Connect-World is delighted to showcase India, a vast country with 75% of its population living in the countryside, which poses tremendous challenges in providing a telecoms infrastructure. This article looks at its telecoms revolution, starting from a historical perspective, and traces the growth of demand, the investment opportunities, the development of new industries to the plans for the future.
Overview of India India is a vast country almost the size of a subcontinent. It occupies a strategic position in Asia, looking across the seas to Arabia and Africa on the west and to Myanmar, Malaysia and the Indonesian Archipelago on the East. In many respects, India is a unique country. It is the largest democracy in the world. It has a population of over 900 million, which is divided into several races, religions, language groups, cultures and accounts for almost 1/6th of the humanity. About 75% of this population live in the countryside in over half a million villages. The land mass of India is 3,287,263 square kilometres. Fortunately, unlike some other countries of such large size, India possesses all the elements for economic growth. It is well endowed with natural resources. It has a democratic Government, with a well-established administrative set-up. It has managerial, organisational and technical ability in abundance. It also has a rapidly growing industry with financial and economic sophistication. Evolution of the Telecommunications Network The story of Indian telecommunications dates back to 1853 when a 33km long experimental telegraph line was erected linking Calcutta, the then capital of Imperial India, with Diamond Harbour, the anchorage of the East India Company. Telephone services, however, began in 1882 when small exchanges were opened in Calcutta, Bombay and Madras, and gradually extended to other areas. The progress though was not quite significant. At the time of independence in 1947, India had a very rudimentary telecommunication system comprising of about 300 telephone exchanges with an equipped capacity of 100,000 lines. Since then, the telecommunications sector has seen phenomenal growth. Status of Telecoms Services India today operates one of the largest telecommunication networks in Asia comprising of: Switching Networks with over 22,000 telephone exchanges; capacity for over 17 million telephone lines; 14.5 million direct exchange lines; 500,000 radio paging subscribers; cellular mobile service in 4 metro cities with 350,000 subscribers, and over 900,000 long distance switching lines (96% Digital). Transmission Networks form the other part of the network with 50,000 route kms of optical fibre systems, and 70% of the network is digital. About 7,700 cities and towns are connected to the National Subscriber Dialling (NSD) network and by 1997, it is planned to extend the facility to all automatic exchanges. To meet the low speed data communication needs of business/industrial units in remote and far-flung areas, a Business Message Network (RABMN) with a hub-station near Delhi, having a capacity of 1,000 subscribers has been commissioned. About 507 Very Small Aperture Terminals (VSAT) are deployed in this network for providing data service at speeds up to 9,600bps. A dedicated countrywide Packet Switched Public Data Network (PSPDN), with international access for computer communication services is available with speeds up to 64kbps and links at 2Mbps rate are also available. For providing international connectivity, a Gateway Packet Switching System (GPSS), is available which offers the capability of sophisticated telecommunication networking terminals and computers internationally. INSAT I/II series satellite systems are being used to provide over 4,000 two-way speed circuits through 140 earth stations across the length and breadth of the country, out of which, 88 are for public networks, 32 for captive network, 20 for transportable terminals and 20 are fly-away terminals. About 280,000 villages out of 604,000 are provided with a telecommunication facility. There are 1.6 telephones per 100 inhabitants and this figure is expected to become 4 by the year 2002. In addition, enhancement of capacity and digitalisation of the transmission network is being carried out with optical fibre, digital microwaves and satellite. Synchronous Digital Hierarchy (SOH) technology is being inducted in the optical fibre from 1997-98. This consists of STM-1, STM-4 and STM-16 equipment. Ten rings of 2.4Gb STM-16 network of about 21,000 route kms have already been planned to connect the 4 metro cities and the major cities in the country to achieve a highly reliable and high capacity backbone network for the information superhighway. It has been decided to introduce Wireless Local Loop in the major cities of India and a great emphasis is being laid on the research and development of sophisticated digital switching and transmission equipment to meet urban and rural needs. The Centre for Development of Telematics (C-DOT) has successfully designed a family of digital-SPC switching systems from small to large main automatic exchanges with up to 30,000 lines. Technology for several transmission products such as 10 channel UHF-600MHz, 2/8 and 8/34 Digital MUX, Satellite Based Rural Telegraph Network (SBRTN), Single Channel VHF and 2/8 