National Telecom Policy 94 & 99

Overview

The Indian Telecom industry is the world’s fastest growing industry with approximately 800 million mobile phone subscribers. After China we have the largest telecommunication network .Also the future prospects of this industry is looking very good,it is projected that India will have 1.159 billion mobile subscribers by 2013. Currently we are growing at a rate of 12% and are expected to grow at 26% in upcoming years. One more big advantage of this growth is that , this sector will create direct and indirect employment that is 2.8 million and 7 respectively.

Now the growth rate which we are experiencing today or what we are expected to achieve in future find it roots back in history that is National Telecom Policy 94 and 99.  These two pillars on which our whole telecom industry is resting today actually revolutionized this industry and catered its growth process.

National Telecom Policy 94   

In 1990’s the telecom sector was opened up by the government for private investment as a part of liberalisation-privatization-globalisation policy. Therefore, it became necessary to separate the government’s policy department from its operations. Many technological developments took place in this particular period but still foreign players were not allowed to participate in the telecommunication business.

The demands for telephone was ever increasing. Then during this period Narsimha Rao led government introduced National Telecom Policy(1994) which was aimed at changing the ownership, service and telecommunication infrastructure. As our economy was being liberalized so by introducing this National Telecom Policy the idea was to attract more foreign direct investments and stimulate domestic investment. In that period our teledensity was also very low as compared to other developing countries like China,Pakistan,Malaysia etc. Therefore this also aimed at telecommunication for all and telecommunication within the reach of all, policy aimed at covering almost all the villages/remote areas as early as possible and provide consumer with quality.

As we were lagging behind so in order to achieve standards compatible to the international facilities, the sub-sector of value added services was opened up. The inflow of technology should be maintained so that we can get the maximize advantage out of it or should be able to pace up with the latest technology. This policy  allowed companies register in India or multinational companies only to transfer technology they were not involved in policy making and it was handled by government only.

New Telecom Policy 99 

In 94’s National Telecom policy some of the important objectives were availability of telephone on demand, provision of world class services, making India as a big manufacturing base. Also some targets were set which were achieved quite efficiently and comprehensively but government also recognized that required resources for achieving these targets resources would not be available only out of government sources and concluded that private investment and involvement of the private sector was required to bridge the resource gap.

Now adhering to the above statement government invited private sector participation initially for VAS and later on they expanded for fixed telephone services also. VSAT services were also liberalized. In this period government announced the policy for Internet service providers by private operators. Global Mobile For Personal Communication by satellite was also opened up.

After so much of restructuring of the industry still the results were not entirely satisfactory. The main reason behind this was the operators was unable to arrange financing for their projects. Now this problem led to the convergence of both markets and technologies and that forced realignment of the industry. Now different cellular, ISP,satellite and cable TV operators had different structure and requirement to create their own infrastructure, but because of the convergence mentioned above allowed operators to use their facilities to deliver some services reserved for other operators.

Conclusion

The above mentioned two telecom policies really boosted the Telecom industry in India. Major changes took place in industry like enhancing telecom infrastructure, on demand phone communication was made feasible, privatization, convergence of two markets etc therefore resulting in a more robust network infrastructure. After 1999 also some policies came but whatever came after these two policies was only the extention of what was already being proposed in 94 and 99. If we compare our state  couple of decades back to now where we are, I think that these two policies are the difference makers or the catalyst which thumped us from nowhere to where we are today.




                                                                                                                      By - Anubhav Mishra