Sam Pitroda's major contribution was in developing low cost, indigenous switches

How telecom turned free India’s economic dream into reality

Manoj Gairola Indian Express: Home > Business > Thursday, August 09, 2007

During the first war of independence in 1857, the biggest advantage the imperialists had over the revolutionaries was the telecom network, which helped them communicate revolutionaries’ moves and pre-plan strategy against them. By the last leg of freedom struggle, the nationalists had access to the same communication system. When India finally got its political freedom, it came with around 86,000 telephone connections. Today, the country is adding more than twice that number every day to its 250 million strong network, with 7 million new subscribers joining in July 2007.

This connectivity has brought with it jobs and knowledge based exports of services that are driving the 9 per cent plus growth. When we celebrate the IT and software revolution, remember, it stands on a strong telecom backbone — in 1991, knowledge based exports stood at $40 million; today, the figure is around $40 billion. Take that further and you see how teledensity of any country is directly related to its economic development.

Until 15 years ago, it raised no eyebrows to see a 15-20 year wait for a new telephone connection in cities, with almost zero connectivity in large parts of rural areas. Department of telecommunications (DoT) under ministry of Post & Telegraph (P&T) was the sole telecom service provider. It’s a different landscape today and with six service providers in metros and category A circles, operators are chasing subscribers, turning scarcity into abundance, luxury into necessity. History of telecommunications in India can be broadly divided into two periods — before liberalisation and post liberalisation.

Contrary to popular belief, liberalisation in telecom equipment took place first and then followed liberalisation in services. In the 1980s, Sam Pitroda played an important role in the development of telecom network.

• His first achievement was to convince the government about the significance of communications for socio-economic development of the country.
• His second major contribution was in developing indigenous switches and passing on the low cost (and no air-conditioners required) technology to local manufacturers, which helped bring down prices of switches and allow DoT to provide more connections within the same budget.
• His third achievement was in bringing PCO policy that was responsible for providing access to telephone to all even in far flung areas.

With the formulation of New Telecom Policy in 1994 (NTP 94), a major step was taken in liberalisation of telecom services. The policy permitted DoT to award licences to private operators to offer telecom services. Thus, competition began in a field that was hitherto a government monopoly. NTP 94 also envisaged setting up Telecom Regulatory Authority of India, essential to ensure competition.

NTP 94 was revised five years later and was replaced by NTP 99. This further liberalised telecom services and made licences technology-neutral. As a result, India has became one of the most competitive markets in the world, with one of the lowest telephone tariffs in the world and with two telecom companies — Airtel and Reliance — among the top five most valued companies of India. That’s freedom. incredible journey
1984 C-DOT established
1994 New Telecom Policy 1994 announced
1994 Eight telecom operators issued licences to provide services in eight metros.
1995 India's first mobile telephone service launched in Kolkata by Modi Telstra
1995 DoT issues 33 licenses to 13 companies for GSM mobile services
1997 Trai set up
1999 National Telecom Policy 99 replaces NTP 94
2000 BSNL formed, DoT's role limited to policy formulation