Mbps OLTE has also been indigenously developed and offered to many countries in Africa and South-East Asia. The ultimate goal of our own research and development units is to lead to the development of an Integrated Services Digital Network (ISDN) and, eventually, to Broadband ISDN (B-ISDN) through SDH, Digital Access Cross Connect System (DACCS), Asynchronous Transport Module (ATM), etc. Growth of demand At the beginning of the 7th Five Year Plan (1985-90), the telephone connection waiting list for all of India was 0.81 million. By the end of the 7th Plan, this grew to 1.7 million even though 1.7 million new telephone connections were added during the 7th Plan. Over the last 4 years, however, the growth rate has been stepped up to over 20% per annum. During the 8th Five Year Plan (1992-97), 8.6 million new telephones were added. The pending registered demand is now 3 million and between 1997 and 1998, 3 million new telephones will be added. Despite the growth, the teledensity in India is 1.6 per hundred inhabitants, much less than in some other developing countries, and far below the world average. Studies conducted by the International Telecommunications Union, a UN body, have demonstrated a strong correlation between the growth of economy measured in terms of GDP and teledensity. Though the studies differ on the exact degree to which telecommunications contribute to economic development, virtually all agree that there is a close relationship. In fact, in countries where teledensity is low, the impact of providing more telephones on the growth of economy is found to be the highest. For the telecommunications sector in India to play its assigned role in the development of the national economy it will be necessary to increase the teledensity to at least 6 per 100 inhabitants. This will involve reaching a level of about 60 million telephone connections as quickly as possible from the present level of 14.5 million telephone connections. It has been estimated that this increase will require an investment of approximately US$50 billion at current prices at the rate of, say, US$1,000 per line. Investment Opportunities Basic Telephone Service The rapid acceleration of telecommunication services visualised in the National Telecommunications Policy requires supplementing the resources allocated to this sector in the coming years. The actual growth of the telephone is likely to be higher as the economy is expected to grow at a faster rate. Even with comparatively modest targets fixed, the resource requirement is quite high. Private investment and associations of the private sector would be needed in a big way to bridge the resource gap. With competing demand from other sectors of the economy, foreign investment would be required in the telecommunication sector. Taking this into consideration, the Government has permitted foreign equity participation of up to 49% in joint ventures for the provision of basic telephone services. Value Added Services In order to achieve standards comparable to the international facilities, the sub-sector of value added services was opened to private investment in July 1992. Some of the value added services in operation are: electronic mail, voice mail, 64kbps private data services, audio text service, video text service, video conferencing, radio trunking services, and radio paging cellular mobile telephone. With respect to Value Added Service (except radio paging and mobile telephony services), companies registered in India are permitted to operate under a licence on a non-exclusive basis. Any Indian registered company can submit its proposal for an operating licence for such services. 14 companies have been granted licences for operating radio paging services in 27 cities. At present there are about 500,000 subscribers. For other areas of the country comprising of 41 service areas in 19 territorial telecommunication circles, licence agreements have been signed for 28 service areas, LOI has been issued for 6 service areas and rebidding is to be done for the remaining 7 areas. Eight companies have been selected for the franchise of cellular mobile services in the 4 metro cities, namely Mumbai, Delhi, Calcutta and Chennai. This service has commenced in many circles. Manufacturing Sector The annual Indian switching market, which is estimated to increase from about 4 million lines to over 5 million lines between 1997 and 1998, represents one of the largest markets in the Asian region. Digital switching in India has witnessed a true metamorphosis since 1991, when a new industrial policy was announced by the Government. A number of foreign companies, attracted by DOT's liberalised procurement policies, have set up local production ventures in India. The opening of the Import Policy in 1992 has opened this largest market to international competition. The market for providing private networks is also growing very fast. Major international companies have already announced their plans for making an entry into this market. Rural Telecommunication Market in India India is a vast sub-continent with more than 75% of the population residing in rural areas with 604,734 villages spread over the length and breadth of the country. As of now, there are 3 telephones per 1,000 inhabitants in rural India compared to 16 