History of the Telecom Industry
First operational land lines were laid by the government near
Calcutta (seat of British power) • 1881
Telephone service introduced in India
Merger with the postal system
Formation of Indian Radio Telegraph Company (IRT) • 1932
Merger of ETC and IRT into the Indian Radio and Cable
Communication Company (IRCC) • 1947
Nationalization of all foreign telecommunication companies to
form the Posts, Telephone and Telegraph (PTT), a monopoly
run by the government's Ministry of Communications • 1985
Department of Telecommunications (DOT) established, an
exclusive provider of domestic and long-distance service that
would be its own regulator (separate from the postal system) • 1986
Conversion 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. • 1999
Cellular Services are launched in India, New National
Telecom Policy is adopted. • 2000
DoT 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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