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India Telecom Market

The word “ Telecom ” (which is an abbreviated version of ' telecommunication' ) in real sense refers to the transfer of information between two distant points in space. This meaning however, has been subjected to modifications in accordance with further innovations made be the Telecom Industry.

History of Telecommunication in India:

In 1880, two telephone companies namely “The Oriental Telephone Company Limited” and “The Anglo-Indian Telephone Company Limited” approached the Government of India with the objective of establishing Telephone Exchanges across the country. Initially, the Government denied the permission as it wanted to exercise its monopoly power over the promising industry once it emerged. By the following year, it changed its decision and finally on 28 th January,1882, license was granted to The Oriental Telephone Company Limited of England for opening telephone exchanges at Kolkata, Mumbai, Chennai and Ahmedabad.

The opening of exchanges was followed by further innovations and improvements in all sections of the telecom industry . However, while telephones were introduced in the major towns and cities across the country during the British period, total number of telephones in India in 1948 was merely 80,000. The growth was negligible even after independence and the telephone was used as a status symbol by the rich despite being an extremely essential device of public utility. This sluggish rate of growth continued till 1991 when the number of telephones was 5.07 million.

The period post 1975 saw an resurgence in the India Telecom Market by virtue of a series of fruitful decisions initiated by the Government which included:

  • The separation of Department of Telecom (DoT) from Post and Telegraph (P&T) in 1975.
  • The formation of Mahanagar Telephone Nigam Limited (MTNL) out of DoT to provide telecom services exclusively to Delhi and Mumbai.
  • In the 1990s, the telecom sector was opened up by the Government for private investment as a part of Liberalization-Privatization-Globalization Policy.
  • On 1 st October, 2000, the Government corporatized its operations wing under the name of Bharat Sanchar Nigam Limited (BSNL).

To top it all, the introduction of mobile communication is undeniably the biggest success story scripted by the telecom industry.

India's Telecom Market

Mobile services were commercially launched in India in August, 1995. Although in the initial years, the high prices of handsets and allied services hindered the growth of the telecom market in India , the New Telecom Policy in 1999 introduced several consumer-friendly initiatives. The entry of private operators like Airtel,Hutch,Reliance,Tata,BPL,Idea etc. created a competitive market which further reduced operational costs. Since then, the number of mobile subscribers began to rise in leaps and bounds. The number of new mobile subscribers rose from 16 million in 2003 to 65 million in 2006. With 156.31 million subscribers across the country, India has become one of the fastest growing mobile markets in the world.

The other forms of figurative information provided by FICCI which are worth mentioning are:

  • In the coming seven years, the share of FDI to urban areas would be as high as 92% and the remaining would be bestowed to rural areas.
  • The companies dealing with organized retailing are expected to grow at the rate of 50% every year till at least year 2010 .



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