History of Indian Telecom

The Republic of India possesses a diversified communications system that links all parts of the country by Internet, telephone, telegraph, radio, and television. Most of the telecommunications forms are as prevalent or as advanced as those in modern Western countries, and the system includes some of the most sophisticated technology in the world and constitutes a foundation for further development of a modern network. India has the world's second-largest mobile phone users, with over 919 million as of March 2012. It has the world's third-largest Internet users with over 121 million as of December 2011. India has become the world's most competitive and one of the fastest growing telecom markets.

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The industry is expected to reach a size of US $68.81 billion by 2012 at a growth rate of over 26 per cent and generate employment opportunities for about 10 million people during the same period. According to analysts, the sector would create direct employment for 2.8 million people and for 7 million indirectly. The total revenue of the Indian telecom sector grew by 7% to US $56.5 billion for 2010–11 financial year, while revenues from telecom equipment segment stood at US $23.35 billion.

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Telecommunications in the real sense means the transfer of information between two distant points in space. The popular meaning of telecom always involves electrical signals and as a result, people often exclude postal or any other raw telecommunication methods from its meaning. Therefore, the history of Indian telecom can be started with the introduction of telegraph.

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The Indian postal and telecom sectors saw a slow and uneasy start. In 1850, the first experimental electric telegraph line was started between Calcutta and Diamond Harbour. In 1851, it was opened for the use of the British East India Company. The Posts and Telegraphs department occupied a small corner of the Public Works Department at that time.

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Subsequently, the laying of 4000 miles of telegraph lines connecting Calcutta in the east and Peshawar in the north, along with Agra, Bombay in the west and Madras in the south, as well as Ooty and Bangalore was started in November 1853. Dr.William O'Shaughnessy, who pioneered the telegraph and telephone in India, belonged to the Public Works Department and worked towards the development of telecom throughout this period. A separate department was created in 1854 when telegraph facilities were opened to the public.

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In 1880, two telephone companies namely The Oriental Telephone Company Ltd. and The Anglo-Indian Telephone Company Ltd. approached the Government of India to establish telephone exchanges. The permission was refused on the grounds that the establishment of telephones was a Government monopoly and that the Government itself would undertake the work. In 1881, the Government later reversed its earlier decision and a licence was granted to the Oriental Telephone Company Limited of England for opening telephone exchanges at Calcutta, Bombay, Madras and Ahmedabad. On 28 January 1882, Major E. Baring, Member of the Governor General of India's Council, declared open the Telephone Exchanges at Calcutta. The exchange in Calcutta, named the "Central Exchange", was opened at third floor of the building at 7, Council House Street with a total of 93 subscribers. Later that year, Bombay also witnessed the opening of a telephone exchange.

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* Pre-1902 – Cable telegraph

* 1902 – First wireless telegraph station established between Sagar Islands and Sandheads.

* 1907 – First Central Battery of telephones introduced in Kanpur.

* 1913–1914 – First Automatic Exchange installed in Shimla.

* 1927 – Radio-telegraph system between the UK and India, with Imperial Wireless Chain beam stations at Khadki and Daund. Inaugurated by Lord Irwin on 23 July by exchanging greetings with King George V.

* 1933 – Radiotelephone system inaugurated between the UK and India.

* 1953 – 12 channel carrier system introduced.

* 1960 – First subscriber trunk dialing route commissioned between Lucknow and Kanpur.

* 1975 – First PCM system commissioned between Mumbai City and[[Andheri]] telephone exchanges.

* 1976 – First digital microwave junction.

* 1979 – First optical fibre system for local junction commissioned at Pune.

* 1980 – First satellite earth station for domestic communications established at Sikandarabad, Uttar Pradesh.

* 1983 – First Analog signal Stored Program Control exchange for trunk lines commissioned at Mumbai.

* 1984 – C-DOT established for indigenous development and production of digital exchanges.

* 1995 – First mobile telephone service started on non-commercial basis on 15 August 1995 in Delhi.

