Laying the Commercial Telematics
In the late 19th century, telegraph lines were first introduced in India, providing a revolutionary means of long-distance communication. Initially established under government control and oversight, the telegraph network grew rapidly across the country in its early decades. However, service was often unreliable due to underfunding and poor infrastructure. It wasn’t until the 1880s that the first telephone exchanges began operations in the major cities of Calcutta, Bombay and Madras under the administration of the Post & Telegraph Department. The number of telephone subscribers increased gradually but usage was still very limited due to the high costs involved. Throughout this period, telecom services were largely inaccessible to the public and commercial applications were limited.
Liberalization and Commercial Telematics
Major changes began in the 1980s as the government embarked on a program of liberalization and privatization of the telecom sector. In 1985, the Department of Telecommunications was established as a separate body to oversee telecom services. Commercial Telematics Private companies were gradually allowed to enter the market in technical collaborations with state-run organizations. This led to expansion of basic telephony services and introduction of new technologies like digital switching. A major milestone was achieved in 1994 with the implementation of the National Telecom Policy. This announced plans for broad structural reforms including the establishment of an independent regulatory authority and allowing full private sector participation.
The 1990s saw rapid growth as mobile and value-added services took off. Major private companies were brought in through competitive bidding processes. Cellular services were introduced in select cities operated by state-owned Mahanagar Telephone Nigam Limited and later private sector entrants. Following the recommendations of the 12th Finance Commission in 1998, the Department of Telecommunications was reorganized as a public limited company - Bharat Sanchar Nigam Limited. This marked the first step towards creating separated entities for licensing, regulatory and provisioning functions.
Explosive Growth of Commercial Telecom
The real transformation of the Indian telecom sector began in the late 1990s and 2000s as a wave of deregulation, liberalization and competitive bidding gathered pace under a new regulatory framework. In 2000, the Telecom Regulatory Authority of India was established as an independent regulator to create a level playing field. Private operators were allowed to provide both national long distance as well as international services, revolutionizing commercial connectivity. Tariffs fell drastically with six cellular mobile service providers selected through an open bidding process in multiple circles across India.
This marked the onset of a period of hyper growth for the industry. Affordability of services due to fierce competition led to mobile phones achieving mass proliferation at a torrid pace. By the mid-2000s, India had emerged as one of the world’s fastest growing telecom markets in terms of subscriber addition and revenue growth. Commercial applications flourished as mobile penetration grew exponentially, expanding access in rural and remote areas. Services like text messaging, mobile banking and wireless internet helped facilitate new business models across sectors. Private investment poured in as over a dozen companies vigorously expanded 2G, 3G and 4G networks nationally.
Progress, Pitfalls & Convergence
While phenomenal progress had been made in tele-density and coverage, various regulatory and infrastructure challenges began emerging in subsequent years. By the late 2000s, India was facing an acute spectrum shortage and infrastructure bottlenecks as explosive demand stressed the system. Controversies around allocation of 2G spectrum in 2010 led to major reforms to introduce transparency. However, policy flip-flops, high taxes and entry of arbitrarily priced players hurt investor confidence intermittently. But concerns around a duopoly also drove further licensing rounds and entrance of Reliance Jio in 2016.
the last decade witnessed the ushering in of digital transformation and convergence of technologies. Commercial applications have been uplifted by ubiquitous mobile connectivity and affordable data. Telecom is recognized today as a critical utility and growth driver, enabling digital services across multiple industries. Cloud, IoT, video platforms and other technologies are bringing about new opportunities for businesses. With over 750 million broadband subscriptions currently, India is poised to leverage its digital foundations to chart new frontiers through 5G and beyond. Emerging areas like smart cities, e-health and digital education hold immense commercial potential through robust telecom infrastructure nationwide.
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About Author:
Alice Mutum is a seasoned senior content editor at Coherent Market Insights, leveraging extensive expertise gained from her previous role as a content writer. With seven years in content development, Alice masterfully employs SEO best practices and cutting-edge digital marketing strategies to craft high-ranking, impactful content. As an editor, she meticulously ensures flawless grammar and punctuation, precise data accuracy, and perfect alignment with audience needs in every research report. Alice's dedication to excellence and her strategic approach to content make her an invaluable asset in the world of market insights.
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