India's Telecom Revolution

India 's telecom revolution began quietly, as a matter of fact very quietly, with a simple announcement that a new telecom policy will come into effect on April Fools Day in 2001. New policy was very simple. Any and all could get a free license to become a mobile phone operator. There was no upfront license fee but a revenue share of 7% was to be levied as the fee for spectrum used. This freed up the capital to be actually used to build the networks quickly.

There were no suggested rates or types of services that could be offered or any limitation of any type. No subsidies of any kind were offered. Operators were free to pursue what they thought they could sell profitably.

This policy came in to effect without any big debate or fanfare. on the date policy came in to effect India has 17 million land lines and one million mobile connections.

PM ABV had made up his mind. He trusted markets fully. No convoluted rules and regulations; just an independent market regulator TRAI with the mandate to insure free competition. By the end of the fiscal year, there were still one million land lines but there were now 80 million mobile connections. Three year later, Indian telecom revolution was in full bloom with almost 500 million mobile connections with India having the lowest cost and almost the best telecom network in the world. It had cost Indian treasury no money; as a matter of fact revenue share was producing a good income, to have this world class infra-structure.

UPA Government reversed the telecom policy of not selling licenses that set the stage for the subsequent 2G and 3G scandals.