CHAPTER VI

SUMMARY OF FINDINGS, SUGGESTIONS

AND CONCLUSION

6.1. Introduction
6.2 Findings
6.3 Suggestions
6.4 Conclusion
6.5 Scope for Further Research

CHAPTER I

INTRODUCTION AND DESIGN OF THE STUDY

1.1 INTRODUCTION

Telecommunication is one of the prime support services needed for rapid

growth and modernization of various sectors of the economy. The telecom

services have been recognized the world-over as an important tool for socio-

economic development of a nation. It has become need of the hour in the recent

years because of enormous and tremendous growth of information technology and

it has played a pivotal role for the development of the economy. The Telecom

Sector, which has the multiplier effect on the economy, has influenced the

economy by way of contributing to the increased efficiency. The Government

of India shows the importance of world class telecommunications

infrastructure and information as key to rapid socio, economic stride of the

country

Communication is a key factor for human development. The method that

individuals choose to communicate their message has an impact on the

effectiveness of those messages. It is essential to choose ideas effectively for

developing and sustaining relationships. The main purpose of every

communication is to solicit some useful results, that is, to secure an action by the

receiving end. Communication can aid in accelerating the growth of the economy

by transmitting information and simplifying motivation. Mobility is a fantastic

facility possessed by man that helps him to explore the places and thus provides a

way for his survival. This plays an vital role in the development of human

civilization and survival. Communication has been playing a pivotal role in one’s

life from time immemorial. Inventions like Radio, Television, Telephone and

computer made tremendous changes in the current world. Development in the

field of communication is at a galloping pace. Due to advanced technologies in

communication the world has shrunk in to global village.

Schman Wilbur has studied the relationship between communication and

development, pointed out that the task of mass media in information and

education is to ease the speeding up of social transformation required for

economic development and in particular to smoothen the task of mobilizing

human resource behind the national effort.1

The telecom services had now become a basic human need. To seek,

receive and impart information has been treated as a basic human right. In the

ages of information, telecom services have become essential device of human

development.2

Telecom had grown in India since two decades. Telecom services

available to people made death of distance regarding communication due to

network connectivity from country to country and region to region. 3

1.2 WORLD LEVEL TELECOMMUNICATION

1
Schman Wilbur, Mass Media and National Development, Stenford University
Press, Stenford, 1964, p.27.
2
Warbhuvan, S.S, Role of Telecom in Aurangabad :An Analysis,Southern
Economist, 1st June 2005, p. 21.
3
Frances Cairncross, Death of Distance, Great Britain, 2000.
 ‘Telecommunication’ word derived from Greek, and it means

“communication at distance’ through signals of varied nature coming from a

transmitter to a receiver. In order to achieve effective communication, the choice

of a proper mean of transport for the signal gesture has played (and still plays) a

fundamental role.4

It was shortly thereafter that The first experiments on more advanced

communication system begun. In 1809, Thomas S. Sommering proposed a

telegraphic system composed of a battery, 35 wires (one for each letter and

number) and a group of sensors made of gold, which were submerged in a water

tank: when a signal was passing from one of those wires, electrical current would

split water molecules, and small oxygen bubbles would be visible near that sensor.

Many other experiments were soon to follow: Wheatstone, Weber and Karl

Friedrich Gauss tried to further develop Sommering’s idea in a product that could

be mass-distributed, but their efforts were without success.

In the year 1843, Samuel Morse proposed a way to assign each letter and

number to a ternary code (point, line, and space). This way turned out to be

extremely convenient and more affordable than Sommering’s idea, especially in

terms of reduced circuitry (you wouldn’t need anymore a wire for each symbol).

Meanwhile, technology became advanced enough to find a way to convert those

signals in audible (or sometimes graphic) signals. The combination of these two

4
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factors quickly determined the success of Morse’s symbol code, which is used till

today.

The system was further developed and improved in the following years by

Hughes, Baudot, and Gray (1879), who theorized other possible codes (Gray’s

code has still applications today in the ICT industry and in barcodes technology).

However, the telegraph could still be used just by trained personal and in certain

buildings like offices, so it could only be used by a limited amount of people.

Research of the time therefore took another direction and aimed at producing a

machine that could transmit sounds, rather than just signals. The first big step in

this direction was the invention of transducers which could transform an acoustic

signal into an electric one and vice versa (microphone and receiver) with

acceptable information loss, in 1850.

Seven years later, Antonio Meucci and Graham Bell independently

managed to build a prototype of an early telephone (’sound at distance’) machine.

Since Meucci didn’t have the money to patent his invention (the cost was $250 at

the time), Bell managed to register it first.

Both with telegraphs and telephones, the need for a distributed and reliable

communication network soon became evident. Routing issues were first solved by

means of human operators and circuit commutation: the PSTN (Public Switched

Telephone Network) was born. However, this system didn’t guarantee the privacy
and secrecy of conversations, and efforts towards the development of an

automatic circuit commutation were made.

In 1899, Almon Strowger invented an electro-mechanic device simply

known as ’selector’, which was directed by the electrical signals coming from the

calling telephone device, achieved through selection based on geographical

prefixes.

Many other innovations were soon to come:

v In 1985, Guglielmo Marconi invented the ‘wireless telegraph’ (radio);

v In 1920, valve amplifiers made their first appearance;

v In 1923, the television was invented;

v In 1947, the invention of transistors gave birth to the field of electronics;

v In 1958, the first integrated circuit was built;

v In 1969, the first microprocessor was invented.

With the last step, electronics becomes ever than before a fundamental part

in the telecommunication world, at first in the transmission, and soon also in the

field of circuit commutation.

Moreover, in 1946 the invention of ENIAC (Electronic Numerical

Integrator And Computer) starts the era of informatics. Informatics and

telecommunications inevitably begun to interact, as it was to be expected: the first

made fast data processing possible, while thanks to second the data could then be

sent to a distant location.

The development of microelectronics and informatics radically

revolutionized techniques both in telecommunication networks and performance

requirements for the networks. Starting from 1938, an innovative technology

called PCM (Pulse Code Modulation) started to grow more and more popular.

This technology could achieve the digital transmission of a voice signal by

digitally encoding and decoding, rather than by means of transducers: however,

PCM was first used on a large scale only in 1962 in the United States.

During the mid Sixties Paul Baran, a RAND Corporation employee

working on communication problems concerning the US Air Force, first gave

birth to the concept of ‘packet switching network’ rather than the conventional

idea of circuit commutation network. According to this model, there should be no

hierarchy in the nodes of a network, but each node should rather be connected to

many others and be able to decide (and, in case of need, modify) the packet

routing. Each packet is a bulk of data which consist of two main parts, a ‘header’

containing routing information and a ‘body’ containing the actual data.

In this context Vincent Cerf, Bob Kahn and others developed, starting from

the 70s, the TCP/IP protocol suite, which made possible communication of

computers and heterogeneous machines through a series of physical and logical

layers. Packet switching network and TCP/IP were later chosen by the military

project ARPANET. The rest of the story is widely known: in 1983, ARPANET

became available to universities and research centers, among which NSFNET

(National Science Foundation + NET), which finally gave birth to the Internet.

In the latest years, the importance of the Internet has been constantly growing.

The high flexibility given by the TCP/IP suite and the ISO/OSI protocols provide

a strong foundation on which communication among devices of different kind —

be it a laptop or a cell phone, an iPod or a GPS navigator — has finally been made

simple and easy to achieve. 5

1.3 NATIONAL LEVEL COMMUNICATION

Well Postal means of communication was the only mean communication

until the year 1850. In 1850 experimental electric telegraph started for first time in

India between Calcutta (Kolkata) and Diamond Harbor (southern suburbs of

Kolkata, on the banks of the Hooghly River).6

In 1851, it was opened for the use of the British East India Company.