* 1995 – Internet Introduced in India starting with Mumbai, Delhi, Calcutta, Chennai and Pune on 15 August 1995.

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While all the major cities and towns in the country were linked with telephones during the British Raj, the total number of telephones in 1948 numbered only around 80,000. Post independence, growth remained slow because the telephone was seen more as a status symbol rather than being an instrument of utility. The number of telephones grew leisurely to 980,000 in 1971, 2.15 million in 1981 and 5.07 million in 1991, the year economic reforms were initiated in the country.While certain measures were taken to boost the telecom industry from time to time, (for example introduction of the telex service in Mumbai in 1953 and commissioning of the first Subscriber trunk dialing route between Delhi and Kanpur and between Lucknow and Kanpur in 1960), the first waves of change were set going by Sam Pitroda in the eighties. The real transformation in scenario came with the announcement of the National Telecom Policy in 1994.

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In 1975, the Department of Telecom (DoT) was separated from Indian Post & Telecommunication Department. DoT was responsible for telecom services in entire country until 1985 when Mahanagar Telephone Nigam Limited (MTNL) was carved out of DoT to run the telecom services of Delhi and Mumbai. In 1990s the telecom sector was opened up by the Government for private investment as a part of Liberalisation-Privatization-Globalization policy. Therefore, it became necessary to separate the Government's policy wing from its operations wing. The Government of India corporatised the operations wing of DoT on 1st October 2000 and named it as Bharat Sanchar Nigam Limited (BSNL). Subsequently, the market saw the entry of many national as well as multinational private operators.

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After 1995, the government set up TRAI which reduced the interference of Government in deciding tariffs and policy making. The DoT opposed this. The political powers changed in 1999 and the new government under the leadership of Atal Bihari Vajpayee was more pro-reforms and introduced better liberalisation policies. They split DoT in two parts - one policy maker and the other service provider, which was later renamed as BSNL. The proposal of raising the stake of foreign investors from 49% to 74% was rejected by the opposite political party and leftist thinkers. Domestic business groups wanted the government to privatise VSNL. Finally in April 2002, the government decided to cut its stake of 53% to 26% in VSNL and to throw it open for sale to private enterprises. TATA Group finally took a majority stake in VSNL and since then, has renamed it to Tata Communications Ltd. The government further reduced license fees for cell phone service providers and increased the allowable stake to 74% for foreign companies. Because of all these factors, the service fees finally reduced and the call costs were cut greatly enabling every common middle class family in India to afford a cell phone. Nearly 32 million handsets were sold in India. 

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By March 2008 the total GSM and CDMA mobile subscriber base in the country was 375 million, which represented a nearly 50% growth when compared with the previous year. India opted for the use of both the Global System for Mobile Communications (GSM) and Code division multiple access (CDMA) technologies in the mobile sector. The mobile tariffs in India have also become lowest in the world. For regulations, billing and service purposes, India has been divided into 22 telecom circles, which have been further categorized as Category A, B and C, depending upon the market potential and the total population. The circles are -

1. Andhra Pradesh (A)
2. Assam (C)
3. Bihar & Jharkhand (C)
4. Delhi (Metro)
5. Gujarat, Daman & Diu (A)
6. Haryana (B)
7. Himachal Pradesh (C)
8. Jammu and Kashmir (C)
9. Karnataka (A)
10. Kerala & Lakshadweep (B)
11. Kolkata (Metro)
12. Madhya Pradesh & Chhattisgarh (B)
13. Maharashtra & Goa (excluding Mumbai) (A)
14. Mumbai (Metro)
15. North Eastern States (Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, & Tripura) (C)
16. Orissa (C)
17. Punjab (B)
18. Rajasthan (B)
19. Tamil Nadu & Puducherry (A)
20. Uttar Pradesh - East (B)
21. Uttar Pradesh - West & Uttarakhand (B)
22. West Bengal (excluding Kolkata), Andaman & Nicobar Islands & Sikkim (B)

Source: Wikipedia