The historic New Telecommunications Policy (NTP) that was announced in 1994 further carries forward the de-monopolization of the telecom sector in India that started in the mid 1980s when production of telecom equipment and telephone cables, till then reserved.
Only to the PSUs, was thrown open to private sector. This policy de-monopolizes the network construction and operation and provision of (basic) telephone services also by allowing private sector companies into that area. Just as equipment and cable production de monopolization has led to private capital investment of Rs 1000 crores (2.5 times the PSUs invested in 47Years) and competition with beneficial consequence of abundance, lowered prices, improved quality and quicker deliveries, service de-monopolization would also lead to such beneficial results to customers, existing and potential. We would soon see the end of waiting lists and emergence of varieties of new services available elsewhere in the world and direly needed for Indian companies to be competitive at home and abroad.
The evil results of the earlier monopolistic regime have been:
• Increasing shortage of telephones. The waitlisted at the end of every 5-year plan was more than at the beginning. The demand-supply gap had no parallel, e.g. power shortage has been 10% whereas the telephone shortage had been 25 to 40%!
• Prices (rentals, call charges, lease-rates) had been increasing continuously while elsewhere in the world growing electronification has been leading to lower prices for telecoms.
• The quality of service, especially attitude to customer requests and complaints, had been deteriorating.
• New services becoming available due to convergence of computers and telecommunications all over the world have not been introduced in India.
• There was miserable failure of R & D resulting in repeated import of technologies (four-generations of switches) and equipment and cables.
• The manufacturing PSUs had been invariable product • companies, hardly developing anything in-house.
NTP de-monopolizes, does not privatize:
Let us get one thing clear. This is not privatization. lTl, HCL, HTL, MTNL and VSNL, the PSU’s, have not been sold to private people. They continue but face competition. So would the DOT continue, most likely as a number of State-wide PSUs, to be able to face competition? The most important character of telecoms is net-working. A telephone from whichever company and whatever country it is taken must be able to reach and interwork with every one of the 800 million phones in the world’s 200 countries, without the subscriber putting in any special efforts. This is what is happening at the international level with well established standards and inter-network payments. Those mechanisms and procedures have to be adopted within the country with multiple service providers and wire-line and wireless systems as is happening in the UK, Japan, New Zealand, USA, Malaysia, Thailand, Srilanka, Pakistan, etc.
The earlier (1991) decisions to entrust value-added services (actually new services like cellular mobile radio telephony, radio-paging, electronic mail, audio and video conferencing VSAT-based data net-works, online database access and other information services) only to the private sector and still earlier (1986 to ‘91) actions that have, over the last eight years, allowed private sector companies to produce all types of telecom equipments and cables, the telecom sector is now de-monopolized, across the board.