Subsequently, construction of telegraph started throughout India. A separate

department was opened to the public in 1854. Dr.William O’Shaughnessy, who

pioneered the telegraph and telephone in India, belonged to the Public Works

5
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6
Ibid.
Department, and worked towards the development of telecom. Calcutta or the-

then Kolkata was chosen as it was the capital of British India.

In early1881, Oriental Telephone Company Limited of England opened

telephone exchanges at Calcutta (Kolkata), Bombay (Mumbai), Madras (Chennai)

and Ahmedabad. On the 28th January 1882 the first formal telephone service was

established with a total of 93 subscribers.

From the year 1902 India drastically changes from cable telegraph to

wireless telegraph, radio telegraph, radio telephone, trunk dialing. Trunk dialing

used in India for more than a decade, where system allowed subscribers to dial

calls with operator assistance. Later moved to digital microwave, optical fiber,

satellite earth station. During British period all major cities and towns in India

were linked with telephones.

In the year 1975 Department of Telecom (DoT) was responsible for

telecom services in the entire country after separation from Indian Post &

Telecommunication. Decade later, Mahanagar Telephone Nigam Limited

(MTNL) was chipped out of DoT to run the telecom services of Delhi and

Mumbai.

In 1990s, the telecom sector was opened up by the Government for private

investment. In1995 TRAI (Telecom Regulatory Authority of India) was setup.

This reduced the interference of Government in deciding tariffs and policy

making. The Government of India corporatized the operations wing of DoT in

2000 and renamed Department of Telecom as Bharat Sanchar Nigam Limited

(BSNL).

In last 10 years many private operators especially foreign investors

successfully entered the high potential Indian telecom market. Globally acclaimed

operators like Telenor, NTT Docomo, Vodafone, Sistema, SingTel, Maxis,

Etisalat invested in India mobile operators.7

Wireless Communication

Pager Services

Pager communication successfully launched in India in the year 1995.

Pagers were looked upon as devices that offered the much needed mobility in

communication, especially for businesses. Motorola was a major player with

nearly 80 per cent of the market share. The other companies included Mobilink,

7
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Pagelink, BPL, Usha Martin telecom and Easy call. Pagers were generally worn

on the belt or carried in the pocket.

The business peaked in 1998 with the subscriber base reaching nearly

two million. However, the number dropped to less than 500,000 in 2002. The

pager companies in India were soon struggling to maintain their business. While

2-way pagers could have buffered the fall, the pager companies were not in a

position to upgrade their infrastructure to improve the ailing market. The Indian

Paging Services Association was unable to support the industry.

Pager companies in India also offered their services in regional languages

also. However, the end had begun already. By 2002, Motorola stopped making or

servicing pagers. When mobile phones were commercially launched in India, the

pager had many advantages to boast. Pagers were smaller, had a longer battery

life and were considerably cheaper. However, the mobile phones got better with

time and continuously upgraded themselves.

Mobile Communication

First mobile telephone service on non-commercial basis started in India on

48th Independence Day at country’s capital Delhi. The first cellular call was made

in India on July 31st, 1995 over Modi Telstra’s MobileNet GSM network of

Kolkata. Later mobile telephone services are divided into multiple zones known
as circles. Competition has caused prices to drop and calls across India are one of

the cheapest in the world.

Most of operator follows GSM mobile system operate under 900MHz

bandwidth few recent players started operating under 1800MHz bandwidth.

CDMA operators operate under 800Mhz band, they are first to introduce EVDO

based high speed wireless data services via USB dongle. In spite of this huge

growth Indian telecom sector is hit by severe spectrum crunch, corruption by

India Govt. officials and financial troubles.

In 2008, India entered the 3G arena with the launch of 3G enabled Mobile

and Data services by Government owned MTNL and BSNL. Later from

November 2010 private operator’s started to launch their services.

Broadband Communication

After US and Japan, India stands third that has the largest Internet users of

which 40% of Internet used via mobile phones. India ranks one of the lowest

providers of broadband speed as compared to countries such as Japan, India and

Norway. Minimum broadband speed of 256kbit/s but speed above 2Mbits is still

in a nascent stage.

Year 2007 had been declared as “Year of Broadband” in India. Telco’s

based on ADSL/VDSL in India generally have speeds up to 24Mbit max while

those based on newer Optical Fiber technology offer up to 100Mbits in some

plans Fiber-optic communication (FTTx). Broadband growth has been plagued by

many problems. Complicated tariff structure, metered billing, High charges for

right of way, Lack of domestic content, non implementation of Local-loop

unbundling have all resulted in the slow growth of broadband.

Many experts think future of broadband is in the hands of wireless factor.

BWA auction winners are expected to roll out LTE and WiMAX in India in 2012.

Next Generation Network (NGN)

Next Generation Networks, multiple access networks can connect

customers to a core network based on IP technology. These access networks

include fiber optics or coaxial cable networks connected to fixed locations or

customers connected through Wi-Fi as well as to 3G networks connected to

mobile users.

As a result, in the future, it would be impossible to identify whether the

next generation network is a fixed or mobile network and the wireless access

broadband would be used both for fixed and mobile services. It would then be

futile to differentiate between fixed and mobile networks both fixed and mobile

users will access services through a single core network. Cloud based called

“cloud computing” data services are expected to come.

Indian Satellites

India has launched 100 satellites of various types, since its first attempt in

1975. The organization responsible for Indian satellites is the Indian Space

Research Organization (ISRO). Most Satellites have been launched from various

vehicles, including American, Russian, European satellite-launch rockets, and the

U.S. Space Shuttle. First Indian satellite Aryabhata was launched on 19th April

1975, later Bhaskara, Rohini, INSAT, Edusat, IRS, GSAT, Kalpana, Cartosat,

IMS, Chandrayaan, ResourceSat, RiSat, AnuSat, etc.

India is the world’s fastest growing industry in terms of number of wireless

connections after China, with 811.59 million mobile phone subscribers.

According to the world telecommunications industry, India will have 1.200

billion mobile subscribers by 2013.8

1.4. GENERATION OF CELL PHONE TECHNOLOGY

The development of cell phone technology over the years can be studied

under four stages called generations.

1G : Cellular Networks

8
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 The main technological development that distinguished the First

Generation mobile phones from the previous generation was the use of multiple

cell sites, and the ability to transfer calls from one site to the next as the user

travelled between cells during conversation. The first commercially automated

cellular network (the 1G generation) was launched in Japan by NTT in 1979. The

initial launch network covered the full metropolitan area of Tokyo over 20 million

inhabitants with a cellular network of 23 base stations. Within five years, the NTT

network had been expanded to cover the whole population of Japan and became

the first nation-wide 1G network.9

The second launch of 1G networks was the simultaneous launch of the

Nordic Mobile Telephone (NMT) system in Denmark, Finland, Norway and

Sweden in 1981. NMT was the first mobile phone network featuring international

roaming.

Several countries were among the earliest to launch 1G networks in the

early 1980s including the UK, Mexico and Canada. The first 1G network

launched in the USA was Chicago based Ameritech in 1983 using the famous first

hand-held mobile phone Motorola DynaTAC. In 1984, Bell Labs developed

modern commercial cellular technology, which employed multiple, centrally

controlled base stations (cell sites), each providing service to a small area (a cell).

The cell sites would be set up such that cells partially overlapped. In a cellular

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system, a signal between a base station (cell site) and a terminal (phone) only

need to be strong enough to reach between the two, so the same channel can be

used simultaneously for separate conversation in different cells.

