History of Telecom Industry

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History of the Telecom Industry

• 1851First operational land lines were laid by the government near Calcutta (seat of British power) • 1881Telephone service introduced in India
• 1883Merger with the postal system
• 1923Formation of Indian Radio Telegraph Company (IRT) • 1932Merger of ETC and IRT into the Indian Radio and Cable Communication Company (IRCC) • 1947Nationalization of all foreign telecommunication companies to form the Posts, Telephone and Telegraph (PTT), a monopoly run by the government's Ministry of Communications • 1985Department of Telecommunications (DOT) established, an exclusive provider of domestic and long-distance service that would be its own regulator (separate from the postal system) • 1986Conversion of DOT into two wholly government-owned companies: the Videsh Sanchar Nigam Limited (VSNL) for international telecommunications and Mahanagar Telephone Nigam Limited (MTNL) for service in metropolitan areas.1997Telecom Regulatory Authority of India created. • 1999Cellular Services are launched in India, New National Telecom Policy is adopted. • 2000DoT becomes a corporation, BSNL


• Slow pace of the reform process .

• It would be difficult to make in-roads into the semi-rural and rural areas because of the lack of infrastructure. The service providers have to incur a huge initial fixed cost to make inroads into this market. Achieving break-even under these circumstances may prove to be difficult.

• The sector requires players with huge financial resources due to the above mentioned constraint. Upfront entry fees and bank guarantees represent a sizeable share of initial investments. While the criteria are important, it tends to support the existing big and older players. Financing these requirements require a little more liberal approach from the policy side.

• Problem of...
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