A Modest Proposal

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2.1 Studies Related to Competition in Indian Telecom Service Sector: N.M. Shanthi (2005) throws light on the factors that contributed to the growth of telecom sectors. The studies various initiatives take by government in lien of liberalisation, privatisation and de-monopolisation initiatives. The trend is expected to continue in the segment as prices are falling as a result of competition in the segments. The beneficiaries of the competition are the consumers who are given a wide variety of services. Subhashish Gupta (2007) find out that the telecommunication in India is seen as a resounding success of the policy of liberalization. There is vigorous competition in cellular mobile services and this sector continues to grow at a rapid …show more content…

Besides lowering of prices, increased efficiency, greater innovation, highly tech industry better quality services are some of the reasons which are boosting competition amongst various telecom service providers. Arindham Mukherjee (March, 2006) takes out various case studies like Vodafone, Maxis, Telekopm Malaysia, Tatatele etc. to study the rising interest of foreigners for investment in Indian telecom industry. Various reasons of stemming growth can be rising subscriber base, rising teledensity, rising handset requirements, saturated telecom markets of other countries, stiff competition, requirement of huge capital, high growth curve on telecom, changing regulatory environment, conducive FDI limits in telecom sector. Business Standard (October 1, 2012) states that plagued by increasing competition, the telecom industry is adding more and more inactive subscriber, leading to saturation in the industry. Increasing price competition and aggressive customer acquisitions by the telecom operators could lead to saturation in the telecom industry, with the pace of subscriber addition not likely to be as strong as before, points out a recent report on the sector by rating agency ICRA. The active mobile phone subscribers base stood at 76 per cent of the total subscribers as on July …show more content…

In the provision of basic services for example, although more than 79 countries have allowed some competition in local service markets in 2001, only 46 countries had a second line operator to compete with the incumbent. Similarly, although over 81 per cent of countries claimed to allow competition in their cable TV markets last year, the real number of countries with effective competition is far fewer. Telecom watch (2011) states that the incumbent operators BSNL/MTNL enjoys a dominant position in wire line segment of telecom market with a market share of nearly 88%. The MTNL operates in Delhi & Mumbai and BSNL operates in the rest of the country. Both these organisations have been carved out of the government i.e. the department of telecom and historically enjoyed the privileges being a government department such as right of way, the strategically located land and buildings and other infrastructural facilities. These organisations enjoys dominant position in wire-line telephony and using this infrastructure including copper local loop in acquiring dominant position in internet service provisions specially in broadband segment. Thus in order to encourage competition in the telecom sector, it is necessary that the other

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