Cellular systems required several leaps of technology, including handover,

which allowed a conversation to continue as a mobile phone traveled from cell to

cell. This system included variable transmission power in both the base stations

and the telephones (controlled by the base stations), which allowed range and cell

size to vary. As the system expanded and neared the capacity, the ability to reduce

transmission power allowed new cells to be added, resulting in more, smaller cells

and thus more capacity. The evidence of this growth can still be seen in the many

older, tall cell site towers with no antennae on the upper parts of their towers.

These sites originally created large cells, and so had their antennae mounted a top

high towers; the towers were designed so that as the system expanded—and cell

sizes shrank—the antennae could be lowered on their original masts to reduce

range.

2G : Digital Networks

In the 1990s, the 'second generation' (2G) mobile phone systems emerged,

primarily using the GSM standard. These 2G phone systems differed from the

previous generation in their use of digital transmission instead of analog

transmission, and also by the introduction of advanced and fast phone-to-network

signaling. The rise in mobile phone usage as a result of 2G was explosive and this

era also saw the advent of prepaid mobile phones

In 1991 the first GSM network opened in Finland. In general the

frequencies used by 2G systems in Europe were higher than those in America,

though with some overlap. For example, the 900 MHz frequency range was used

for both 1G and 2G systems in Europe, so the 1G systems were rapidly closed

down to make space for the 2G systems. In America the IS-54 standard was

deployed in the same band as AMPS and displaced some of the existing analog

channels.

The second generation introduced a new variant to communication, as

SMS text messaging became possible, initially on GSM networks and eventually

on all digital networks. The first machine-generated SMS message was sent by

UK on 3 December 1992. The first person-to-person SMS text message was sent

in Finland during 1993. Soon SMS became the communication method of

preference for the youth. Today in many advanced markets the general public

prefers sending text messages replacing voice calls.

First trial payments using a mobile phone to pay for a Coca Cola vending

machine were set in Finland in 1998. The first commercial payments were mobile

parking trialled in Sweden but first commercially launched in Norway in 1999.

The first commercial payment system to take off banks and credit cards was

launched in the Philippines in 1999 simultaneously by mobile operators Globe

and Smart. The first content sold to mobile phones was the ringing tone, first

launched in 1998 in Finland. The first full internet service on mobile phones was

introduced by NTT DoCoMo in Japan in 1999.

3G : High Speed IP Data Networks

As the use of 2G phones became more widespread and people began to

utilise mobile phones in their daily lives, it became clear that demand for data

services (such as access to the internet) was growing. Furthermore, if the

experience from fixed broadband services was anything to go by, there would also

be a demand for ever greater data speeds. The 2G technology was nowhere near

up to the job, so the industry began to work on the next generation of technology

known as 3G. The main technological difference that distinguishes 3G technology

from 2G technology is the use of packet switching rather than circuit switching

for data transmission.

The first pre-commercial trial network with 3G was launched by NTT

DoCoMo in Japan in the Tokyo region in May 2001. NTT DoCoMo launched the

first commercial 3G network on October 1, 2001, using the WCDMA technology.

In 2002 the first 3G networks on the rival CDMA2000 1xEV-DO technology

were launched by SK Telecom and KTF in South Korea. By the end of 2002, the

second WCDMA network was launched in Japan by Vodafone KK . European

launche of 3G were in Italy and the UK by the Three/Hutchison group, on

WCDMA. 2003 saw a further 8 commercial launches of 3G, six more on

WCDMA and two more on the EV-DO standard.

The high connection speeds of 3G technology enabled a transformation in

the industry: for the first time, media streaming of radio and even television

content to 3G handsets became possible, with companies such as Real Networks

and Disney among the early pioneers in this type of offering.

In the mid 2000s an evolution of 3G technology begun to be implemented,

namely High-Speed Downlink Packet Access (HSDPA). It is an enhanced 3G

(third generation) mobile telephony communications protocol in the High-Speed

Packet Access (HSPA) family, also coined 3.5G, 3G+ or turbo 3G, which allows

networks based on Universal Mobile Telecommunications System (UMTS) to

have higher data transfer speeds and capacity. Current HSDPA deployments

support down-link speeds of 1.8, 3.6, 7.2 and 14.0 Mbit/s. Further speed increases

are available with HSPA+, which provides speeds of up to 42 Mbit/s downlink

and 84 Mbit/s with Release 9 of the 3GPP standards.

By the end of 2007 there were 295 Million subscribers on 3G networks

worldwide, which reflected 9% of the total worldwide subscriber base. About two

thirds of these were on the WCDMA standard and one third on the EV-DO

standard. The 3G telecoms services generated over 120 Billion dollars of revenues

during 2007 and at many markets the majority of new phones activated were 3G
phones. In Japan and South Korea the market no longer supplies phones of the

second generation.

4G : Growth of mobile broadband

Although mobile phones had long had the ability to access data networks

such as the Internet, it was not until the widespread availability of good quality

3G coverage in the mid 2000s that speed devices appeared to access the mobile

internet. The first such devices, known as "dongles", plugged directly into a

computer through the USB port. Another new class of device appeared

subsequently, the so-called "compact wireless router" such as the Novatel MiFi,

which makes 3G internet connectivity available to multiple computers

simultaneously over Wi-Fi, rather than just to a single computer via a USB plug-

in.

Such devices became especially popular for use with laptop computers due

to the added portability they bestow. Consequently, some computer manufacturers

started to embed the mobile data function directly into the laptop so a dongle or

MiFi wasn't needed. Instead, the SIM card could be inserted directly into the

device itself to access the mobile data services. Such 3G-capable laptops became

commonly known as "netbooks". Other types of data-aware devices followed in

the netbooks' footsteps. By the beginning of 2010, E-readers, such as the Amazon

Kindle and the Nook from Barnes & Noble, had already become available with
embedded wireless internet, and Apple Computerhad announced plans for

embedded wireless internet on its iPad tablet devices beginning that Fall.

These types of devices marked the need to consider to evolve towards the

fourth generation of the technology. By 2009, it had become clear that, at some

point, 3G networks would be overwhelmed by the growth of bandwidth-intensive

applications like streaming media. Consequently, the industry began looking to

data-optimized 4th-generation technologies, with the promise of speed

improvements up to 10-fold over existing 3G technologies. The first two

commercially available technologies billed as 4G were the WiMAX standard and

the LTE standard, first offered in Scandinavia by TeliaSonera.

One of the main ways in which 4G differed technologically from 3G was

in its elimination of circuit switching, instead employing an all-IP network. Thus,

4G ushered in a treatment of voice calls just like any other type of streaming

audio media, utilizing packet switching overinternet, LAN or WAN networks via

VoIP.10

1.5 ADMINISTRATION OF TELECOMMUNICATION

The Telecom Commission was set up in April 1989 and has the

administrative and financial powers of the Government of India to deal with the

various aspects of telecommunication. The commission and the Department of

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Telecommunication [DOT] are responsible, inter alia for policy formulation,

licensing, wireless spectrum management, administrative monitoring of the Public

Sector Undertakings (PSUs) engaged in telecommunication services, research and

development and standardization of equipment.11

The entry of private service providers brought with it the inevitable need

for independent regulation. The Telecom Regulatory Authority of India (TRAI)

was, thus, established with effect from 20th February 1997 by an Act of

Parliament, called the Telecom Regulatory Authority of India Act, 1997, to

regulate telecom services, including fixation/revision of tariffs for telecom

services which were earlier vested in the Central Government. TRAI's mission is

to create and nurture conditions for growth of telecommunications in the country

in a manner and at a pace which will enable India to play a leading role in

emerging global information society. One of the main objectives of TRAI is to

provide a fair and transparent policy environment which promotes a level playing

field and facilitates fair competition.

In pursuance of above objective, TRAI has issued from time to time a large

number of regulations, orders and directives to deal with issues coming before it

and provided the required direction to the evolution of Indian telecom market

11
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from a Government owned monopoly to a multi operator multi service open

competitive market.

