1.       INTRODUCTION

             Telecommunications is one of the prime support services needed for rapid growth and modernization of various sectors of the economy. It has become especially important in recent years because of enormous growth of Information Technology (IT) and its significant impact on the rest of the economy. India is perceived to have a special comparative advantage in IT and in IT-enabled services. However, sustaining this advantage depends critically on high quality telecommunication infrastructure. Keeping this in view, the focus of Tenth Plan has to be on the provision of world class telecommunication facilities at reasonable rates. Provision of telecom services in rural areas would be another thrust area to attain the goal of accelerated economic development and social change. Although the telecom network has grown rapidly in recent years, its growth needs to be accelerated further in the Tenth Plan. It is equally important to speed up structural changes in this sector in line with trends in other countries to ensure that telecommunication services are not only made available on the scale needed to sustain rapid growth in the economy as a whole but also that their cost are in tune with the expectations of a modernising economy.

1.2          For a dynamic sector, reforms is a continuous process necessitated by dynamics of change including technological innovations. The telecom sector in India has been witnessing a continuous process of reforms since 1991. With the opening of international long distance services and internet telephony from April, 2002, the process of liberalisation and opening up the sector for competition is complete. Convergence of services is a major new emerging area and the telecom sector will have to address this in the Tenth Plan.

1.3          The New Telecom Policy (NTP) announced in 1999 modified the NTP, 1994 to take into account the far-reaching technological developments taking place in the telecom sector globally and to implement the Government’s resolve to make India a global IT superpower. NTP, 1999 also seeks to solve problems arising out of the implementation of NTP, 1994. The objectives of the NTP 1999 are to:

• Make available affordable and effective communications for the citizens.

•  Strive to provide a balance between the provision of universal service to all uncovered areas, including the rural areas and the provision of high-level services capable of meeting the needs of the country’s economy.

•  Encourage the development of telecommunication facilities in remote, hilly and tribal areas of the country.

•  Create a modern and efficient telecommunications infrastructure taking into account the convergence of IT, media, telecom and consumer electronics and thereby propel India into becoming an IT superpower.

•  Convert Public Call Offices (PCOs), wherever justified, into Public Teleinfo centres offering multimedia services like Intergrated Service Digital Network (ISDN) services, remote database access, government and community information systems etc.

•  Transform in a time bound manner, the telecommunications sector to a greater competitive environment in both urban and rural areas providing equal opportunities and level playing field for all players.

•  Strengthen research and development (R&D) efforts in the country and provide an impetus to build world-class manufacturing capabilities.

•  Achieve efficiency and transparency in spectrum management.

•  Protect the defence and security interests of the country.

•  Enable Indian telecom companies to become truly global players.

2.         Ninth Plan Review

2.1       During the Ninth Plan period, a record growth rate of telecom services was achieved in the country. The network (equipped capacity) grew at an average rate of about 22 per cent. Growth of both cellular mobile phones and fixed line phones has been equally impressive. While private sector concentrated in cellular mobile phones segment, the growth in the Government sector was primarily due to fixed line connections. Against the target of providing 237 lakh Direct Exchange Lines (DELs), about 240.55 lakh additional DELs have been provided during the Ninth Plan. The cellular network has grown from a small base of 3.40 lakh connections to 64.31 lakh connections by the Plan end. As a result of this growth, the tele-density has nearly tripled from 1.57 at the beginning of the Ninth Plan to 4.4 as on March 31, 2002. Details in this regard are given in the Table below:

 

Network Expansion – Ninth Plan

(Lines in lakh)

	As on 31.3.1997	Net  Addition–Ninth Plan			As on 31.3.2002	CAGR
		Public	Private	Total		%
Fixed	145.40	234.68	5.87	240.55	385.95	21.56
Cellular	3.40	2.14	58.77	60.91	64.31	80.00
Total	148.80	236.82	64.64	301.46	450.26	24.79
Tele-density	1.57	--	--	--	4.4	--
VPTs	2.61	2.061	0.00846	2.07	4.68	12.39

 The performance of the Public sector units, i.e. Bharat Sanchar Nigam Ltd. (BSNL) and Mahanagar Telephone Nigam Ltd. (MTNL), has been impressive. Against the target of installing 185 lakh new connections in the original Plan (which was revised to 222.7 lakh in Mid-Term appraisal for BSNL and MTNL) and 237 lakh for the whole sector including private sector the achievement during the Ninth Plan is 240.55 lakh connections including contribution of private sector i.e. more than the target envisaged in the Ninth Plan Document. Ninth Plan also witnessed the beginning of cellular services by the public sector. MTNL launched its mobile services in Delhi and Mumbai as the third operator. Details of targets and achievements of the public sector during the Ninth Plan are given as under.

