History of Telecom Industry
History of the Telecom Industry
• 1851 First operational land lines were laid by the government near Calcutta (seat of British power) • 1881 Telephone service introduced in India • 1883 Merger with the postal system • 1923 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
Constraints
• 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
• 1851 First operational land lines were laid by the government near Calcutta (seat of British power) • 1881 Telephone service introduced in India • 1883 Merger with the postal system • 1923 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
Constraints
• 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