Indian telecommunications: A government agenda

Abstract

The Indian telecommunications sector has been through a dynamic phase of changes in e 90s. Several initiatives taken by the government for example, opening up of basic and cellular services to private participation have been welcomed by industry. However, industry players await initiatives that will make telecom more competitive and financially viable. The overarching presence of the government player i.e. the Department of Telecommunications (DoT) in policy making, operations and regulation has created an uneven balance of power. Today, the presence of the Telecom Regulatory Authority of India (TRAI) attempts to balance this out. However, TRA I's jurisdiction has been heavily debated in the last two years i.e. since its creation. The biggest concern relates to the inability of cellular license holders to pay the promised license fee. This situation is a result of a commitment to massive fees coupled with a lack of sufficient demand to generate the revenues needed. Bankruptcy is imminent for players and they are looking for solutions to their financial problems, which will help them remain in the industry. Tariffs are imbalanced i.e. local call charges versus long-distance call rates and this causes the outgoing traffic from India to be much lower than the incoming traffic from other countries like the US. If telecom is to be made a free market, re-balancing of tariffs is necessary in order to make the industry attractive to private players (yet maintain DoT's profitability).

In terms of technology India faces the inevitability of 'convergence’ of telecom with the transmission of data and information and with broadcasting. There is a need for the government to take steps that will bring together these three industries and therefore keep with global trends. India can learn lessons from the process adopted by other countries like the United States of America, United Kingdom, Hong Kong and Singapore. These countries have adopted the models of public monopoly or private monopoly and moved towards privatization to become leaders in telecom development.