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Telecom Industry in India:
The telecom industry is one of the fastest growing industries inIndia. India has nearly 200 million telephone lines making it thethird largest network in the world after China and USA. With agrowth rate of 45%, Indian telecom industry has the highestgrowth rate in the world.Much of the growth in Asia Pacific Wireless TelecommunicationMarket is spurred by the growth in demand in countries like Indiaand China. India‘s mobile phone subscriber base is growing at arate of 82.2%.China is the biggest market in Asia Pacific with a subscriber baseof 48% of the total subscribers in Asia Pacific. Compared to thatIndia’s share in Asia Pacific Mobile Phone market is 6.4%.Considering the fact that India and China has almost comparable populations, India’s low mobile penetration offers huge scope for growth.
History of Indian Telecommunications:
Started in 1851 when the first operational land lines were laid bythe government near Calcutta (seat of British power). Telephoneservices were introduced in India in 1881. In 1883 telephoneservices were merged with the postal system. Indian RadioTelegraph Company (IRT) was formed in 1923.After independence in 1947, all the foreign telecommunicationcompanies were nationalized to form the Posts, Telephone andTelegraph (PTT), a monopoly run by the government's Ministryof Communications. Telecom sector was considered as a strategicservice and the government considered it best to bring under state's control.The first wind of reforms in telecommunications sector began toflow in 1980s when the private sector was allowed intelecommunications equipment manufacturing. In 1985,Department of Telecommunications (DOT) was established. Itwas an exclusive provider of domestic and long-distance servicethat would be its own regulator (separate from the postal system).In 1986, two wholly government-owned companies were created: TOLANI INSTITUTE OF MANAGEMENT STUDIESPage
the Videsh Sanchar Nigam Limited (VSNL) for internationaltelecommunications and Mahanagar Telephone Nigam Limited(MTNL) for service in metropolitan areas. In 1990s,telecommunications sector benefited from the general opening upof the economy. Also, examples of telecom revolution in manyother countries, which resulted in better quality of service andlower tariffs, led Indian policy makers to initiate a change processfinally resulting in opening up of telecom services sector for the private sector. National Telecom Policy (NTP) 1994 was the first attempt to givea comprehensive roadmap for the Indian telecommunicationssector. In 1997, Telecom Regulatory Authority of India (TRAI)was created. TRAI was formed to act as a regulator to facilitatethe growth of the telecom sector. New National Telecom Policywas adopted in 1999 and cellular services were also launched inthe same year.Telecommunication sector in India can be divided into twosegments: Fixed Service Provider (FSPs), and Cellular Services.Fixed line services consist of basic services, national or domesticlong distance and international long distance services. The stateoperators (BSNL and MTNL), account for almost 90 per cent of revenues from basic services. Private sector services are presentlyavailable in selective urban areas, and collectively account for less than 5 per cent of subscriptions. However, private servicesfocus on the business/corporate sector, and offer reliable, high-end services, such as leased lines, ISDN, closed user group...