Today's Time of Telecom


By

Mrs. Abhinanda Gautam
Faculty Marketing/HR
ICFAI National College
Kota
 


Process of change is often volatile and responsive to intervention and global circumstances impacting it. In such an inherently dynamic situation it is convenient to assume that cross-country experiences incubate the most recent seeds of change. This is because countries at various stages of development encapsulate developmental experiences that occur with the passage of time.

India, like many other countries of the world, have adopted a gradual approach to telecom sector reform through selective privatization and managed competition in different segments of the telecom market. To begin with, India introduced private competition in value-added services in 1992 followed by opening up of cellular and basic services for local area to private competition. The Telecom Regulatory Authority of India (TRAI) was constituted in 1997 as an independent regulator in this sector.

Understanding telecom growth prospect would require understanding of the sources of growth --- what accounts for cross-country differences in development experiences. Countries do differ among themselves in respect of their economic structure, sectoral policies and technological changes.

Telecom reforms' are a relatively new phenomenon and have been among the most visible face of economic reforms around the globe. The introduction of privatization and competition in this sector has brought about substantial changes in output, employment and labor productivity.

Telecom reforms' across the world are energizing businesses and people. Long considered a natural monopoly, recent technological developments have facilitated competition in this sector leading to increased access to telecom services and gains in efficiency and quality of service. India has emerged as an international destination for processing and distribution of information. Availability of infrastructure for electronically transferring and assessing information are critical to maintaining the competitive advantage that it currently enjoys and embracing telecom reforms is a part of achieving that goal. Though the results of telecom reforms the world over have been positive on average; domestic political economy and institutions have impacted every country experience and India is no exception.

Service Quality - One of the main reasons for encouraging private participation in the provision of infrastructure rests on its ability to provide superior quality of service. In India, as in many developing countries, low teledensity resulted in great emphasis being laid on rapid expansion often at the cost of quality of service. One of the benefits expected from the private sector's entry into telecom is an improvement in the quality of service to international standards. Armed with financial and technical resources, and greater incentive to make profits, private operators are expected to provide consumers value for their money.

The industry is considered as having the highest potential for investment in India. The growth in demand for telecom services in India is not limited to basic telephone services. India has witnessed rapid growth in cellular, radio paging, value-added services, internet and Global Mobile Communication by Satellite (GMPCS) services. This is expected to soar in the next few years.

The Government of India (Government) recognises that provision of world class telecommunications infrastructure and information is the key to rapid economic and social development of the country. It is critical not only for the development of the Information Technology industry, but also has widespread ramifications on the entire economy of the country. It is also anticipated that going forward, a major part of the GDP of the country would be contributed by this sector. Accordingly, it is of vital importance to the country that there be a comprehensive and forward looking telecommunications policy which creates an enabling framework for development of this industry. Recognizing that the telecom sector is one of the prime movers of the economy, the Government's regulatory and policy initiatives have also been directed towards establishing a world class telecommunications infrastructure in India. The telecom sector in India therefore offers an ideal environment for investment.

Reference:

  • Singh, HV, A. Soni, and R. Kathuria, "Telecom policy reform in India" Mimeo, The World Bank
  • www.tidco.com/tidcodocs/India/Infrastructre
  • www.stpn.soft.net
     


Mrs. Abhinanda Gautam
Faculty Marketing/HR
ICFAI National College
Kota
 

Source: E-mail August 26, 2006

     

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