A study on the competitive analysis in the telecom sector

Technological changes in the telecom and computers have radically changed the business scenario. In turn, the new demands of business have spurred many telecom based technological innovations. In order to exploit these innovations for competing in global markets, business community the world over has been putting pressure on governments to revise the policy, regulation and structure of the telecom sector. Several countries across the world have responded by restructuring the state controlled telecom service provider, increasing private participation, and deregulating service provision. The emergent organizations have attempted to be more responsive to the business needs and have evolved mechanisms to remain competitive even under tremendous pressures.

Over the past several years, developing countries have also recognized the important role a responsive, business oriented and technologically advanced telecom sector plays in the growth of the economy. Many developing countries now accept the limitations of a monolith state monopoly in responding to the twin challenges of spurring internal growth and competing in an increasingly global economy.

Past experience of reform across many countries suggests that the fundamental underlying issue that must be addressed in telecom reform is introduction of competition for efficiency. Competition is considered to be an important factor than ownership in introducing efficiency.

India's 21.59 million-line telephone network is one of the largest in the world and the 3rd largest among emerging economies (after China and Republic of Korea). Given the low telephone penetration rate India offers vast scope for growth. It is therefore not surprising that India has one of the fastest growing telecommunication systems in the world with system size (total connections) growing at an average of more than 20 percent over the last 4 years.

The industry is considered as having the highest potential for investment in India. The growth is demand for telecom services in India is not limited to basic telephone services. India has witnessed rapid growth in cellular, radio paging, value-added services, internet and global mobile communication by satellite (GMPCS) services. This is expected to soar in the next few years.

Recognizing that the telecom sector is one of the prime movers of the economy, the Government's regulatory and policy initiatives have also been directed towards establishing a world class telecommunications infrastructure in India. The telecom sector in India therefore offers an ideal environment for investment.

The telecommunications initiative in the country is lead by Ministry of Communications through the Department of Telecommunication & Department telecom Services and its undertakings for provision of basic telephone services, national and international long distance communications, manufacture of complete range of telecom equipment, research and development and consultancy services. The telecom Commission performs the Executive and Policy making functions. The telecom Regulatory Authority of India performs the functions of an independent regulatory body.