From analogue roots to digital dreams

India’s telecom odyssey spans from a humble beginning to visionary policies and relentless innovations as India strides toward a trillion-dollar digital economy.

Communication is a fundamental human tenet. Historically, it was confined to the close vicinity, with smoke signals and drums being used for relatively longer distances. Remnants of Kos Minars, or mile pillars, can still be seen along medieval highways. Messages were also transmitted through human interlocutors such as spies and friends and through written messages carried by trained birds like pigeons and falcons.

Telecommunications modes and means have evolved in tandem with advancements in transport, tourism, trade, and technology. Electric telegraphy and telephones were introduced in India within a decade of their global inventions in the nineteenth century. Even Internet services began as early as 1986.

With the rapid convergence of consumer devices and digital services, the time is ripe for a unified digital policy integrating telecom, IT, and broadcasting.

As 2024 marks three decades of the National Telecom Policy, the 40th anniversary of the Computer Policy, and the 20th anniversary of the Broadband Policy, it is an opportune time to assess their impact and chart out a policy roadmap for a digitally enabled Viksit Bharat by 2047. Incidentally, this issue of Voice&Data magazine also marks its 30th anniversary as a publication.

TURNING THE CLOCK TO 1994

Barely 30 years ago, in 1994, telecommunication services were beyond the reach of most Indians, catering primarily to the upper socio-economic strata. About 100,000 public call offices (PCOs) expanded access without ownership to a broader populace.

However, the eight million fixed-line connections remained concentrated in urban areas, even though every fourth village had at least one telephone—usually a village public telephone or VPT. Unsurprisingly, with 2.5 million people on the waitlist, obtaining a telephone under the general category typically took a few years.

FAST FORWARD TO 2024

Today, India has emerged as the world’s second-largest communications market in terms of the number of subscriptions. With one of the lowest tariffs for mobile data and reasonably good network coverage, Indians consume the maximum monthly data.

Today, India has emerged as the world’s second-largest communications market in terms of the number of subscriptions. It has one of the lowest tariffs for mobile data and reasonably good network coverage, much beyond the era when domestic voice calls were billed based on duration and distance. Besides, a host of digital services and applications have become intertwined with daily lives and livelihoods, offering communication, information, entertainment, social media, games, financial services, e-governance, tele-education, and telemedicine.

REWINDING TO NTP 1994

Following the 1991 economic reforms, world-class telecom services were soon seen as a prerequisite to improve India’s global competitiveness and attract investment across the economy—both foreign and domestic. The Department of Telecommunications (DoT) was established as a separate entity from the former Post and Telegraph or P&T department, and it served as both the policymaker and the service provider.

Local services in Delhi and Mumbai were transferred to Mahanagar Telephone Nigam Limited, while Videsh Sanchar Nigam Limited managed the former Overseas Communications Services. Both were under the direct control of DoT.

The government constituted a nine-member Telecom Restructuring Committee (TRC) chaired by Mrityunjay Athreya. Its three key recommendations were that policymaking should remain with the government, all telecom operations must be corporatised and gradually privatised while being subjected to competition from the private sector, and the establishment of an independent, quasi-judicial regulator for the industry.

The ‘Broadband for All’ vision in the National Digital Communications Policy, 2018 bore an uncanny resemblance to ‘Telecommunication for All’ in NTP 1994.

FIRST STEPS TOWARDS REFORM

In 1992, telecom licenses were granted for mobile, paging, VSAT, and email services. As the policymaker, the government announced the first National Telecom Policy (NTP 1994) in May 1994.

This policy focused on ‘telecommunication for all and telecommunication within the reach of all’ while revising the Eighth Five-Year Plan (1992-1997) targets. The targets included providing telephone service on demand by 1997, covering all villages by 1997, establishing one PCO for every 500 persons in urban areas by 1997, and introducing all value-added services available internationally in India, preferably by 1996.

In addition, the policy paved the way for the private sector to provide basic services, such as fixed-line services. However, the corporatisation of existing operations and independent regulation recommended by the TRC were conspicuously absent in NTP 1994. Moreover, the policy was silent on the Internet, which was already generating significant curiosity and interest despite being relatively new. Incidentally, Internet services for the public were launched by VSNL in August 1995 and by private ISPs in November 1998.

As DoT field units felt that private operators were encroaching upon their monopoly, delays, and denials in providing interconnections and other facilities were rampant. Licensees began defaulting on license fee payments they had initially bid for, as the reality was far different from the rosy revenue forecasts. They could not meet their rollout obligations even in urban areas, let alone in rural ones.

The Telecom Regulatory Authority of India (TRAI) debuted in 1997 as a statutory regulator but faced enormous resistance from DoT, leading to litigation concerning its powers and jurisdiction. Clearly, the achievements fell short by a considerable margin, and by 1998, private companies were on the brink of collapse. On the other hand, 290,000 villages remained unconnected at the beginning of 1999. No wonder some experts subsequently termed NTP 1994 as a disaster.

THE GREAT SAVIOUR: NTP 1999

Demonstrating tremendous political will, the New Telecom Policy, 1999 (NTP 1999) arrived like a breath of fresh air and played a pivotal role in reviving the telecom sector. The fixed license fees were replaced by a variable license fee computed based on adjusted gross revenue or AGR, provided the mobile operators surrendered the duopoly granted earlier in each license area.

Moreover, NTP 1999 brought about significant structural changes. Besides offering greater clarity on TRAI’s role, it recognised the convergence across IT, media, telecom, and consumer electronics, emphasising the need for a national information infrastructure using digital technologies. It also proposed introducing the concept of Universal Service Obligation (USO) through a levy to address the needs of rural and remote areas.

While the Convergence Communications Bill of 2001 lapsed in 2004, the USO Fund has been operational for over two decades. Following the amendment of the TRAI Act in 2000, the Telecom Disputes Settlement and Appellate Tribunal or TDSAT was established. TRAI also became the regulator for Broadcasting in 2004. Interestingly, two proposals from NTP 1994 took almost a quarter of a century to materialise, respectively, in the form of the Telecommunications Act, 2023, and the Space Policy, 2023. The corporatisation of DoT’s operations was realised in 2000 with the formation of Bharat Sanchar Nigam Limited (BSNL), ahead of the 2001 target.

THE FUTURE OF CONVERGING HORIZONS

NTP 1999 was followed by the Broadband Policy of 2004 and the NTP 2012. The ‘Broadband for All’ vision in the National Digital Communications Policy, 2018, NDCP 2018 bore an uncanny resemblance to ‘Telecommunication for All’ in NTP 1994, with most targets set for 2022.

The need for a new policy is evident, especially considering the aspiration for a trillion-dollar digital economy and the increasing role of digitalisation in

every aspect of human life. Given the rapid convergence of consumer devices and digital services, the time

is ripe for an integrated Convergence Digital India Policy rather than dealing with telecom, IT, and broadcast separately. 

The author is a public policy expert and a Senior Consultant with the Centre for Social and Economic Progress (CSEP), a think tank.

Views are personal.

By Deepak Maheshwari

feedbackvnd@cybermedia.co.in