The National Telecom Policy and Its Implementation

By T.H. CHOWDARY

Summary

This Forum of Free Enterprise booklet reproduces T.H. Chowdary’s talk, delivered on 24 June 1994 in Bombay under the joint auspices of the FFE and the Mumbai Grahak Panchayat, on India’s New Telecommunications Policy (NTP) announced on 13 May 1994. Chowdary, a former Chairman and Managing Director of Videsh Sanchar Nigam Ltd., welcomes the policy as a continuation of the de-monopolisation that began in the mid-1980s when telecom equipment and cable manufacture was opened to the private sector. He argues that just as equipment de-monopolisation drew large private investment and produced abundance, lower prices, and better quality, opening basic telephone services to private companies would yield similar benefits and finally end India’s chronic waiting lists.

Much of the talk is an indictment of the ‘evil results of the earlier monopolistic regime’: worsening telephone shortages (waitlists growing each Five-Year Plan, with a demand-supply gap of 25-40%), continuously rising prices while electronification lowered costs elsewhere, deteriorating service quality, failure to introduce new converged computer-telecom services, and a near-total failure of indigenous R&D that forced repeated technology imports. Against this record Chowdary builds a detailed reform agenda.

In the rendered pages he calls for a separate, independent Regulatory Body modelled on the Election Commission and on European Community practice of separating regulatory from service-provision functions, arguing that the Department of Telecommunications cannot fairly both compete and regulate. He advocates de-monopolising long-distance and intercity service (noting natural monopoly in trunk telephony became unsustainable after microwave, optical fibre and satellite cut capital costs), allowing licensees to provide every telecom and information service in their assigned area, favouring state-wide franchises for financial viability, and treating the existing Indian Telegraph Act 1885 as amendable rather than requiring an immediate new law. The rendered pages cover roughly the first 18 printed pages of a 24-page booklet.

Key points

• Reproduces T.H. Chowdary’s 24 June 1994 talk (FFE and Mumbai Grahak Panchayat) on India’s New Telecom Policy of 13 May 1994.

• Frames the NTP as extending the equipment-manufacture de-monopolisation that began in the mid-1980s.

• Cites equipment de-monopolisation as having drawn ~Rs 1000 crores private investment and produced abundance and lower prices.

• Catalogues the failures of the monopoly era: telephone shortages of 25-40%, rising prices, poor service, and failed R&D.

• Calls for an independent Regulatory Body separate from the DOT, modelled on the Election Commission and EC practice.

• Argues long-distance and intercity service should be de-monopolised since natural monopoly became unsustainable after fibre/satellite.

• Advocates state-wide franchises and licensing of every telecom/information service in an operator’s assigned area.

• Holds that the Indian Telegraph Act 1885 can be used/amended to implement the policy without an immediate new law.

Generated by the v1.5 extraction pipeline. Awaiting editorial review.