52 Pages Posted: 1 Mar 2012
Date Written: 2011
Telecommunication reforms in India saw very little privatization and much more of market liberalization accompanied with the introduction of new laws and regulations. Regulatory agencies and regulation have become integral components of the telecom reform process, in order to protect consumers, reassure investors and, in theory, help advance competition. In a country like India the role of the regulator is much beyond regulation of segments that are potentially monopolistic but its performance should also be measured in terms of its ability to foster competition. Studies have shown a close relationship between the nature of a regulatory regime and the investment behavior of the firms subject to that regime. Changes in regulation have often been followed by changes in investment behavior (Graeme Guthrie, 2006).
The results of liberalization have been impressive. Teledensity has increased from merely 2 percent or so in 1999 to around 61 percent in 2010 and almost 8-10 million mobile subscribers are added every month. Wireless has been the principal engine for telecom growth in the country. The wireless subscriber base has grown from 0.88 million in1999 to 687.71 million in 2010-11. Given that the mobile sector grew at the Compound Annual Growth Rate (CAGR) of 84 .01 percent in the last decade, the telecom subscriber base has already outstripped what was envisaged for the 11th Plan ending in 2102.
Keywords: sector performance review, India, telecom, telecom regulatory environment
Suggested Citation: Suggested Citation
By Roger Noll