telephones per 1,000 inhabitants in urban India. Out of nearly half a million villages in the country, only 280,000 have a telephone facility. Over 320,000 villages are still without a telephone facility. To cover such a large number of villages, the policy of the Government initially was to provide a public telephone within 5kms walking distance of any house. However, under the National Telecommunications Policy, one public telephone will be provided in each of these villages ( over half a million) by 1997. The present access system is expected to be upgraded taking into consideration the new technology to cover all the villages. Small digital electronic exchanges, which stand the rigour of the climatic conditions in India, have been developed and installed in the villages. Indigenously manufactured equipment like small-capacity microwave UHF systems have been used in the network for transmission purposes. A search for access technology has led to a radio based solution for such a purpose. At present, technology based on the analogue multi-access radio relay system has been found to be cost effective and successful in rural areas. Information Technology Industry This industry, which was non-existent a decade ago is worth more than US$2 billion today. Software worth US$1 billion was exported between 1996 and 1997 and is expected to cross the US$2 billion mark between 1997 and 1998. A third of the software exported is to the Western world (US-S8%, Europe-20%). The Indian information technology industry is highly competitive, with state-of-the-art expertise in developing software in the following areas: system development and conversion, support systems, decision support systems, design and implementation of information systems, financial control and accounting systems, telecommunications administration, production control and accounting systems, micro processor based systems etc. The convergence of telecommunication, computer, information and audio-visual services is going to have a profound effect on society, economy and business and tremendous opportunities will be opened for investment in these industries. It is expected that the telecommunications infrastructure in the near as well as distant future will provide an important platform for further progress in society and the economy. Investment inflow in all these sectors is expected to be quite significant and the emergence of multimedia is an important factor. The transportation of voice, data and video around the globe at high speeds clearly points to investment opportunities coupled with the growth of mobile communications in the near future. Telecommunications upgrades, modernisation and demand are going to provide the investment in the telecommunications market for developments like Future Public Land Mobile Telecommunications System (FPLMTS) and Universal Mobile Telecommunication System (UMTS). Plans for Information Infrastructure The information superhighway is planned to be an elaborate and intricate network of computers, cellular phones, interactive television, sophisticated hand-held computer-through fibre optic cables, wireless networks, satellite communication systems – linking people, institutions, universities and business organisations in distant parts of the globe. India has taken a step in this direction and systems of 622Mbps capacity have been introduced in the networks in large numbers and 2.5Gbps will be introduced in the network in the near future. This will provide the basic infrastructure for the provision of this information superhighway. An experimental ISDN service has been introduced in metro cities (Delhi, Bombay, Calcutta, Madras, Hyderabad and Bangalore) and the network provides end-to-end digital connectivity to support a wide range of voice and non-voice services which primarily help the business and institutional sectors. A pilot project using such ISDN facilities is 'Telemedicine'. The objective of the telemedicine service is to connect various hospitals and specialists located across the country. Use of the telemedicine service would permit access all over the country to health facilities and consequently ease certain health problems connected with cardiology, infectious diseases etc., particularly in the areas where medical facilities are inadequate. The information service of 2Mbps class is expected to be available in metro cities by 1997 and selected towns by 1998 through a frame relay service. This will provide services for video conferencing, still image, picture and highway resolution fax services and provide public information services in the form of voice, graphics, and video. Local Area Network (LAN) connectivity through ATM for 34Mbps and above is likely to be available on an experimental basis in 1998 in selected major cities. Conclusion With this, it is possible to provide multimedia information services, electronic libraries, museums etc as well as 'Telemedicine', and comprehensive traffic information services. This will provide a boost for telebanking and information retrieval from various data banks. Technology is changing very rapidly and, to keep up with this, considering the annual volume of traffic, the transmission network between various major cities is expected to carry several tens of Gbps beyond the year 2000.