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The Impact of Policy and Regulatory Decisions on Telecom Growth in India

Government and Institutions

This paper analyzes the transition of the Indian telecom sector from a monopolistic to a competitive environment. Though similar transitions have occurred in other countries, India’s shift is particularly striking due to the short period within which changes occurred. The National Telecom Policy of 1994 and the New Telecom Policy of 1999 established a strong and independent regulatory mechanism with well-defined powers and responsibilities. This regulatory mechanism sustains a competitive environment in the services sector by establishing guidelines for service providers, monitoring compliance, and providing a framework for dispute settlement. Additional reforms clearly separated regulatory and adjudicatory functions and created a specialized tribunal, which operates independently of the regulator, to settle disputes.

Reforms have allowed the telecom sector to address a wide range of issues, including quality of service, protection of consumer interest, and the growth of telecom services in rural areas. In addition, both the regulatory mechanism and the tribunal are key factors in attracting investments and their success has sparked phenomenal growth in wireline and wireless telephones and value-added services. India must ensure it remains on the current path of reform so that the telecom sector and its customers can continue to benefit from new technologies.

361wp.pdf (2.88 MB)
Author(s)
R.U.S. Prasad
Publication Date
July, 2008