Telecommunications in India


India's telecommunication network is the second largest in the world by number of telephone users with over 1.19 billion subscribers as of September 2024. It has one of the lowest call tariffs in the world enabled by multiple large-scale telecom operators and the ensuant hyper-competition between them. India has the world's second largest Internet user-base with over 949.21 million broadband internet subscribers as of September 2024.
Major sectors of the Indian telecommunication industry are the telephone, internet and television broadcast industries in the country which are involved in an ongoing process of developing into a next-generation network, increasingly employing an extensive array of modern network infrastructure such as digital telephone exchanges, network switching subsystems, media gateways and signaling gateways at the core, interconnected by a wide variety of transmission systems using optical fiber or microwave radio relay networks. The access network, which connects the subscriber to the core, is highly diversified with different copper-pair, optical fiber and wireless technologies. Satellite television, a relatively new broadcasting technology has attained significant popularity in the Television segment. The introduction of private FM has boosted radio broadcasting in India. Telecommunication in India has been greatly supported by the Indian National Satellite System system of the country, one of the largest domestic satellite systems in the world. India possesses a diversified communications system, which links all parts of the country by telephone, Internet, radio, television and satellite. India's participation in global telecommunications and spectrum policy discussions is supported by the ITU-APT Foundation of India, a sector member of ITU-R, ITU-T, and ITU-D.
The Indian telecom industry underwent a high rate of market liberalisation and growth since the 1990s and has now become the world's most competitive and one of the fastest growing telecom markets.
Telecommunication has supported the socioeconomic development of India and has played a significant role in narrowing down the rural-urban digital divide to an extent. It has also helped to increase the transparency of governance with the introduction of e-governance in India. The government has pragmatically used modern telecommunication facilities to deliver mass education programmes for rural communities in India.
According to the London-based telecom trade body GSMA, the telecom sector accounted for 6.5% of India's GDP in 2015, or about, and supported direct employment for 2.2 million people in the country. GSMA estimates that the Indian telecom sector will contribute to the economy and support 3 million direct jobs and 2 million indirect jobs by 2020.
In today's period of progress and wealth, technological modernization is increasingly seen as a foreseen necessity for every country. With better technology and more competition from established businesses, telecommunications has entered a new era of development. The continuous rise of the mobile industry is linked to technological advancements in the telecommunications sector. The service providers' primary goal is to build a loyal customer base by measuring their performance and maintaining existing consumers in order to profit from their loyalty. The purpose of the paper is to address these concerns.

History

The beginning

Prof. S. P. Chakravarti is known as the father of electronics and telecommunications engineering in India. He started electronics and telecommunications education, training and research in India.
Telecommunications in India began with the introduction of the Telegraphy. The Indian postal and telecom sectors are one of the world's oldest. In 1850, the first experimental electric telegraph line was started between Kolkata and Diamond Harbour. In 1851, it was opened for the use of the East India Company. The Posts and Telegraphs department occupied a small corner of the Public Works Department at that time.
The construction of of telegraph lines was started in November 1853. These connected Kolkata and Peshawar in the north; Agra, Mumbai through Sindwa Ghats, and Chennai in the south; Ooty and Bangalore. William O'Shaughnessy, who pioneered the Telegraphy and telephone in India, belonged to the Public Works Department, and worked towards the development of telecom throughout this period. A separate department was opened in 1854 when telegraph facilities were opened to the public.
In 1880, two telephone companies, namely the Oriental Telephone Company Ltd. and the Anglo-Indian Telephone Company Ltd. approached the Government of India to establish a telephone exchange in India. Permission was refused on the grounds that the establishment of telephone networking was a government monopoly and that the government itself should undertake the work. In 1881, the government later reversed its earlier decision and a licence was granted to the Oriental Telephone Company Limited of England for opening telephone exchanges at Kolkata, Mumbai, Chennai and Ahmedabad and the first formal telephone service was established in the country. On 28 January 1882, Major E. Baring, Member of the Governor General of India's Council declared open the Telephone Exchanges in Calcutta, Bombay and Madras. The exchange in Calcutta named the "Central Exchange" had a total of 93 subscribers in its early stage. Later that year, Bombay also witnessed the opening of a telephone exchange.

Further developments and milestones

Development of Broadcasting: Radio broadcasting was initiated in 1927 but became state responsibility only in 1930. In 1937 it was given the name All India Radio and since 1957 it has been called Akashvani. Limited duration of television programming began in 1959, and complete broadcasting followed in 1965. The Ministry of Information and Broadcasting owned and maintained the audio-visual apparatus—including the television channel Doordarshan—in the country prior to the economic reforms of 1991. In 1997, an autonomous body was established in the name of Prasar Bharti to take care of the public service broadcasting under the Prasar Bharti Act. All India Radio and Doordarshan, which earlier were working as media units under the Ministry of I&B became constituents of the body.
Pre-liberalisation statistics: While all the major cities and towns in the country were linked with telephones during the British period, the total number of telephones in 1948 numbered only around 80,000. Post-independence, growth remained slow because the telephone was seen more as a status symbol rather than being an instrument of utility. The number of telephones grew leisurely to 980,000 in 1971, 2.15 million in 1981 and 5.07 million in 1991, the year economic reforms were initiated in the country.