The directions, orders and regulations issued cover a wide range of subjects

including tariff, interconnection and quality of service as well as governance of

the Authority.

The TRAI Act was amended by an ordinance, effective from 24 January

2000, establishing a Telecommunications Dispute Settlement and Appellate

Tribunal (TDSAT) to take over the adjudicatory and disputes functions from

TRAI. TDSAT was set up to adjudicate any dispute between a licensor and a

licensee, between two or more service providers, between a service provider and a

group of consumers, and to hear and dispose of appeals against any direction,

decision or order of TRAI.

1.6 GROWTH OF TELECOMMUNICATION

Indian telecom sector is more than 160 years old. In 1948, India had only

0.1 million telephone connections with a telephone density of about 0.02

telephones per hundred populations. By 30th September 2005, there were 113.39

million telephone connections in the country with a telephone density of 10.24

telephones per hundred populations.12

12
BSNL Audit Report No. 13 of 2009, p. VII.
 India operates one of the largest communication services in the world. It

occupies the ninth place in the world in terms of the number of cell phone

subscribers.

A regular, separate Telegraph Department was setup, under PWD in 1854

when telegraph facilities were thrown open to the public. In 1880, The Oriental

Telephone Company Limited and the approached the Government of India for

permission to establish telephone exchanges in India.

In 1883, the telephone service was merged with the postal system. The

next important year was 1905 when the control of the Telegraph Department was

transferred from the PWD to the Commerce and Industry Department.

In 1912, the Postal Department and the Telegraph Department were

amalgamated under a single Director General. Though the process was started in

1912, it is completed only in 1914.

In 1923, Indian Radio Telegraph (IRT) was formed. After independence,

the Government of India nationalized all the foreign telecommunication

companies to form the Posts, Telephone and Telegraph. It was a monopoly run by

the Ministry of Communication, Government of India.

Till 31st December 1984, the postal, telegraph and telephone services were

managed by the Department of Post and Telegraphs. In January 1985, two

separate Departments for the postal and telecommunications were established

under the Ministry of Communication, Government of India.

In 1986, DoT created two wholly government owned companies – The

Videsh Sanchar Nigam Limited (VSNL) for international telecommunications and

Mahanagar Telecom Nigam Limited (MTNL) for service in the metropolitan

cities of Delhi and Mumbai. Indian mobile communication industry was

liberalized in 1992. The entire country was divided into four metropolitan cities

(Delhi, Mumbai, Kolkata and Chennai) and three major circles. These circles

were in roughly analogous to the states of India and were divided into A, B and C

categories based on their perceived business potential. Tamil Nadu is included in

the ‘A’ circle which also includes Pondicherry but excludes Chennai.

The cellular licenses were awarded to the private sector first in

metropolitan cities in 1994 and then in the 19-telecom circles in 1995.

India's telecommunication system is highly developed. Indian telecom

industry underwent a high pace of market liberalization and growth since 1998.

India is served by an extensive system of automatic telephone exchanges

connected by modern networks of fiber-optic cable, coaxial cable, microwave

radio relay and is being served by one of the largest domestic satellite systems

(INSAT ) of the world. India possesses a diversified communication systems that

link all parts of the country by telephone, Internet, radio, television and
telegraph. The primary regulatory body of telecommunications in India is the

Telecom Regulatory Authority of India (TRAI ).

India has the world's second-largest mobile phone user base with over 919

million users as of March 2012. It has the world's third-largest Internet users with

over 121 million as of December 2011. In recent times India has become the

world's most competitive and one of the fastest growing telecom markets.

The industry is expected to reach a size of 344,921 crore (US$68.81

billion) by 2012 at a growth rate of over 26 per cent, and generate employment

opportunities for about 10 million people during the same period. According to

analysts, the sector would create direct employment for 2.8 million people and for

7 million indirectly. The total revenue of the Indian telecom sector grew by 7%

to 283,207 crore (US$56.5 billion) for 2010–11 financial year, while revenues

from telecom equipment segment stood at 117,039 crore (US$23.35 billion).13

Telecommunication is one of the prime support services needed for rapid

growth and modernization of various sectors of the economy. It has become

especially important in recent years because of enormous growth of information

Technology and its significant impact on the rest of the economy. The focus of

Tenth Plan has to be on the provision of world class telecommunication facilities

at reasonable rates. Provision of telecom services in rural areas would be another

13
en.wikipedia.org/wiki/communications_in_india.com.
thrust area to attain the goal of accelerated economic development and social

change. Although the telecom network has grown rapidly in recent years, is a

growth needs to be accelerated further in the Twelfth Plan.14 The tele-density

growth in India has been detailed in Table 1.1.

TABLE 1.1

14
The New Telecom Policy, 1999.
TELE DENSITY GROWTH IN INDIA

Growth in %
Sl.No Year Tele Density

1 2001-02 3.58 --

2 2002-03 4.28 19.55

3 2003-04 5.11 19.39

4 2004-05 7.02 37.38

5 2005-06 9.11 29.77

6 2006-07 12.74 39.85

7 2007-08 23.98 88.23

8 2008-09 34.25 42.83

9 2009-10 40.67 18.74

10 2010-11 52.74 29.68

Source: TRAI Study Paper No 2/2010-11, p.4.

In the year 2001-02, a telephone density of 3.58 telephones per hundred

populations have been increased to 52.74 telephones per hundred populations in

the year 2010-11. The percentage of growth was 19.55 per cent in the year

2002-03 and it was increased to 29.68 per cent in the year 2010-11.
 No.of Phones Per Hundred

0
10
20
30
40
50
60
2001-02

2002-03

2003-04

2004-05

2005-06
Figure 1.1

Year
2006-07
Tele Density Growth In India

2007-08

2008-09

2009-10

2010-11
1.7 REGULATORY AUTHORITIES

There are three bodies that control and regulate the Indian
telecommunication industry.

Department of Telecommunications

Department of telecommunications is one of the Government of India

Departments under the control of Ministry of Communications and Information

Technology. Department of telecommunications has its role in policy making,

licensing, research and development, training functions and co-operation matters

relating to telegraphs, telephone, wireless, facsimile and telematic services and

other like forms of communications. In addition, Department of

telecommunications is responsible for frequency management in the field of radio

communication in close co-ordination with international bodies.

In 1986, telecom operations for Delhi and Mumbai were moved out of

Department of telecommunications and given to MTNL, a public sector

corporation. Following that in October 1, 2000, the government created BSNL in

an effort to corporatize the remainder of DoT, empowering the new company to

venture in to areas like basic, cellular and internet services.

With the creation of TRAI in 1997, DoT surrendered its regulatory role,

although its policy making and licensing roles.

Telecom Regulatory Authority of India

Accordingly, in 1997, Telecom Regulatory Authority of India (TRAI) was

set up by Government of India under the TRAI Act, 1997. The creation of the

new regulatory agency was a significant event in establishing an institutional

framework capable of achieving the objectives of NTP 1994.

To achieve the objectives of the TRAI Act, TRAI was given power to issue

directions to service providers, make regulations, notify the rates at which

telecommunication services within India and outside India shall be provided under

this Act. Under Section 14 of the TRAI Act, the TRAI had full adjudicatory

powers to resolve disputes between service providers.

Some of the major recommendatory, regulatory and tariff setting functions

of TRAI are:

v Fixing the terms and conditions of license to a service provider

v Ensuring compliance of terms and conditions of license

v Effective management of spectrum

v Laying down the standards of quality of service to be provided by the

service providers and ensure the quality of service

v Recommendations on the need and timing for introduction of new service

provider
 It also conducts periodical survey of services provided by CSPs so as to

protect the interest of the consumers of telecommunication service.