 

NINTH PLAN (1997-02)

PHYSICAL TARGETS AND ACHIEVEMENTS- Telecommunications

Name of Scheme	Original Target	Revised Targets	1997-98		1998-99		1999-2000		2000-01		2001-02
			Target	Actuals	Target	Actual	Target	Actual	Target	Actual	Target	Actual
Switching Capacity (lakh lines)	230	298	36	35.18	49.3	47.89	54.7	67.17	72.35	71.3	82.46	75.83
DOT	200.6	273	30.8	32.3	44	43.75	49	63.02	67	67	77.76	70.33
MTNL	29.4	25	5.2	2.88	5.3	4.14	5.7	4.15	5.35	4.3	4.7	5.5
Direct Exchange (Lakh lines)	185	222.7	29	32.59	36	37.92	45.5	49.18	52.4	59.25	72.3	57.88
DOT	160	200.7	24.6	28.65	31.5	35.45	40.6	45.4	48	56.29	68.3	53.07
MTNL	25	22	4.4	3.94	4.5	2.47	4.9	3.78	4.4	2.96	4	4.81
TAX (Lakh_lines)	18	23.06	3.25	3.14	4.5	2.06	4.53	4.8	5.15	5.12	10.1	9.97
DOT	15.24	18.87	2.75	2.77	3.87	2.06	4	4.03	4	5.12	9	9.07
MTNL	2.76	4.19	0.5	0.37	0.63	-	0.53	0.77	1.15	-	1.1	0.9
Microwave Systems (‘000kms)	90	70	18	17.99	19.5	14	15	19.88	10	21.03	7.5	14.45
Optical Fibre System  (000 km)	140	270	22	23.82	35	31.77	40	63.27	100	55.35	126	99.02
VPT      (‘000 Nos.)	239.16	278.87	83	42.86	80.5	37.06	45	33.97	70	34.22	144	70.75

 

2.2       The performance of the private sector during the Ninth Plan has been a mixed one. While it did very well in the expansion of cellular network, the performance was not encouraging in the fixed line segment. Only about 5.9 lakh DELs have been installed against the target of 52 lakhs(original) and the revised target of 14.3 lakh. Constraints like licensing agreements, unrealistically higher licence fees, revenue share, right of way etc. have been basically responsible for the slow progress for the private sector.

 

2.3        For the Government sector, an outlay of Rs.46,442.04 crore was approved for the Ninth Plan to be financed basically from internal and extra budgetary resources (IEBR). This included a small budget support component of Rs.44.04 crore meant for financing the Plan outlay of regulatory bodies like TRAI and Wireless Monitoring Organisation (WMO) etc. The approved outlay for the Ninth Plan was only indicative in nature and the Annual Plan outlays were to be fixed on the basis of resources that might become available during the year. The operational outlay for the Ninth Plan on the basis of the Annual Plan outlays approved on a year to year basis works out to Rs.84,783.90 crore including a budget support of Rs.208.20 crore. As against this, plan expenditure is expected to be Rs.69,407.62 crore. This gives a utilisation of 163 per cent of the originally approved outlay and 89 per cent of the approved operational outlay. The shortfall in expenditure in comparison to the operational outlay was basically on account of lower expenditure by MTNL and BSNL due to delays in taking up some new projects and reduction in cost of equipment. On the financing side, the IEBR generation was lower than targeted (compared to operational outlay) basically on account of reduced requirement for market borrowings.The shortfall in internal resources generation by BSNL and MTNL could partly be attributed to tariff re-balancing.

 

3.     PRESENT STATUS OF TELECOM NETWORK

3.1     The basic telecom services network has expanded from about 84 thousand connections at the time of independence to about 385.95 lakh working connections as on March 31 2002. Basic services network constitutes the bulk of the phones accounting for about 86 per cent of the total telecom network. The main features of the present telecom network are given in the table given below:

 

4.      CHALLENGES FOR THE TENTH PLAN

4.1     With the introduction of competition in the market, the focus of planning needs to shift from the overall expansion of DELs and network to providing requisite policy framework for the sector/ market to grow as required and consistent with the overall policy objectives. In determining the appropriate policy initiatives and the relevant regulatory framework for this purpose, we need to bear certain factors in mind. The major factors/trends that merit consideration in this regard are given below:

 

4.2          Telecommunications is one of the fastest growing sectors in India. However, viewed in the context of global growth patterns and indicators, the sector is still in the early stages of development. Our tele-density was only 4.01 as compared to the global average of 32.78 (December, 2001) and 24.98 achieved by China. The comparative position of teledensity in a cross section of countries – both developed and developing – is given below.

 Telecom Development - International Comparison

( As on December, 2001)