Abstract
The aim of this paper is to analyse the effect of the mobile phone penetration rate on inequality in Western Balkan countries and to provide empirical evidence. We explore the question of whether cell phone diffusion helps to decrease inequality and whether it has a positive income equality effect. In the developed conceptual framework, we consider that people with access to mobile telephony also have access to Wi-Fi and GPS and that individuals can perform different activities, such as engaging in e-commerce, e-governance, health, and education; paying bills; saving money; and transferring money to other persons. This represents a good foundation for poor persons exit the cycle of deprivation and leads to the development of equal opportunities. We analyse the impact of mobile phone penetration on inequality in Western Balkan countries by using ordinary least squares and two-stage least squares models (Asongu, 2015). Our results confirm the income-redistributive effect of mobile phone penetration.