As discussed in Chapter 1 of this module, countries develop universal access and service (UAS) policies based on the premise that providing access to basic and advanced telecommunications and ICT services have a wide-ranging socio-economic rationale.
There are general studies and analyses, sometimes conducted by academics, that address broader questions of economic impact of communications, ICT and broadband Internet. Their understanding and latest knowledge is an important background for UAS policymakers and UAS program planners, as these studies provide the general rationale and justification.
Section 6.3.1 outlines the impacts of communications and Section 6.3.2 discusses the status of research for broadband Internet and ICT.
In the case of telecommunications projects, it can often be demonstrated that there is significant benefit in the form of ‘consumer surpluses’, over and above the price paid for the service. These include items such as the following:
- Businesses (small or large) often report that the money they save due to greater efficiency and saved personal travel time related to stock control, delivery co-ordination, following up sales opportunities, maintenance calls, etc. amount to several times the cost of the telephone rental and calls they make.
- Farmers and micro-business proprieters often report that the phone enables them to gain timely and geographically-specific information on urban market prices that increase their bargaining power with ‘middlemen’ and enable them to earn more for their product or secure a better price for their inputs.
- A third of personal calls typically represent personal or family emergencies that would again require travel or other costs if the call was not made. Sometimes people report their benefit in terms of lower health risk, a life saved, better family relationships, more opportunities.
- Institutions and government agencies – schools, clinics, local administrations, NGOs and other development agencies - similarly report increased efficiencies and the ability to deliver services in a more timely, effective and less wasteful manner through use of the telephone.
The benefits of broadband Internet and ICT are less direct and more difficult to quantify, though, there is general consensus that critical macro-economic value is gained from the provision of broadband access to ICT services. Research and analysis on measuring broadband impact are only beginning.
What is clear is that the impact of broadband is highly dependent on framework conditions within the country and also within the sector which is to benefit from broadband access. An example to illustrate this is the following: a health project plans broadband connections to be provided to rural district hospitals to facilitate remote diagnosis, consultation, transmission of imagery and data, and video-conferencing between the rural hospital staff and specialist doctors in the urban hospitals. In order for the health sector to reap the benefits, certain conditions need to be in place, such as:
- Trained staff at rural hospital to operate and maintain necessary ICT facilities and equipment;
- Increased staff at the urban consultation hospitals to be able to accommodate increased demands through rural hospitals;
- Privacy regulation on patients records which are electronically submitted; and
- Cost accounting and financial incentives for urban hospitals to provide remote consultation to rural hospitals.
Successful case examples of how broadband and ICT is addressing crucial development issues need to be studied in terms of there required pre-conditions to be transferable to other countries. Another important aspect is their sustainability. Piloting broadband networks and ICT projects maybe a helpful tool to adapt and refine the models to be used for a particular country and assess the required inputs, outputs, outcomes and project efficiencies.
While the economic impact provides the broad rationale for UAS programmes and projects, nowadays UAS programme development typically requires less extensive detailed economic analysis, as it is more widely accepted that ICT are crucial for socio-economic development. In UAS programme development it is about making choices and decisions on how to prioritize UAS projects among available options. Section 6.4 presents practical approaches, considerations and methods that are used to help to prioritize UAS projects, some based on financial analysis and others considering benefits.