Telecom infrastructure has been recognized as an important tool for the socio-economic development of a nation. It not only interlinks the people of a country through a communication network, but also enhances global connectivity and competitiveness of the economy. India's telecommunication network is the third largest in the world and the second largest among the emerging economies of Asia. It is also amongst the fastest growing telecom markets in the world. Our telecom industry manufactures a complete range of telecom equipments using the state of the art technologies designed specifically to match the diverse terrain and climatic conditions. Production of telecom equipment has increased from Rs. 16,090 crore in 2004-05 to Rs.17,833 crore in 2005-06. As a result, India is expected to become a manufacturing hub for telecom equipment.
Tele-density, the most important factor in determining the penetration of telephone lines in a country has been increasing over the years, from 7 per cent in March 2004 to 18.7 per cent in April 2007. The total number of telephones has increased from 54.63 million on March 31, 2003 to 189.92 million on December 31, 2006.
At the same time, the growth of wireless service has been phenomenal, with wireless subscribers increasing at a compound annual growth rate (CAGR) of above 90 per cent per annum since 2003. Thus, the wireless subscribers have surpassed the fixed subscribers and are also increasing at a much faster pace. The share of wireless phones has increased from 24.3 per cent in March 2003 to 78.77 per cent in December 2006.
Such rapid strides made by the telecom industry has been facilitated by the supportive and liberal policies of the Government and a fair regulatory framework which provides telecom services to the Indian consumers at affordable prices. With economic reforms, the sector has undergone a major transformation from an exclusive State monopoly to a competitive platform attracting private players from around the world. The Telecom Policy of 1994 opened the doors of the sector for private players and the process was given a further boost by the telecom policy announced in 1999. The New Telecom Policy (NTP) of 1999, takes into account the global technological developments in the field of telecom. It aims to make India, a global IT superpower and develop a world class telecom infrastructure in the country. It focusses on creating an environment, which enables continued attraction of investment into the industry. Towards this end, the New Policy Framework includes the following in the telecom service sector :-
As a result of all such initiatives, private participation is permitted in almost all the segments of telecom services, namely, international long distance, domestic long distance, basic, cellular, internet, radio-paging, and a number of value-added services.
Regulatory Framework
The Department of Telecommunications , under the Ministry of Communications and Information Technology, is the concerned authority for all matters relating to telecom. The department is responsible for formulating the developmental policies; granting licenses for various telecom services ; promoting standardization, research and development as well as private investment in the sector.
With the entry of private players in the provision of telecommunication services, there was a need to have an adequate framework of safeguards so as to ensure fair and healthy competition. Accordingly, an independent regulatory body called as the Telecom Regulatory Authority of India (TRAI) was established in 1997, under the Telecom Regulatory Authority of India Act, 1997.
Some of the functions of the Authority, as per the Act are :-
- Recommend the need and timing for introduction of new service providers as well as the terms and conditions of licence to them;
- Ensure technical compatibility and effective inter-connection between different service providers;
- Regulate the arrangements of revenue sharing amongst the service providers;
- Ensure compliance of terms and conditions of licence as well as recommend revocation of licence for non-compliance;
- Laydown and ensure the time period for providing local and long distance circuits of telecommunication between different service providers;
- Facilitate competition and promote efficiency in the operation of telecommunication services;
- Protect the interest of the consumers of telecommunication service;
- Conduct periodical survey to monitor the quality of services provided by the service providers; and
- Perform such other functions including such administrative and financial functions as may be entrusted to it by the Central Government or as may be necessary to carry out the provisions of this Act.
TRAI has been set up with the mission to create and nurture such conditions for the growth of telecommunications, which will enable India to play a leading role in the global information society. One of its main objectives is to provide a fair and transparent policy environment which creates a level playing field for both domestic and foreign players. In order to fulfil these responsibilities, TRAI has been issuing from time to time, a number of regulations, orders and directives covering a wide range of subjects including tariff, interconnection and quality of service, etc.
The Telecom Regulatory Authority of India Act, 1997 was amended by the Telecom Regulatory Authority of India (Amendment) Act, 2000. By the Amendment Act, an Appellate Tribunal known as the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) has been set up to protect the interests of service providers and consumers of the telecom sector and thus ensure an orderly growth of the sector. It has been empowered to adjudicate any dispute between a licensor and a licensee; between two or more service providers; between a service provider and a group of consumers; and to hear and dispose of appeals against any direction, decision or order of TRAI.
Given the existing telecommunication set up, the future vision for the sector envisages a total of 650 million telephone connections (including 66 million wired and 584 million wireless connections) by the end of 2012; concurrent provision of 200 million rural telephone connections, which translates into a rural tele-density of 25 per cent; availability of broadband connectivity on demand, without any limitation on the speed; as well as increase in internet and broad-band subscribers to 40 million and 20 million, respectively, by 2010.
Internet
Internet is increasingly becoming a basic infrastructural requirement of the Indian masses. It is making deep inroads into everyday life of the people. It is a medium by which they can access information on any topic, at any time and from any place. Today, high speed internet access is available at various speeds starting from 64 kilobits per second (kbps) onwards. While, an always-on high speed internet access at 128 kbps is considered as ‘Broadband'.
The number of internet and broadband subscribers, over the years, has been growing steadily in the country. It has increased from 69 lakh and 13 lakh respectively (as on March 31, 2006) to 86 lakh and 20 lakh respectively (as on December 31, 2006). The 'Broadband policy' aims at further increasing the broadband subscriber base to around 20 million by the end of 2010.
Internet Service provider (ISP) Policy, announced in 1998 prohibited telephony on internet. While, the New Telecom Policy, 1999 envisaged opening up of internet telephony. Presently, there are around 385 internet service provider (ISP) licencees in the country, out of which, 125 ISPs have been permitted to offer internet telephony service (as on December 31, 2006).
Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited ( MTNL) are the two largest internet service providers in the country, with a market share of more than 55% approximately.
BSNL provides internet service throughout the country, except in New Delhi and Mumbai. It has more than 17 lakh subscribers and is providing internet service under the brand name of Sancharnet. Under it, free all India roaming is provided, which enables it's users to access their accounts, using the same access code (172233) and user ID from any where in the country.
MTNL is offering a wide spectrum of internet related services from dial-up internet access to broadband internet access services in Delhi and Mumbai . These include:-
- ADSL (Asynchronous Digital Subscriber Line) internet service
- Prepaid Internet
- Post paid Internet Express CLI service
- Free web to mobile for MTNL GSM Mobile subscribers
- Internet Telephony Service
- Bill payment services
- E-mail over Telephony MTNL mail service
- Website hosting service
- Web server hosting service
- Internet service via leased Lines
- Phone connection for Internet Use
