TEI), telecommunication revenue (TER), Internet users (INU), Contribution of telecommunication revenue
percentage of GDP (TRG) all of these independent variables are implemented as the multiple simpler variables of role of
telecommunication construct. These independent variables are implemented with an intention to determine the economic
development. Based on the two dependent variables GDP per capita (GPC) and employment rate (EMP), the OLS
regression models are illustrated below:

GPCit = α0 + α1TELit + α2 TEIit + α3TERit + α4INUit + α5TRGit + εi

EMPit = α0 + α1TELit + α2 TEIit + α3TERit + α4INUit + α5TRGit + εi

3.3 Data and Sample:

For this study the considered secondary data which are derived from various economic data storage website, mobile
operators’ annual reports, annual report of Bangladesh telecommunication regulatory commission (BTRC); a central
authority of telecommunication in Bangladesh. Here 41 years telecommunication and economic data with a time series of
1975-2015 for each of the variables are collected with convenience sampling method. E-views 8.0 statistical software is
implemented for regression analysis with an assumption that is all the variables are linearly related.
3.3.1 Scope of the Study

• This research paper does not consider any data for any variables before 1975 to maintain equal observations and
ensure the accuracy and reliability of data for each variable.

• This study only considers a few factors (GDP per capita, teledensity, telecommunicating investment,
telecommunication revenue etc) which is a limitation in term of scope of the study.

5. FINDINGS AND ANALYSIS

4.1 Regression Analysis:
Based on the established two regression models dependent variables GDP per capita (GPC) and employment rate (EMP)
are regressed through the independent variables teledensity (TEL), telecommunication investment (TEI),
telecommunication revenue (TER), internet user (INU), telecommunication revenue percentage of GDP (TRG). Table 2
represents the results of regression models.
Table II. Regression analysis of selected telecommunication's determinants on dependent variables GDP per capita
(GPC) in model 1 and employment rate (EMP) in model 2.
Independent Variables Model 1 Model 2
Constant (C) 204.9896 73.96721
(0.0000)* (0.0000)*
Teledensity (TEL) 2.32E-06 3.99E-08
(0.0762)* (0.0928)*
Telecommunication investment (TEI) -6.19E-10 1.06E-11
10 | P a g e

(0.5599)* (0.5845)*
Telecommunication revenue (TER) 1.03E-10 -7.95E-12
(0.9160)* (0.6550)*
Internet user (INU) 1.45E-05 -3.64E-08
(0.0004)* (0.5939)*
Telecommunication revenue percentage of GDP (TRG) 5.93995 -4.203172
(0.0001)* (0.0000)*
F-Statistic 198.0290 48.65872

P-Value 0.0000 0.0000

2
R 96.5858% 87.4234%
Adjusted R2 96.0981% 85.6267%
The P-Value is parentheses with * denoting significance level 20% Based on the first model the results show us that
teledensity is significantly and positively related with GDP per capita. This is consistent with prior results where
teledensity has significant relationship with GDP per capita (Lei and Kingsley 2006). This result also indicates the growth
of the teledensity intensifies GDP per capita of an economy. Internet user is also significantly and positively related to
GDP per capita which also supports the previous research results (Joseph, 2011). Evidently this is an indication of
increasing in the number of internet user enhances overall GDP per capita. Moreover, contribution of telecommunication
revenue percentage of GDP has significant positive relationship with GDP per capita. This result also support the prior
research results (Adegbemi, 2012). The indication of this result is, contribution of the revenue percentage from the
telecommunication towards the GDP has positive significant role in order to amplifying GDP per capita. Based on the
value of R2 and Adjusted R2 96.5858% and 96.0981% respectively postulate that 96.5858%, variation of GDP per capita
can be explained by the independent variables of this model.
In the second regression model teledensity has significant positive relationship with employment rate. It indicates the
more the teledensity increases in Bangladesh the more the employment rate will increase and it is evidently true based on
the regression results. Moreover, this regression result is also consistent with previous research results where significant
positive relationship between teledensity and employment rate was found (Jenny and Isac 2001). The relationship between
telecommunication revenue percentage of GDP and employment rate is also significant but negative. Based on the value
of R2 and Adjusted R2 87.4234%, 85.6267% respectively postulate that 87.4234%, variation of employment rate can be
reasonably explained by the independent variables of this model.

