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The telecom revolution is the biggest success story of ‘New India’. The sector has transformed drastically from the state monopoly, which lasted until 1995, to a vibrant competitive market today. Earlier, telephone was a precious commodity in India. There was a ten to fifteen year waiting period to get a telephone. Today, one can get connected in minutes. Such is the impact of the change in this sector which is roaring forward with the acquisition of most modern technology and know-how to connect India’s one billion plus population. At the same time, consistent regulatory developments and establishment of credible regulatory and dispute settlement bodies have created a level playing field for the participants. Most major international suppliers of equipment and technology have firmly established their presence. Currently, the sector is enjoying high growth with state of the art technology and wide consumer acceptance.

However, a lot had to happen in terms of regulatory changes and institution building. As a matter of fact, it was the timely market deregulation that paved the way for growth. The most notable one was the participation of private parties in the sector after the issuance of National Telecom Policy in 1994 in this regard. In 1997, the government established the Telecom Regulatory Authority of India (TRAI) to supervise competition, set terms and conditions of licenses and ensured compliance creating a level playing field for the players. Shortly after in 1999, the New Telecom Act opened up the national long distance calls to private sector operators and paved the way for higher teledensity. This also triggered fierce competition among the players. Naturally, many disputes arose among the operators who were keen to establish themselves as the prime service providers and test the ‘teeth’ of the law. The government set up the Telecom Dispute Settlement and Appellate Tribunal (TDSAT) who would play the role of an adjudicator to ensure benefits of an open, fair and competitive telecom sector. Since its establishment, TDSAT has resolved many contentious issues and positioned itself as a neutral credible body to its clients. Further deregulation in 2001 saw the opening up of the fixed line services to unrestricted competition. In 2003, the government allowed unification of basic and mobile licenses which allowed the operators to offer all types of services. The government is now considering increasing foreign direct investment from 49 to 74 percent to attract fresh capital flow in the sector.

Although a lot has happened in the telecom sector in the last ten years, the show is just beginning, for India has one of the lowest teledensities in the world with only 7 per hundred as compared to world average of 37 per hundred. However, the sector is growing at a rapid pace of 25 percent per annum. By 2008, teledensity is expected to reach 20 per hundred. India will have over 185 million subscribers by that time. Most of the growth will come from the mobile (wireless) sector. Rapid increase in the middleclass and low entry costs would make these projections achievable.

The sector also boasts many strong and tech-savvy operators such as Reliance Infocomm, Bharti Telecom, Tata Teleservices, Hutchison, Idea Cellular in the private sector and Bharat Sanchar Nigam Limited, Mahanagar Telecom Nigam Limited and Railtel in the public sector. These buyers are cash-rich and have easy access to international capital markets. Many of these operators belong to the multi billion dollar business houses and will spend billions of dollars in this sector. Niche opportunities with the smaller regional operators also exist. The match between Canada’s supply capacity and the need of the Indian operators is excellent. As does our country position; Export Development Canada (EDC) has a healthy appetite for financing Canadian supplies to India. EDC is also optimistic that collaboration between Canadian and Indian companies will grow even faster and more and more Canadian companies will participate in India’s rapidly unfolding telecom revolution.

 
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