Historical Background

Compared to several nations in the West, technology applied to communications is still a fairly recent development in India. However, it is advancing exponentially every year, leading to the growth of a more efficiently-run economy. Before determining how many people have had the means or will to keep up with the ever-changing technology, it is important to pay attention to some of the milestones that have helped shape Indian media and telecommunications today. Telecommunication is undoubtedly the foundation of the IT industry in India.

Soon after VSNL launched Internet services via dialup in 6 cities in August 1995, cybercafés were introduced in different parts of the country, the first opening in 1996 in Mumbai, the financial capital. In 1997, ICICI bank initiated online banking. This was also the year when the first job search engine, Naukri.com, was launched. In addition, Sabeer Bhatia’s Hotmail was sold to Microsoft for $400 million, making him the poster boy of India’s Internet age. In 1998, the government privatized Internet services, ending VSNL’s monopoly. Subsequently, Sify became the first Internet Service Provider (ISP). In the following year, Indiacom, another service provider, was sold to Sify for $115 million. As a result, the “e-marketplace” took off. In the same year, Webdunia, India’s first Hindi portal was founded. At the turn of the millennium, the government passed the IT ACT 2000, which authorized transactions carried out by electronic means, commonly referred to as “e-commerce.” Consequently, Bazee.com was established to model Ebay, Indya.com was instituted as part of an intense political campaign aimed at garnering the votes of the youth, and ITC, a well-established, nation-oriented corporation, introduced “E-Choupal” to take the Internet to small villages. Furthermore, foreign companies such as Yahoo and MSN ventured into the Indian market. 2000 also saw the commencement of online journalism. As the number of hackers began to rise in 2001, the dotcom bubble burst and numerous sites shut down. Between 2002 and 2003, new dotcoms with refined revenue models were set up. Indian Railways along with Air Deccan began online ticketing. In 2004, Ebay bought out Bazee.com. Moreover, the first Indian web IPO’s, IndiaBulls.com and IndiaInfoline.com, were inaugurated. By 2005, the Indian Railways accounted for 63% of “e-commerce” and ITC’s “E-Choupal” was serving 3.2 million farmers. Since 2006, the number of broadband users has been increasing, reaching 9.24 million in 2010. However, the broadband connection in India is still one of the slowest in the world. Nowadays, many people are switching to wireless broadband for fixed and mobile services.

The government introduced mobile technology in 1985, a decade before the Internet. When the demand for telephones increased in the 1990s, international organizations like the World Bank and ITO pressured the P.N. Rao administration to liberalize long distance services so as to break the monopoly of the state-owned Department of Telecommunications (DoT) and VSNL. In response, the government divided the country into 20 telecom circles for telephony and 18 for mobile services. It then opened bids to one private company per circle, which would share ownership with the DoT. For cellular service, two service providers were allowed per circle. The Telecom Regulatory Authority of India (TRAI) was established in 1995, which reduced government interference in deciding tariffs and policy making. Better liberalization policies were introduced by Prime Minister Atal Bihari Vajpayee in 1999, which permitted many foreign investors to enter the telecom market. In 2000, the government substantially reduced license fees for cellular service providers. Six year later, in 2006, the total mobile subscriber base reached 10.5 million. Today, in 2010, that number has risen to a whopping 617 million. India’s mobile telecommunications industry is currently the second largest in the world.

References:
http://www.amitranjan.com/2005/08/31/milestones-in-indias-internet-journey/
http://www.indianchild.com/telecommunications_in_india.htm