FDI in Telecom Sector and Its Regulatory Measures in India An Appraisal

Abstract

newline Telecommunication has been recognized world-over as an important tool for social and newlineeconomic development and prosperity of a nation and plays a phenomenal role in growth and newlinemodernisation of various sectors of the economy. Over the last few years, Indian telecom market has newlineshown overwhelming growth. Factors like regulatory liberalization, structural reform and competition newlineplayed a very important role in this rapid transformation. The fact is that India is one of the fastest newlinegrowing telecommunication markets in the world has acted as the primary driver for foreign and newlinedomestic telecommunication companies investing into the sector. It is also recognized as one of the newlinemost lucrative markets globally, resulting in massive investments being made in the sector both by the newlineprivate and government sector in the last decade. newlineThe Indian Telecom Sector, like most other infrastructure sectors is controlled by the state. The newlineDepartment of Telecommunications (DoT), reporting to the Ministry of Communications (MoC) is the newlinekey body for policy issues and regulation, apart from being a basic service provider to rest of country. newlineBy an act of Parliament, the Telecom Regulatory Authority of India (TRAI) was formed to be the newlineregulatory agency. One of the most significant contributors to India s booming economy is the newlinedevelopment of the focus of Foreign Direct Investment (FDI) in the Telecommunication sector. Over newlinethe last three decades the service sector and telecom, has expanded rapidly and has come to play an newlineincreasingly important role in national economies. India has achieved substantive improvements in newlinetelecommunications access since opening its telecommunications sector in the early 1990s. However, newlineIndia has realized fewer benefits than were possible during the period of market reform. The slow newlineimplementation pace of liberalization, disparity between urban and rural areas and unclear regulations newlinehave impeded the flow of investment to the telecommunications sector in comparison to other emerging newlinemarket economies