Rise and Decline of Telecommunication Revolution in India

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A study of Telecom sector in India over the past 15 years constitutes an excellent case study on the impact of good and bad regulatory policies on the fortunes of a sector of economy. This book 'Rise and Decline of Telecommunication Revolution in India' authored by two vastly experienced authors P.K. Sandell and D.K. Ghosh does precisely that and draws several interesting conclusions. In the first place, its emphasis is on the socio economic aspects and not technology which is indeed the kind of focus needed for formulation of sound and visionary policies. It goes on to stress how steps taken in the initial stages led to an ever increasing success of Telecom sector expectations of the pioneers of the new and bold policy makers -making it the poster boy of a growing economy. It then traces how a set of wrongly placed policy emphasis and corruption have led to the rapid decline. In the second place, the authors bring out why the socio economic aspect of telecom is far more important than all others including the temptation of the policy makers to consider telecom sector primarily as a source of generating more revenues for the government. The authors point out that India's villages are no longer the somnolent areas of darkness. They are pulsating with a new awareness. Telecom could give voice to our people, in particular to our rural masses, in a way that would make for transparency in governance and make the authorities listen to people. By analysing the rural scenario and rural penetration the authors have shown the rural market in a new light. Amongst the various conclusions drawn by the authors an important one is that the true aim of the telecom spread was not enriching government coffers but providing an affordable service to the people and that every entity involved in the telecom needs to ask whether its approach has served that goal. They go on to state that setting revenue targets and then formulating policies around it almost always end up as being opposed to the idea of affordable services thereby disregarding the socio economic benefits of telecom. I congratulate the authors for posing this question before the policy makers and other stakeholders in telecom sector. 

The Telecom Revolution in India where the teledensity rose from less than two in 1999 to over 80 per cent as on date has been recognised as a tremendous achievement not only within the country but all over across the globe. A combination of Government policy of Revenue Share Regime coupled with the innovative aggressive approach by private enterprise has been responsible for this singular achievement. It is true example of what Prime Minister Dr. Manmohan Singh terms as the "animal spirit" of competitive endeavour. What Dr. D.K. Ghosh and Mr. P.K. Sandell's book recalls is not just the growth but the socio-economic impact of the telecom revolution. They have gone at length to explain how the mobile phone acts as a potent device in the hands of poor and underprivileged and could turn out as a game changer for the whole society. They also warn us that this hope of telecom as a game changer could be marred by some recent events. We have already seen that the heady growth of 10 to 15 million subscribers a month has petered out. I find the analysis presented in the book as to why this has happened is very illuminating. Events in the last few months after the book was written have validated their warnings. The authors have also done well to underline the huge gap in domestic manufacturing capacity and R&D that has resulted in almost the entire tele-density growth benefiting foreign manufacturers. The comparison between India and China in this field would be very instructive. China has set up R&D and manufacturing facilities that have catapulted the country to be a global competitor in equipment supply. India too had domestic manufacturing capability but it faltered and the entire equipment had to be imported. The authors are well qualified to analyse this development as both have decades of experience in manufacture and supply of equipment. Now that Government itself is concerned over this huge backwardness in domestic manufacture, I hope the analysis in the book would help policy makers to revamp the electronic manufacturing policy that has been published. I believe that this book is timely as the telecommunication revolution is now stuck at a critical juncture.

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