Learning from the Telecom revolution in India

Posted on March 10, 2009

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Contemporary commentaries highlight the success India’s policy makers have had in making available to her citizens affordable and quality access to telecom services. I have often wondered if there are lessons that we could learn from this success and apply them to the problem of universal health care.

The table below captures the industry’s growth since 1994 when India announced a new telecom policy in a bid to de regulate its market. The table puts the success in the telecom sector in perspective:

 

1947

1994

2007

Teledensity                                # telephones/100 citizens

0.02

1.39

23.9

Population (approx.)

350 million

900 million

1100 million

# telephones

82,000

12.5 million

263 million

CAGR

 

11.3%

26.41%

In 13 years since the new policy was implemented, India added 20 times of the number of lines she had added in the preceding 47 years. More importantly, this growth saw the emergence of strong local service providers that have shown remarkable capability to absorb latest technology and also offer services at possibly the lowest rates anywhere in the world.  Additionally every year the government of India makes a tidy sum collecting fees for licenses it sold to these service providers.

In an earlier entry, I had written about the significant investment India would have to make to augment the healthcare infrastructure, specifically the number of hospital beds, so that the goal of universal healthcare maybe realistically achieved. The success of the telecom policy leads me to believe that it may indeed be possible to formulate a policy paradigm where all three participants viz., citizens, service providers and the government can achieve their respective goals without compromising on quality, equity, affordability and profitability.

Two key factors, often cited by researchers, contributing to the success of the telecom policy are

  1. the establishment of a non partisan and empowered authority that not only regulates but also lays out standards of performance, and
  2. a well articulated and independent dispute resolution mechanism.

I would therefore suggest that the establishment of an independent and empowered health regulatory board would be a necessary ingredient of India’s strategy to deliver universal healthcare.

The telecom policy divides India into 22 telecom circles for the purpose of issuing licenses. In making the choice of areas that form these 22 circles, the telecom policy uses parameters such as geographic contiguity, population size, availability of existing infrastructure, ability to pay, etc. I am fascinated by the idea of using these 22 circles as possible risk pools when designing and implementing a universal healthcare system. In a separate entry I will look at whether this is indeed a feasible idea.

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