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notjustinfo.com |
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Knowledge centre for MBA students. |
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An Overview of Indian Telecom Sector Senthuran In an economic policy framework where the role
of markets and incentives based on the price system is emphasized, infrastructural
goods and services, such as telecommunications are generally characterized by
high fixed investments, long gestation lags and relatively low profits,
especially during the initial phases of operation. For a long period, almost
all the infrastructural projects in India were Governments responsibility. However, as India moved along the path of
economic development, the process of liberalization began and private sectors
supportive role was recognized. Telecom sector was opened up for private
sector participation into basic services and value added services with the
policy announcement in May 1994. In order to meet the rising demand in the
telecom sector, Indian Government decided to invite private players to
supplant the government supported agencies in rendering basic as well as
value added telecom services. Though opened up, barring a few areas like
pagers and mobile phones, Indian telecommunication sector is dominated by
Department of Telecom (DOT) and two government companies - VSNL and MTNL. Telecommunication sector in India is
characterized by a fundamental failure on the following accounts: v
The number of per
capita telephone connections in India is around one-sixth of that found in
countries with a comparable per capita GDP. The ratio is even more adverse,
in the area of data communication. (In India there are only 13 connections
per 1000 persons; India has 10 million telephones with a density of one per
100, where the global standard is 10 per 100.) v
In India, the current
players are not able to meet the demand. The registered demand during 1996-97
was 17430 thousand connections out of which the unmet demand (waiting list)
was around 2887 thousand lines. v
Telecom facilities in
India are noisy and unreliable as compared with what is easily attainable
using contemporary technology. v
In India, telecom
facilities are often hundreds of percent costlier than the fair price of
these services. v
The usage of modern
telecom technology is a vital factor for the rapid growth of Indian economy,
since: v
The application of
modern telecom coupled with computer technology has the potential of yielding
order of magnitude gains in productivity in a large variety of industries. v
Modern telecom and
computer networks allow India gain access to ideas from all over the world. v
Telecom is special,
because, as an alternative, it is substantially cheaper as compared with
roads or railways. v
Improving the telecom
infrastructure will help to boost trading activities of India. v
Superior telecom
facilities are a must for India today, because many Indian states are
focusing on information technology for export earnings. Only a proper telecom
facility can assure the industry players a swift data transfer mechanism,
which will help them to compete with the global players in the information
technology field. v
Telecom sector in |
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