Telecom Dispute Settlement and Appellate Tribunal

The TRAI Act, 1997 was amended by the TRAI (Amendment) Act, 2000.

By the TRAI (Amendment) Act, 2000 an Appellate Tribunal known as the

Telecom Disputes Settlement and Appellate Tribunal (TDSAT) had been set up

under Section 14 of the TRAI Act,1997 to adjudicate disputes and dispose of

appeals with a view to protect the interest of service providers and consumers of

telecom sector and to promote and ensure orderly growth of the telecom sector.

The Appellate Tribunal came into existence on May 29, 2000 and started hearing

cases from January ,2001.

The functions of the appellate tribunal are to adjudicate any dispute

between a licensor and licensee, between two or more service providers, between

a service provider and a group of consumers, and to hear and dispose of appeals

against any decision or order of TRAI.

Wireline Phone Service Providers in India

There are seven wireline phone service providers are operating in India.

Table 1.2 provides data about the operators regarding the wireline phone

connections.
 TABLE 1.2
NUMBER OF WIRELINE TELEPHONES IN INDIA DURING THE
YEAR 2010-11
Number of
SL.No. Service Providers Connections Percentage
in millions
1. BSNL 25.22 72.64
2. MTNL 3.46 9.97
3. Bharti 3.30 9.50
4. Reliance 1.23 3.54
5. Tata 1.28 3.69
6. HFCL 0.19 0.55
7. Sistema 0.04 0.12
Total 34.72 100.00
Source: Annual Report of TRAI, 2010-11.

It is inferred from the Table 1.2 that the majority of the telephone (wireline

connections) provided by the BSNL in India which constituted 72.64 per cent

during the year 2010-11. It is followed by the MTNL, Bharti, Tata, Reliance,

HFCL and Sistema.

 Figure 1.2
Number of Wireline Telephones in India during the year 2010-11

BSNL MTNL Bharti Reliance Tata HFCL Sistema

Wireless (Mobile) Phone Service Providers in India

There are fifteen wireless phone service providers are operating in India.

Table 1.3 provides data about the operators regarding the wireless phone

connections.

TABLE 1.3
NUMBER OF WIRELESS PHONES IN INDIA DURING
THE YEAR 2010-11
Number of
SL. No Service Providers Connections Percentage
in millions
1. Bharti 162.20 19.99
2. Reliance 135.72 16.72
3. Vodafone 134.57 16.58
4. BSNL 91.83 11.31
5. Tata 89.14 10.98
6. Idea / Spice 89.50 11.03
7. Aircel / Dishnet 54.84 6.76
8. MTNL 5.47 0.67
9. Loop 3.09 0.38
10. HFCL 1.47 0.18
11. Sistema 10.06 1.24
12. Unitech 22.79 2.81
13. S Tel 2.82 0.35
14. Videocon 7.11 0.88
15. Etisalat 0.97 0.12
Total 811.58 100.00
Source: Annual Report of TRAI, 2010-11.
 In Numbers

0
20
40
60
80
100
120
140
160
180
Bharti

Reliance

Vodafone

BSNL

Tata

Idea / Spice

Aircel / Dishnet

MTNL
Figure 1.3

Loop

Service Providers
HFCL

Sistema

Unitech
Number of Wireless Phones in India during the year 2010-11

S Tel

Videocon

Etisalat
 It is shown from Table 1.3 that nearly one-fifths of the mobile phone

(wireless) connections were provided by the Bharti in India during the year 2010-

11. It is followed by the Reliance, Vodafone, BSNL, Idea /Spice, Tata, Aircel,

Unitech, Sistema, Videocon, MTNL, Loop, S Tel, HFCL and and Etisalat.

1.8 MOBILE COMPANIES IN INDIA – AN OVERVIEW

Bharti Airtel

Airtel is the largest cell phone service provider in India with more than

152.5 million subscribers at the end of 2010. It is also the fifth largest telecom

operator in the world with more than 207.8 million subscribers across 19

countries.

BSNL

State-owned Bharat Sanchar Nigam Limited indicated a slump of 14% in

2010 revenue & ended up with a total of Rs. 30, 240 crore (Rs. 302.4 billion) as

earnings. As of June 30, 2010, BSNL had a customer base of 27.45 million

wireline and 72.69 million wireless subscribers.

Vodafone Essar

Vodafone Essar, the Indian subsidiary of Vodafone Group. is the second

largest mobile operator in terms of revenue, behind Airtel and third largest in

terms of customers, behind BSNL. Vodafone has more than 113.77 million
customers. Vodafone Essar has 67 percent stake in Vodafone Group and 33

percent in Essar Group. Though the company had a humble beginning, the

company has grown dramatically with better marketing, advertising and range of

services. Last year, in 2010; Vodafone recorded a profit of 13.7% and emerged as

the third largest telecom player with revenues exceeding Rs. 23, 200 crore (Rs.

232 billion).

Reliance

Anil Ambani’s now rebranded ‘Reliance’ or Rcomm is among the top 5

telecom companies in the world, in terms of customers in a single country. It has

more than 100 milion subscribers. Reliance reportedly showed a negative growth

in 2010 of 3.5 percent with a revenue of Rs. 22, 130 crore (Rs. 221.3 billion).

Idea Cellular

Idea Cellular is the third largest GSM company in India in terms of profit,

behind Airtel and Vodafone. Idea Cellular has also won the GSM Association

Award for "Best Billing and Customer Care Solution" for 2 consecutive years.

Led by. Headed by Kumar Mangalam Birla, Idea boasts of more than 67 million

subscribers with a pan-India presence. Idea Cellular is also the first cellular

service provider to offer General Packet Radio Service (GPRS) & Enhanced Data

rates for GSM Evolution (EDGE) in India.

Tata Teleservices

The company has 5 famous brands – Tata Indicom (CDMA services), Tata

DOCOMO (GSM services), Virgin Mobile (CDMA and GSM Mobile operator),

Tata Walky (for fixed wireless phones) and Tata Photon (for wireless mobile

broadband access). Tata Docomo is the fourth largest mobile operator in India, in

terms of wireless subscribers. It offers both prepaid and postpaid GSM cellular

phone services in 18 circles. By the end of 2010, Tata Docomo has grown rapidly

to end up with 32.82 million users.

Aircel

Aircel, a joint venture between n Maxis Communications of Malaysia and

Apollo Hospital Enterprise Ltd of India, is India’s fifth largest GSM mobile

service provider with a subscriber base of over 46.51 million, as of September 30,

2010. The service has grown rapidly especially among the youth. Aircel’s

strongest market is in Tamil Nadu, followed by Assam and North-Eastern

provinces.

MTNL

Mahanagar Telephone Nigam (MTNL), the state owned communications

service provider in Mumbai and Delhi, was a monopoly till 1992, after which the

telecom sector was flung open to private and foreign players. MTNL provides

fixed line telephones, cellular connection of both GSM — Dolphin(Postpaid) and

Trump (prepaid) and WLL (CDMA) — Garuda-FW And Garuda-Mobile and

internet services through dial-up and DSL-Broadband Internet. The service has

improved quite a lot from the early 90s when one had to wait for months to get a

phone connection; now you can get connection in a few hours. India’s first 3G

service was started under the name, MTNL 3G Jadoo and also launched India’s

first 3G enabled BlackBerry Bold smart phones. The subscriber base in Mumbai

and Delhi is 8.06 million and has more than 9, 00, 000 GSM mobile connections

on 2010

.
Loop Mobile

Loop Mobile (formerly known as BPL Mobile) is the oldest private

telecom service provider in India. BPL mobile was changed to Loop Mobile

because the brand-use agreement with the TPG Nambiar-owned BPL Group had

expired in 2009. It offers cell phone service, post-paid and prepaid in places like

Mumba, Madhya Pradesh, Assam, North-East, Kolkata,, Haryana, Orissa, Punjab,

Rajasthan. Loop hopes to start the latest NGIP (Next Generation Internet

Protocol) and EDGE (Enhanced Data rates for GSM Evolution) technology.

