Government needs to assist the telecom sector to facilitate a smooth transition to 5G

Unfortunately, the revenue enthusiasm of the private entrants was belied, not least because tariffs for the new services were set at impossibly high levels. The Rs 156 per month rental and Rs 16.80 per peak minute tariffs encouraged subscription but not usage. Revenues did not materialise and besides, the incumbent public sector monopoly made life hard for the private sector entrants.

india telecom sector, telecom licence, telecom licence in india, Telegraph Act, Department of Telecommunication, 3g, 4g, 5g, reliance, airtel, vodafone, — Licences are now available on tap — anyone who wishes to offer telecom services can get one. (File)

In the years following the liberalisation of the telecom sector in India that began gingerly in 1994, the biggest barrier to private entry was a licence or the right to operate telecom services under the Telegraph Act. Licences were scarce since the government had limited their number in the same manner that licences were controlled pre-1991. So, when India allowed private players in telecom, potential investors showed extraordinary exuberance by committing huge sums of money to obtain a licence. And for several good reasons. Competition was limited to two private operators, telecom services were constrained everywhere in the country, and therefore, there was a huge addressable market.