Liberalisation and privatisation

The liberalisation of the Indian telecommunications industry started in 1981 when then Prime Minister Indira Gandhi signed contracts with Alcatel CIT of France to merge with the state owned Telecom Company, in an effort to set up 5 million telecom lines per year. Soon after the contracts were signed, the policy was left unfufilled due to political opposition. Attempts to liberalise the telecommunication industry were continued by the following government under the prime-minister-ship of Rajiv Gandhi. He invited Sam Pitroda, a US-based Non-resident Indian and a former Rockwell International executive to set up a Centre for Development of Telematics which manufactured electronic telephone exchanges in India for the first time. Sam Pitroda had a significant role as a consultant and adviser in the development of telecommunication in India.
In 1985, the Department of Telecom was separated from Indian Post & Telecommunication Department. DoT was responsible for telecom services in entire country until 1986 when Mahanagar Telephone Nigam Limited and Videsh Sanchar Nigam Limited were carved out of DoT to run the telecom services of metro cities and international long-distance operations respectively.
The demand for telephones continued to increase and in the 1990s the Indian government was under mounting pressure to open up the telecom sector for private investment as a part of the Liberalisation-Privatisation-Globalisation policies that the government accepted to overcome the severe fiscal crisis and resultant balance of payments issue in 1991. Consequently, private investment in the sector of Value Added Services was allowed and cellular telecom sector were opened up for competition from private investments. It was during this period that the Narsimha Rao-led government introduced the National Telecommunications policy in 1994 which brought changes in the ownership, service and regulation of the national telecommunications infrastructure. The policy introduced the concept of telecommunication for all and its vision was to expand the telecommunication facilities to all the villages in India. Liberalisation in the basic telecom sector was also envisaged in this policy. They were also successful in establishing joint ventures between state owned telecom companies and international players. Foreign firms were eligible to 49% of the total stake. The multi-nationals were just involved in technology transfer, and not policy making.
During this period, the World Bank and ITU had advised the Indian Government to liberalise long-distance services to release the monopoly of the state-owned DoT and VSNL and to enable competition in the long-distance carrier business which would help reduce tariff's and better the economy of the country. The Rao run government instead liberalised the local services, taking the opposite political parties into confidence and assuring foreign involvement in the long-distance business after 5 years. The country was divided into 20 telecommunication circles for basic telephony and 18 circles for mobile services. These circles were divided into category A, B and C depending on the value of the revenue in each circle. The government threw open the bids to one private company per circle along with government-owned DoT per circle. For cellular service two service providers were allowed per circle and a 15 years licence was given to each provider. During all these improvements, the government did face oppositions from ITI, DoT, MTNL, VSNL and other labour unions, but they managed to keep away from all the hurdles.
In 1997, the government set up TRAI which reduced the interference of Government in deciding tariffs and policymaking. The political powers changed in 1999 and the new government under the leadership of Atal Bihari Vajpayee was more pro-reforms and introduced better liberalisation policies. In 2000, the Vajpayee government constituted the Telecom Disputes Settlement and Appellate Tribunal through an amendment of the TRAI Act, 1997. The primary objective of TDSAT's establishment was to release TRAI from adjudicatory and dispute settlement functions in order to strengthen the regulatory framework. Any dispute involving parties like licensor, licensee, service provider and consumers are resolved by TDSAT. Moreover, any direction, order or decision of TRAI can be challenged by appealing in TDSAT. The government corporatised the operations wing of DoT on 1 October 2000 and named it as Department of Telecommunication Services which was later named as Bharat Sanchar Nigam Limited. The proposal of raising the stake of foreign investors from 49% to 74% was rejected by the opposite political parties and leftist thinkers. Domestic business groups wanted the government to privatise VSNL. Finally in April 2002, the government decided to cut its stake of 53% to 26% in VSNL and to throw it open for sale to private enterprises. TATA finally took 25% stake in VSNL.
This was a gateway to many foreign investors to get entry into the Indian telecom markets. After March 2000, the government became more liberal in making policies and issuing licences to private operators. The government further reduced licence fees for cellular service providers and increased the allowable stake to 74% for foreign companies. Because of all these factors, the service fees finally reduced and the call costs were cut greatly enabling every common middle-class family in India to afford a cell phone. Nearly 32 million handsets were sold in India. The data reveals the real potential for growth of the Indian mobile market. Many private operators, such as [Reliance Communications, Jio, Tata Indicom, Vodafone, Loop Mobile, Airtel, Idea etc., successfully entered the high potential Indian telecom market. In the initial 5–6 years the average monthly subscribers additions were around 0.05 to 0.1 million only and the total mobile subscribers base in December 2002 stood at 10.5 million. However, after a number of proactive initiatives taken by regulators and licensors, the total number of mobile subscribers has increased rapidly to over 929 million subscribers as of May 2012.
In March 2008, the total GSM and CDMA mobile subscriber base in the country was 375 million, which represented a nearly 50% growth when compared with previous year.
As the unbranded Chinese cell phones which do not have International Mobile Equipment Identity numbers pose a serious security risk to the country, Mobile network operators therefore suspended the usage of around 30 million mobile phones by 30 April 2009. Phones without valid IMEI cannot be connected to cellular operators.
India has opted for the use of both the GSM and CDMA technologies in the mobile sector. In addition to landline and mobile phones, some of the companies also provide the WLL service. The mobile tariffs in India have also become the lowest in the world. A new mobile connection can be activated with a monthly commitment of US$0.15 only.
Decentralisation has been the new push by the government through PM WANI scheme launched in Dec 2020 to push Internet penetration above the current 50% threshold into smaller towns and villages. This opens up opportunities for multiple small and medium scale local business models as well as decentralized solutions using Blockchain.