Often derived demand for telecommunications services is analyzed by means of highly aggregated frameworks. Such frameworks have sharp limitations in their capacity to provide useful information about interrelated factor demands and, in particular, the interrelationships between telecommunications and other factor inputs. Without such information it is impossible to address comprehensively issues of concern to policy makers regarding the relationship between telecommunications infrastructure and economic development, In this paper, a model involving a comprehensive set of sectoral translog cost equations has been applied to study various hypotheses concerning interrelationships between the derived demand for telecommunications and the demand for other factor inputs, Specifically, the empirical findings suggest that the nominal sectoral telecommunications cost shares are not positively related to the level of wages. This finding is opposite to a recent finding reported for the Italian economy. The results also suggest that increases in the price of labor tend to drive down the nominal cost shares of telecommunications. Finally, the study indicates that increases in the price of capital will tend to increase nominal sectoral telecommunications cost shares because of the existence of strong substitution possibilities. These findings have important implications for the role of telecommunications infrastructure in economic development.