Ushering in a revolution in the telecommunications sector


In the early 1990s, while on a trip to Japan, then Telecommunications Minister Sukh Ram saw his Japanese driver carrying a cell phone in his pocket. On his return, when he told a public audience that one day they would all have a cell phone in their pockets, his opinion was met with skepticism as cell phones sounded like a far-fetched idea for an Indian consumer base who was largely agrarian without meaning affording the service at ₹16 a minute, in addition to buying expensive mobile handsets. Twenty-seven years later, as India celebrates its 75th Independence Day, the mobile phone revolution has had a profound impact on the country’s emergence as a global digital powerhouse.

how it started

It all started on July 31, 1995, with the first-ever phone call between former Sukh Ram and the then West Bengal Chief Minister, Jyoti Basu. Although there was a lot of excitement when the mobile phone was launched, the skeptics were initially right. The service was so expensive that only the wealthy could afford it. As a result, operators who had offered huge sums of money to acquire mobile phone licenses began to miss payments. The dream of providing mobile phones to all citizens had almost collapsed had it not been for the reforms announced by the Center in 1999 as part of the new telecommunications policy, where telecommunications operators were allowed to pay a license fee annual instead of upfront payments.

ANTI-WLL POWER: Cellular Industry Captains (L to R) Mr. Dilip Modi, CEO, Modi Telecom Group, Mr. Sunil Mittal, Group Chairman and CEO, Bharti Enterprises, Mr. Rajan Nanda, Chairman, Escotel Communications, Mr. Vinay Rai, Koshika Telecom, Mr. BK Modi, Chairman, Spice Communications, Mr. Ravi Rula and Mr. Prashant Rula, Essar Group, and Mr. Sanjeev Aga, CEO, Birla Tata AT

ANTI-WLL POWER: Cellular Industry Captains (L to R) Mr. Dilip Modi, CEO, Modi Telecom Group, Mr. Sunil Mittal, Group Chairman and CEO, Bharti Enterprises, Mr. Rajan Nanda, Chairman, Escotel Communications, Mr. Vinay Rai, Koshika Telecom, Mr. BK Modi, Chairman, Spice Communications, Mr. Ravi Rula and Mr. Prashant Rula, Essar Group, and Mr. Sanjeev Aga, CEO, Birla Tata AT

This laid the foundation for the proliferation of mobile phones in the country. With easier regulatory conditions, no less than 10 private companies entered the market, extending services beyond the four metros. But by 2003, the operators combined had only managed to reach 10 million users, as voice call rates were still high at ₹2 per minute. Then came the controversial launch of CDMA mobile services by Reliance Infocomm. Even though Reliance’s entry sparked a brutal legal war in the industry, the Monsoon Hungama rate plan launched by Reliance brought voice call rates down to just 40 paise per minute. This has forced incumbents, including Airtel, to lower prices.

Between 2003 and 2008, nearly 300 million new users were added. A number of overseas players, including Singapore Telecom, Hutchinson and AT&T, have become joint venture partners for existing players. Seeing the massive demand for telecommunications services, no fewer than 40 companies lined up to take on new cellular licenses. Eight new operators obtained licenses in 2008, which made the market hyper-competitive. Major global players, including NTT DoCoMo, Telenor and MTS, have invested in this booming market. Consumers became kings as voice call rates dropped to 1 paise per second with up to 8-10 players to choose from in each circle. But then the sector was hit with a double whammy.

A woman talking on her mobile phone walks past a Reliance Communications Ltd retail store. in Mumbai, India on Wednesday, January 29, 2014. India’s wireless spectrum license auction is scheduled for February 3. Photographer: Dhiraj Singh/Bloomberg | Photo credit: DHIRAJ SINGH

On the one hand, hyper-competition has ruined the finances of the industry as operators have begun to undercut each other on price; on the other hand, the allocation of new licenses in 2008 turned out to be a fraud, now known as the 2G scam. The Supreme Court struck down all new licenses, crippling the industry. Thousands of people have lost their jobs and billions of dollars invested in setting up new telecommunications networks have been cancelled. With the remaining operators struggling to stay afloat, there has been virtually no new investment made in network deployment, which has resulted in consumers being faced with patchy networks with frequent call dropouts. At the same time, operators in other countries had already switched from voice calls to data service using 4G technology.

Enter Jio

A mobile SIM card package for Jio Platforms Ltd.  at a store in Mumbai, India, Wednesday, Aug. 3, 2022. The South Asian nation has sold spectrum, including 5G waves, worth 1.5 trillion rupees ($19 billion) across several bands, India's telecommunications minister, Ashwini Vaishnaw, told reporters in New Delhi on Monday, confirming the government's forecast for record collection.  Photographer: Dhiraj Singh/Bloomberg

A mobile SIM card package for Jio Platforms Ltd. at a store in Mumbai, India, Wednesday, Aug. 3, 2022. The South Asian nation has sold spectrum, including 5G waves, worth 1.5 trillion rupees ($19 billion) across several bands, India’s telecommunications minister, Ashwini Vaishnaw, told reporters in New Delhi on Monday, confirming the government’s forecast for record collection. Photographer: Dhiraj Singh/Bloomberg | Photo credit: DHIRAJ SINGH

However, a massive boost came in 2016 when Reliance Jio launched its 4G services through a pan-India mega network offering free voice calls and cheap broadband services on mobile phones. Not wanting to be left behind, incumbents tapped into their reserves and invested in buying 4G spectrum. The affordability factor ensured that 4G services were adopted not only in urban centers but also in rural areas. Data consumption has skyrocketed from 1.25 GB per user per month in 2016 to 15 GB today. Telecommunications networks have become the center of our digital future. The global crisis due to the Covid virus has only re-emphasized the importance of the Internet and communication networks. Millions of people have been able to purchase essentials, conduct financial transactions and work from home solely through online platforms.

5G mobile signal communication mast (cell tower) Super fast data streaming concept.  3D illustration.

5G mobile signal communication mast (cell tower) Super fast data streaming concept. 3D illustration. | photo credit: solarseven

The recent 5G spectrum auction marks another turning point for the Indian telecom market. In addition to improving mobile broadband, 5G technology will enable the delivery of critical services such as telesurgery and the Internet of Things over a mobile network with unprecedented efficiency, in addition to opening the floodgates for innovative applications. which require a massive amount of broadband. bandwidth. There is no doubt that fifth-generation wireless technology will bring dramatic improvements to consumer broadband services and industrial applications, with the potential to radically alter societies through its impact on economic and social structures.

Published on

August 14, 2022

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