Willingness to pay for rural telephone services: Implications for rural poverty reduction in Southeast Nigeria

Abstract

This study examined the determinants of the rural people’s willingness to pay (WTP) for rural telephone services and the implications on poverty reduction in Southeast Nigeria. The key research problem was the inability of the telephone providers or regulatory agencies to estimate the amount the people were willing to pay for telephone services. The sample was made up of 240 agro-based entrepreneurs. Primary data were collected using structured interview schedules and well-structured questionnaires. The data were analyzed using both descriptive (means, percentages, cross-tabulations) and econometric tool – logit analysis. Result showed that 61.1% of the respondents were males and had higher WTP than females. Majority of the respondents were within the age bracket of 31 – 40 years. Only about 17.7% of them had access to telephone services. Majority of the respondents, 51.5%, were willing to pay N11 - N20 per minute of telephone services. Rural poverty was indicated as reduced through provision of employment opportunities for the jobless youth through the sale of telephone accessories and public call centres. The null hypothesis was tested using t-statistic which revealed that years of schooling and access to telephone services significantly influenced WTP at 1% level. It was recommended that government agencies/private telecom providers should extend telephone services to rural areas because of the rural people’s high WTP.