Uninor

Uninor is a brand new entrant in GSM mobile service in India. With an

employee strength of 2000, it started its services in 2009. Uninor is owned

67.25% by Norwegian telecom giant Telenor, and 32.75% by Unitech. The

company holds a pan-India UAS licence to provide telecommunications services

in each of India’s 22 circles.

Spice Telecom

Spice Telecom operates in two states, Karnataka and Punjab; ie the 2

circles of the telecom circles in India. Spice Communications Limited is a

subsidiary of Mumbai based Idea Cellular Ltd. (an Aditya Birla group company).

Idea Cellular owns more than 80% equity in Spice Communiations. Spice

Telecom has a customer base of more than 4.46 million subscribers in the two

circles on 2010-11. 15

1.9 PLAN OUTLAYS ON COMMUNICATIONS

Keeping in view the importance of the sector, an increasing provision of

outlays has been made in the successive plans. During the Tenth Plan and

Eleventh Plan, an outlay of Rs.98 millions and Rs.172 million were allocated for

the communication sector. The plan allocations have helped to develop and

expand the telecom infra-structure improving the tele-density in the country over

the period.16

15
www.mobilenumberportabilityindia.com/.
16
Report on Telecom Sector for the 11th five year plan, p. 8.
TABLE 1.4

PLAN OUT LAY IN THE FIVE YEAR PLANS

Sl.No. Five Year Growth rate in

Outlay in Crore
Plan Percentage
1. I Plan 47 -
2. II Plan 66 40
3. III Plan 164 148
4. IV Plan 415 153
5. V Plan 781 88
6. VI Plan 2722 249
7. VII Plan 8123 198
8. VIII Plan 25110 209
9. IX Plan 47280 88
10. X Plan 98968 109
11. XI Plan 172768 75
th
Source: Report on Telecom Sector for the 11 Five Year Plan, 2007-12, p. 10.

1.10 CONSUMERS’ ATTITUDE – AN OVERVIEW

Consumer analysis seeks to determine the underlying currents and cross

currents in the consumer’s minds. It focuses on the causes rather than the results

of effective marketing strategy and tactics employed by the firms that are

successful in the markets. The term consumer research represents the process and

tools used to study consumer attitude.

 Consumer attitude is “Observable activities chosen to maximize

satisfaction through the attainment of economic goods and services such as choice

of retail outlet, preference for particular brands and so on”17

The term customer attitude refers to “the actions of consumers in the

market place and the underlying motives for these actions. Marketers accept that

by understanding what causes consumers to buy particular goods and services

they will be able to determine which products are needed in the market place,

which are absolute and how best to present the goods to the consumer”. 18

Loundan and Della Bitta define consumer attitude as “the decision process

and physical activity individuals engage in evaluating, acquiring, using or

disposing of goods and services”. The term consumer attitude refers to “the

attitude that consumers display in searching for, purchasing using, evaluating and

disposing of products and services that they expect will satisfy their needs and the

study of how individuals make decisions to spend their available resources like

time, money, effort on consumption- relateds”.19

Consumer attitude is not just making a purchase decision or the act of

purchasing, it also includes the full range of experiences associated with using or

consuming products and services. It also includes the sense of pleasure and
17
The Dictionary of Marketing and Advertising. p.29.
18
Ostow.R., and Smith S.R., The Dictionary of Marketing, 1988, p.76.
19
Leon G. Sehiffman and Lesile Leaser Kannuk, Consumer Attitude, Prenctice
Hall of India 2007, p.3.
satisfaction derived from possessing or collecting “things”. The outputs of

consumption are changes in feelings, moods, or attitudes, reinforcement of

lifestyles, at enhanced sense of self; satisfaction of a consumer-related need;

belonging to groups; and expressing and entertaining; oneself. Consumer attitude

comprises of different roles taken by the consumers.

1. Personal factors

A buyer’s decisions are also influenced by personal characteristics such as

the buyer’s age and life-cycle stage, occupation, economic situations, life-style

and personality and self-concept.

Age

People change the goods and services they buy over their lifetime. Age is

a particularly useful demographic variable to distinguish segments and to discern

pattern of attitude. Individuals are classified into certain age groups. The age

grouping is often referred to as generation. The younger generation enjoys life

and have a life style that provides freedom and flexibility. The middle aged and

elderly consumers have their own life style and are to be targeted separately. The

old age consumers needs and wants differ from others.

Life cycle

Buying is also shaped by the stage of family life cycle the stages through

which families might pass as they mature over time. Marketers often define their

target markets in terms of life-cycle stage and develop appropriate products and

marketing plans for each stage. Traditional family life-cycle stages include

young singles and married couples with children. Now there is a growth in non

traditional stages such as couples marrying later in life, childless couples divorced

couples and single parents.

Reference groups

Many groups influence a person’s attitude. A person’s reference groups

consist of all the groups that have a direct or indirect influence on the person’s

attitudes or attitude. Groups having a direct influence on a person are called

membership groups. These are groups to which there is fairly continuous

interaction, such as family, friends, neighbours and co-workers. Primary groups

tend to be informal. A person also belongs to secondary groups, which tend to

be more formal and where there is less continuous interaction such as religions

and trade union groups. People are significantly exposed by their reference

groups. Reference groups expose an individual to new attitudes and lifestyles.

They also influence the person’s attitudes and self-concept because every one

normally desires to “fit in” and they create pressures for conformity that may
affect the person’s actual product and brand choices. The importance of

reference group influence varies among products and brands. Group influence is

strong for products that are visible to others whom the buyer respects.

Family

The impact of family on the formulation of values attitudes and purchasing

patterns in considerable. The family defines the purchase needs and also puts

financial strains within which the buying is to be done. The member of a family

assume specific roles in their everyday functioning such roles or tasks extend to

the realm of consumer purchase decisions. Key consumer-related roles of family

members include influencer, gatekeepers, deciders, buyers, preparers, users,

maintainers, and disposers. A family’s decision-making style often is influenced

by its lifestyle, roles and cultural factors.

Roles and Status

A person belongs to many groups namely family, clubs, organization and

the like, the person’s position in each group can be defined in terms of both role

and status. A role consists of the activities people are expected to perform

according to the persons around them. Each role will influence some of consumer

buying attitude. Each role carries a status reflecting the general esteem given to it

by society. People often choose products that shows their status in society.
4. Cultural factors

Cultural factors exert the broadest and deepest influence on consumer

attitude. The various cultural factors are culture, subculture and social class.

Culture

A.L. Korebar and T. Parsons defined culture as “A Complex of values

ideas attitudes and other meaningful symbols created by man to shape human

attitude and the artifacts of that attitude as they are transmitted from one

generation to the next”. Culture can be defined as the largest single grouping of

people showing a distinctly unique social heritage. In the context of consumer

attitude culture is defined as the sum total of learned beliefs, values and customs

that serve to regulate the consumer attitude of members of a particular society.

Beliefs and values are guides for consumer attitude while customs are usual and

accepted ways of behaving, cultural influences are pervasive that they are hard to

identify and analyse. Each group or society has a culture and cultural influences

on buying attitude may vary greatly from country to country.

Sub-culture

A subculture is a distinct cultural group that exists as an identifiable

segment within a larger, more complex society. Its members possess beliefs,

values and customs that set them apart from other members of the same society at

the same time, they hold to the dominant beliefs of the overall society, subculture
include nationalities, religions, racial groups and geographical regions; many

subcultures make up important market segment.