6. RECOMMENDATIONS

1. Enhancing Tendency in Telecommunication:

Since teledensity has a significant positive relationship with GDP per capita, the government and telecom companies
should work together to increase teledensity, particularly in rural and underdeveloped regions. This can be done through
investments in infrastructure and making telecommunication services more affordable and accessible.

2. Boosting Telecommunication Investments:

While the impact of telecommunication investment is less significant than other variables, increasing targeted
investments in advanced technology (e.g., 5G, fiber optics) may yield better long-term economic growth. Strategic
investments should focus on infrastructure that supports both urban and rural connectivity.

3. Revenue Reinvestment:
11 | P a g e

Since telecommunication revenue percentage of GDP has a significant positive impact on GDP growth, it's essential that
a portion of these revenues be reinvested into further developing the telecom sector. This reinvestment should focus on
upgrading existing infrastructure, improving service quality, and expanding services to unserved areas.

4. Increase Internet User Base:

The findings suggest that the increase in internet users is positively related to GDP per capita. To capitalize on this,
initiatives aimed at increasing internet penetration rates should be pursued, such as reducing the cost of internet access
and providing digital literacy programs, especially in rural and less developed areas.

5. Policy Support for Innovation:

Government policies should encourage innovation and competition within the telecom sector to foster growth. Offering
incentives for telecom companies to invest in emerging technologies and services could further enhance their contribution
to GDP and employment growth.

6. Encouraging Public-Private Partnerships:

To further boost telecommunication investments, a public-private partnership model could be adopted. Such
collaborations can help attract foreign direct investment (FDI) and foster innovation in the telecom sector, driving both
GDP growth and employment opportunities.

7. Employment-Focused Development:
As the employment rate has a positive correlation with telecommunication variables, targeted programs that link the
growth of telecom infrastructure with job creation initiatives (e.g., training programs for telecom-related jobs) should be
promoted.

These recommendations align with the key findings of the study, which show that strategic investments and policies in the
telecommunication sector can play a significant role in amplifying GDP growth and improving employment rates.

7. CONCLUSION
On the basis of the regression analysis, it can be evidently postulated that the role of telecommunication has significant
influence in order to economic development of Bangladesh to some extent. The results might have varied based on
different variables' regression model. As GDP per capita is a prime indicator of economic development and implemented
extensively as well as acknowledged in many previous research, this dependent simpler variable is considered in this
paper and the results of this paper based on GDP per capita has supportive attitude towards the prior research results
where telecommunication has positive and significant association with GDP per capita in term of the economic
development of developing countries. Argument can be predominated based on the results of the second regression model
where revenue percentage of GDP and employment rate relationship is significantly negative. This result might shade the
light of previous research where significant positive relationship was found (Zhara and Mahmud 2014). But above all it is
evident based on prior results of other research where telecommunication role more signifies in term of economic
development of developing country. However, as Bangladesh is a developing country of third world it is hoped that the
telecommunication role will show adhesion in economic development and the impact will be more intensified than
developed country which will in return minimize the technological and economical gap between Bangladesh and other
developed countries in this era of globalization.

REFERENCES
12 | P a g e

[1] S. Yilmaz and M. Dinc, "Telecommunications and regional development: Evidence from the U.S. States," Economic
Development Quarterly, vol. 16, no. 3, pp. 211–228, Aug. 2002.

[2] E. H. Wang, "ICT and economic development in Taiwan: Analysis of the evidence," Telecommunications Policy,
vol. 23, no. 3-4, pp. 235–243, Apr. 1999.

[3] I. Vogelsang, "The relationship between mobile and fixed-line communications: A survey," Information Economics
and Policy, vol. 22, no. 1, pp. 4–17, Mar. 2010.

