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World Telecommunications Markets

The International Handbook of Telecommunications Economics, Volume III

Edited by Gary Madden

This major reference work provides a thorough and up-to-date survey and analysis of recent developments in the economics of telecommunications. The Handbook serves both as a source of reference and technical supplement for the field of telecommunications economics.
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Chapter 22: Challenges for Indian telecommunications: the 1990s and beyond

T.H. Chowdary


T.H. Chowdary STATE MONOPOLY OVER TELECOMMUNICATIONS The information technology (IT) and telecommunications market is expanding rapidly in India. Only five years ago telecommunications delivery and network development were in an unsatisfactory state. Complaints were so numerous and frequent that the Minister for Communications described himself as Minister for Complaints. On another occasion after being harassed the Minister told pressmen that it was not compulsory to subscribe to the telephone service and subscribers were free to disconnect whenever they wished. This situation is changing. Telecommunications services used to be provided by a department of the government on a monopoly basis with R&D conducted within this department. Further, telecommunications equipment was supplied by government factories and state-owned enterprises. Naturally, most telecommunications network investment, management, and service decisions were made by civil servant engineers. Administration of the network under the Indian Telegraph Act of 1885 was based on the principle of fail-safe conduct rather than rendering service and the redressing of grievances. Accordingly, when a conflict arose fail-safe conduct took precedence over customer satisfaction. India had chosen the Soviet model of centralized planning, that is, government planned and delivered network development through civil servants. Important activities, including the provision of telephone service, had to be overseen by either government departments or state-owned undertakings on a monopoly basis. Telecommunications service for other than the government was viewed as serving the interests of business and the affluent. Accordingly, the scarce resources of the state should not be deployed to provide telephones on...

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