Social class

Almost every society has some form of social class structure. Social

classes are society’s relatively permanent and ordered divisions whose members

share similar values, interest and attitudes. Social class is measured as a

combination of occupation, incomes, education, wealth and other variables, social

classes show distinct product and brand preferences in areas such as clothing,

home furnishings, leisure activity and automobiles.

1.11 STATEMENT OF THE PROBLEM

Bharat Sanchar Nigam Limited (BSNL), formed in 2000, is the world’s

seventh largest telecommunication company. Its profit margins are comparable to

and, in some cases, better than India’s some Public Sector undertakings. The

entity provides a wide range of telecom services – wireless, Code Division

Multiple Access (CDMA), Mobile, Global System for Mobile Communication

(GSM), Internet, Broadband, Carrier services, Voice and Internet Protocol and

Intelligent Network Services. The company has taken the lead in providing

seamless connectivity across the world all networks for the benefit of its

customers. Also, by providing non-discriminatory interconnection, it enables

subscribers of other service providers to communicate with each other. This has
resulted in selective competition resulting in high growth and quality services at

low tariff. The company is in the process of adding sixty million lines and has

floated one of the largest global tender for this purpose.

BSNL has nation wide licenses for providing basic, long – distance, mobile

and Internet services. BSNL is the country’s number one Internet Service

Providers. The company is organized into 24 territorial circles and 19 non –

territorial circles covering the entire country. The territorial circles are further

divided into Secondary Switching Areas (SSA), which has the basic management

units of the company. The non – territorial circles, such as telecom stores, quality

assurance, training projects and maintenance, are responsible for specialized

activities.

The objectives set out by the Government were to accelerate business

development in line with recent global trends, to introduce appropriate autonomy

and flexibility in decision – making, to introduce a commercial culture with the

focus on service to customers, to build infrastructure and accelerate network

expansion through increased internal resources and tapping of capital markets,

and to meet universal service obligations. The company’s turn over coverage

reach and comprehensive range of services have resulted in a large consumer

base. Aiming to provide high customer satisfaction, BSNL has been paying

greater attention to this area by opening more and more customer service centers.
In its on-going endeavor to expand modes of bill payment options, several new

arrangements are in the advanced stage of implementation. They are, recharge of

excel prepaid cards through the automatic teller machines of all nationalized

banks, expansion of bill payment through Easy Bill Retail Outlets, payment

through internet and through credit cards or debit cards. Likewise, BSNL provides

many more services to the customers. The competitive bid also a were promoted

among the private telecom sector promoters. Hence, this study intends to analyse

the attitude of the subscribers towards the services provided by the BSNL in

Virudhunagar district.

1.12 OBJECTIVES OF THE STUDY

1. To study the profile, growth and sources of telecom department

2. To study the various BSNL product services offered by the Telecom

Department.

3. To assess the attitude of telecom subscribers towards BSNL services.

4. To analyse the attitude of mobile phone users towards BSNL services in

the select area.

5. To study the problems encountered by the respondents in availing

BSNL services.

6. To offer suggestions and suitable recommendations for improving the

telecom services.
1.13 HYPOTHESES

The following null hypothesis are:

1. There is no significant difference in opinion about the telephone services among

group of respondents based on age.

2. There is no significant difference in opinion about the telephone services among

group of respondents based on their gender.

3. There is no significant difference in opinion about the telephone services among

group of respondents based on their education.

4. There is no significant difference in opinion about the telephone services among

group of respondents based on their income level.

5. There is no significant difference in opinion about the telephone services among

group of respondents based on their occupation.

6. There is no significant difference between income level of the respondents

and their opinion about availing the area coverage of the BSNL.

7. There is no significant difference between income level of the respondents

and their opinion about the voice clarity of BSNL mobile.

8. There is no significant difference between income level of the respondents

and their opinion on the new connection of the BSNL mobile.

9. There is no significant difference between income level of the respondents

and their opinion on the network of BSNL mobile.

10. There is no significant difference between income level of the respondents

and their opinion on the call rate of BSNL mobile.

 11. There is no significant difference between income level of the respondents

and their opinion on the rental charges of BSNL mobile.

1.14 SCOPE OF THE STUDY

The study on telecom services is more relevant in the present context with

reference to the public. Therefore, researcher has focused attention to make the

study especially in the industrial based area like Virudhunagar district Telecom

Service are commonly used by the downtrodden to the affluent people hence

service rendered by the telecom department required to be studied. The value of

attention, dependence would through light to the customers as well as telecom

department staff for enlightening the customers and department at the most care.

With this avowed vision in the research is proceeded.

1.15 REVIEW OF RELATED LITERATURE

The value of any research study would much depend on a review of the

earlier literature related to that study. It would enlighten the researcher on the

various types of research dimensions and problems pertaining to the study. It

would help the researcher to frame the right type of objectives for the study with a

high level of research motivation. It would be most fitting to review some of the

studies that have already been made on the subject. Though voluminous literature

are available in these areas, only a few important related works are reviewed here.
Such a review would facilitate the researcher to have a comprehensive knowledge

on the concepts used in earlier studies and enable to adopt, modify and formulate

an improved conceptual framework, for the use of the present study and draw

meaningful conclusions.

Kulkarni has observed that underground cables formed an important part in

the telephone system. The investment in telephone cables varied between 35 to 50

per cent of the total exchange cost.20

Narayan and Prasad have observed that the late Prime Minister Rajiv

Gandhi recognized the significance of telecommunication as a basic infrastructure

for economic development. 21

Jitendra Kohli has pointed out that the telecommunication system in Japan

was changed from monopoly structure to competitive one and this liberalisation

had resulted in better telecommunication services at a lower cost. 22

Venkatram and Siddeswar have stated that as the nation was advancing in

various fields, the requirements are changing. There is a great demand for

20
Kulkarni,M.V “Forcasting of Telecom Cables”, Telecom News, New Delhi
November 1987.
21
Narayan,G.T. and Prasad,B. “National Mission on Telecommunications”,
Telecom News, New Delhi, March –April 1988, p.2
22
Jitendra Kohli, Japan’s Telecom Policy and its relevance to India”, Data Quest
Special issue, Cyber media India Limited, New Delhi, May 1989. p.15.
electronic exchanges and STD in rural areas. They were not satisfied with

telephones, capable of dialing within the village only.23

Rajiv kumar and Sahu have stated that introduction of digital technology

coupled with optical fibre cable had revolutionized telecommunication network

world wide. The overall reliability of network had improved vastly. 24

Srinivasa Raghavan and Vikram Chhachhu have stated that an important

reason as to why Indian telecom had not grown quickly enough was inadequate

financing.25

“Survey on Networking” in Business India, stated that cabling and

connectivity issues accounted for around 50 per cent of a network’s cost and

surprisingly, until recently there was only one way to connect a PC to the server

via a cable. The other option which was rather expensive, was wireless. The few

companies that had opted for this have done so mainly due to space constraints. 26

23
VenkatramM.C.and“Siddeswar K.R, Improvement of Rural Telecommunication
– A Holistic Solution”, Telecommunication, Vol.XI, Issue3. Jabalpur, June 1990, p.15.
24
Rajiv Kumar and A.K. Sahu, “Fiber in The Loop”, Telecommunications. Vol.
XIV, Issue 11, Jabalpur April 1994.
25
Srinivasa Raghavan,T.C.A. and Vikram Chhachuu, “All lines are Busy”.
Business World, Delhi 10-23, 1994 p.120.
26
“Survey on Networking”, Business India, July 29, August 11, 1996,p.31.
 Sundarapandian stated that providing the funds required to achieve the

Eighth Five Year Plan target in telecommunication was beyond the capacity of

Government fund and internal generation of resources. Private investments and

association of the private sector would be needful in a big way to bridge the

resource gap. He stressed the need for entry of private sector in

telecommunication. 27

Alhuwalia has observed that Very Small Aperture Terminal (VSAT) was

being widely used worldwide for fulfilling the communication needs of people

and the business community. They were extensively being used for providing

voice, data and video connectivity among large number of customers and wide

area networks. 28

Hariharan, in his study was offering state-of-art-voice and Data services.