[4] L.-H. Röller and L. Waverman, "Telecommunications infrastructure and economic development: A simultaneous
approach," American Economic Review, vol. 91, no. 4, pp. 909–923, Sep. 2001.

[5] P. Gao and A. Rafiq, "The transformation of the mobile telecommunications industry in Pakistan: A developing
country perspective," Telecommunications Policy, vol. 33, no. 5-6, pp. 309–323, Jun. 2009.

[6] P. Curwen and J. Whalley, "The restructuring of African mobile telecommunications provision and the prospects for
economic development," info, vol. 13, no. 2, pp. 53–71, Mar. 2011.

[7] S. W. Norton, "Transaction costs, telecommunications, and the microeconomics of macroeconomic growth,"
Economic Development and Cultural Change, vol. 41, no. 1, pp. 175–196, Oct. 1992.

[8] G. Madden and S. J. Savage, "CEE telecommunications investment and economic growth," Information Economics
and Policy, vol. 10, no. 2, pp. 173–195, Jun. 1998.
[9] M. Mueller, "China’s telecommunications market: Entering a new competitive age Ding Lu Chee Kong Wong," The
China Journal, vol. 53, pp. 173–173, Jan. 2005.

[10] L. Correa, "The economic impact of telecommunications diffusion on UK productivity growth," SSRN Electronic
Journal.

[11] P. Koutroumpis, "The economic impact of broadband on growth: A simultaneous approach," Telecommunications
Policy, vol. 33, no. 9, pp. 471–485, Oct. 2009.

[12] A. P. Hardy, "The role of the telephone in economic development," Telecommunications Policy, vol. 4, no. 4, pp.
278–286, Dec. 1980.
[13] H. Gruber and F. Verboven, "The evolution of markets under entry and standards regulation — the case of global
mobile telecommunications," International Journal of Industrial Organization, vol. 19, no. 7, pp. 1189–1212, Jul.
2001.

[14] S. M. GREENSTEIN and P. T. SPILLER, "Modern telecommunications infrastructure and economic activity: An
empirical investigation," Industrial and Corporate Change, vol. 4, no. 4, pp. 647–665, 1995.

[15] C. L. Freund and D. Weinhold, "On the effect of the Internet on international trade," SSRN Electronic Journal.

[16] F. Atsu, C. Agyei, W. Phanuel Darbi, and S. Adjei-Mensah, "The impact of telecommunication revenue on
economic growth: Evidence from Ghana," African Journal of Economic and Management Studies, vol. 5, no. 2, pp.
195–208, Jul. 2014.

[17] S. Démurger, "Infrastructure development and economic growth: An explanation for regional disparities in china?,"
Journal of Comparative Economics, vol. 29, no. 1, pp. 95–117, Mar. 2001.

[18] C. Choi and M. Hoon Yi, "The effect of the Internet on economic growth: Evidence from cross-country panel data,"
Economics Letters, vol. 105, no. 1, pp. 39–41, Oct. 2009.

[19] C. Choi, "The effect of the Internet on service trade," Economics Letters, vol. 109, no. 2, pp. 102–104, Nov. 2010.
13 | P a g e

[20] H. Chen and E. C. Y. Kuo, "Telecommunications and economic development in Singapore," Telecommunications
Policy, vol. 9, no. 3, pp. 240–244, Sep. 1985.

[21] R. O. Beil, G. S. Ford, and J. D. Jackson, "On the relationship between telecommunications investment and
economic growth in the United States," SSRN Electronic Journal.

[22] R. J. Barro, "Economic growth in a cross section of countries," The Quarterly Journal of Economics, vol. 106, no. 2,
p. 407, May 1991.

[23] P. D. ALLISON, "Using panel data to estimate the effects of events," Sociological Methods & Research, vol. 23, no.
2, pp. 174–199, Nov. 1994.

[24] J. C. Aker, "Does digital divide or provide? The impact of cell phones on grain markets in niger," SSRN Electronic
Journal.

[25] K. Kpodar and M. Andrianaivo, "ICT, financial inclusion, and growth evidence from African countries," IMF
Working Papers, vol. 11, no. 73, p. 1, 2011.