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The term Digital Divide usually refers to the overall gap in information technology and communication usage between developed and developing countries (Lu, 2002). Currently there are huge differences in the ability of people around the world to communicate both locally and globally. The International Telecommunications Union (ITU) provides free statistics, available on their Web site, on IT usage rates in five broad regions of the world. These regions are: Africa, Americas (including North, Central and South), Asia, Europe, and Oceania. Total telephone subscribers per 100 inhabitants in 2002 ranged from a low of 6.60 in Africa to a high of 89.83 in Europe (Table 1). The number for the Americas (64.92), represents the average of high wire-line usage in North America and low wireline usage in South America. For example, Canada and the United States have 101.26 and 114.70 total telephone subscribers per 100 inhabitants while Peru and Venezuela have 13.67 and 36.78 total telephone subscribers per 100 inhabitants. Statistics on cellular subscribers in 2002 show a great deal of variation. Africa had the lowest number (4.19) of cellular subscribers per 100 inhabitants while Europe had the highest (50.21) number of cellular subscribers per 100 inhabitants. Similarly, 2002 statistics on Internet usage also reveals vast differences between regions of the world. Africa only had 99.62 users per 10,000 inhabitants while Oceania had 3,330.47 users per 10,000 inhabitants. The high number of Internet users for Oceania is heavily influenced by the widespread usage of
the Internet in Australia and New Zealand. The Americas also have a high number of Internet users and this number is heavily influenced by the large number of Internet users in Bermuda, Canada and the United States. Collectively, the statistics reported in Table 1 indicate that IT communication tends to be the highest in the prosperous regions of the world.

Access to affordable technology to improve the flow of information is crucial to the development of an economy. Currently four-fifths of the world’s cellular subscribers live in developed economies. The prospects for growth in cellular phone subscribers is largest in the developing countries. For many large developing countries, like Russia, it can take up to ten years to get a fixed line telephone (Economist, 1999). The problem, of course, is that it doesn’t make economic sense to install wire-line services in regions of
the world where there are very few people. Cellular phone services provide an affordable alternative to expensive wire-line telephone because cellular phone companies only need to install transmission towers to send and receive signals and do not have to dig holes in the ground. It is much cheaper and easier to install transmission towers. With lower costs, cellular phone companies can break even with a small number of subscribers and also more easily tailor cellular phone packages to regional tastes. Cellular phone companies also bring much needed competition and foreign investment to the telecommunications industry in many parts of the world.

Taken From : Digital Economy – Impacts, Influences and Challenges