FSPN, Internet and other value added services. Madurai Telecom’s aim was to

scale greater heights to user in an era of excellence to meet global standards of

communication.29

27
Sundarapandian,”A study on the impact of telecommunication media on
business,”Unpublished Thesis, Madurai Kamaraj University, Madurai, February 1997.
28
Ahluwalia,S.C “VSAT Communication service in ICU – band in India”,
Telecommunications, Vol, XIX, Issue IV, Jabalpur, August 1999.
29
Hariharan,S. “Madurai Telecom 75 Not out, Growing from strength to
strength”, Madurai Telecom Platinum Jubilee, 1924 – 1999, Souvenir, Madurai.
 According to Rajasekar, a wide variety of telecom services is provided by

the MTNL and much more is on the horizon. The overall impact of the new

telecom services is likely to be extremely high if the technology and regulation

could make them easily affordable. It is important to appreciate that the update of

available services and the development of new ones and strongly dependent on a

number of features such as affordability, quality of services, marketing literacy of

users and the mode of delivery of services 30.

According to Jeyalakshmi there has been a sharp expansion in the telecom

network, during the past decade, tele density is very low when compared to the

advanced countries and other developing countries like China, Malaysia and

Thailand. The demand and supply analysis at national level reveals that the

manifold increase in the size of the network. Still, DoT is not able to achieve the

NTP objectives of supply of telephone on demand due to wide resource gap. 31

According to Sridhar, Tamil Nadu Circle is one of the major units of

BSNL, it is serving the population of over 56 million people. Although the

number of active landlines has fallen marginally in the circle, it has been more

than made of by the rapid increase in mobile telephone services. The number of

30
Rajasekar, T. A Study of Telecom reforms in India with special reference to
the Mahanagar telephone Nigam Ltd, New Delhi, Unpublished Thesis Madurai
Kamaraj University, October 2000.
31
Jeyalakshmi. M., Development of Telecommunication since independence in
Tamil Nadu, Ph.D Thesis Madurai Kamaraj University, December 2002.
cellular connections in the circle has increased sharply from 1.6 lakhs in March

2003 to 5.87 lakhs in September 2004. 32

Kala Seetharam Sridhar and Varadharajan Sridhar33 pointed out that it has

been observed that telecommunication infrastructure development and economic

growth proceed together. While this relationship has been studied in the context of

developed (OECD) countries, in this study, we investigate this simultaneous

relationship between telecommunications and the economic growth, using data for

developing countries. Using 3SLS, we estimate a system of equations that

endogenize economic growth and telecom penetration (respectively production

function and demand for telecom services), along with supply

of telecom investment and growth in telecom penetration. We estimate this system

of equations separately for main telephone lines and cell phones. We find that

while traditional economic factors explain demand for main line phones, they do

not explain demand for cell phones. We also find significant impacts of

cellular services on national output, when we control for the effects of capital and

labour. The impact of telecom penetration on total output is, however,

32
Sridhar,V. Defending the people’s good, Vol: 21, issue 22, 2004, URL:
http://www.flonnet.com.
33
Kala Seetharam Sridhar and Varadharajan Sridhar, “Telecommunications
infrastructure and economic growth: Evidence from developing countries”, Working
Papers, No. 14, National Institute of Public Finance and Policy, 2004.
significantly lower for developing countries than that reported for OECD

countries, dispelling the convergence hypothesis.

G.V.Chalam34 deals with growth, working and types of services provided

by the Andhra Pradesh Telecom circle in macro environment with special

reference to Guntur district. In this context, an attempt is made to collect the

opinions of telecom users in Guntur district to assess the quality

of services rendered by the telecom department. The findings of the study reveal

that the expectations of the telecom users are high among the subscribers of recent

times because of their sense of time vs. money value and awareness of their rights.

Finally, the study concludes that almost 94% of the subscribers are satisfied with

the overall quality of services provided by the telecom department in Guntur

district. The basic motto of the telecom department is to provide

ultimate services to its customers against the present competition from the private

sector. In this direction, it is doing its best to acquire and retain its new and old

customers.

Pankaj Anup Toppo, has reported that service providers are resorting to

innovative methods to woo customers. Some offer a discount against any upfront

34
G.V.Chalam, “Quality of Services in Indian Telecom Sector: Users’ Perception
- An Assessment”, The IUP Journal of Managerial Economics, Vol. III, Issue 2, 2005,
pp. 77-93
annual commitment. Others like MTNL offer connections for less than Rs. 200

per month. BSNL is offering free upgrade to broadband for all dial up users. The

only condition, the scheme is applicable to BSNL land line user only. The focus

of service providers is to increase their customer base. Improving customer

services takes a back seat and unless the service standards are benchmarked with a

monitoring authority in place with penal provisions, there will be a gap between

claims and actual performance. 35

According to Ashok Das Gupta, the Center’s clearance for thinking the

ceiling of composite Foreign Direct Investment in the telecom sector to 74 percent

from the earlier cap of 49 percent. 36

Sinha has narrated that the cellular industry has been growing at an average

rate of 85 per cent per annum, which has advanced the achievement of Tele

density of 7 in March 2004 vis-à-vis as targeted in NTP 99 to be achieved by

2005.37

35
Pankaj Anup Toppo, “Making Haste Slowly”, Outlook Money, 15 December
2005,p.52.
36
Ashok Das Gupta, 74% FDI in Telecom, Yogana, New Delhi April 2005, p.45.
37
Sinha V.P. Mobile Telephony a Success Story, Bharat Sanchar Nigam
Limited, 2005, www.bsnl.co.in.
 Chennappa has pointed out in his study that the internal resources

generated by the Indian telephone companies are quite adequate to meet the needs

of the sector.38

Brahmadathan has stated that the BSNL Telecom provides a number of

add-on services like Data One Broadband which is high speed Internet on a

minimum of 256 kbps, SMS on land line, audio conferencing facility a new IN

platform and the like. They are going to provide a CLI instrument for the high

calling subscribers.39

According to Chennappa, the Indian telecom service sector is becoming

one of the fastest growing sectors in the world. As such India has become the fifth

largest network in the world in terms of number of telephones after China, USA,

Japan, and Germany, crossing more than 100 million telephone subscriptions by

April 13, 2005. The Government of India recently increased the limit on FDI in

telecom providers from 49 percent to 74 percent. The higher FDI has led to the

increase of urban tele density. Nonetheless, the liberalisation with foreign equity

(FDI) has led to the reduction of tariff significantly in mobile and long distance

service. 40

38
Chennappa, D. “FDI in Telecom in India: A Study”, Southern Economist,
September 15, 2005,p.29.
39
K.B. Brahmadathan, “In future there will be a lot of people using mobile
phones”, World Telecomunication Day, May 17, 2005, The Hindu.
40
Chennappa, D. “Role of FDI in Indian Telecom Industry”, Southern
Economist, June 15, 2005,p.15.
 Warbhuvan has defined the telecom services have now become a basic

human need. To seek receive and impart information has been treated as a basic

human right. In the age of information, Telecom services have become essential

device of human development. The role of telecom in socio-economy of

Aurangabad can be concluded point wise;

1. Telecom is a bridge the digital divide between haves and have nots.

2. Telecom is a tool for socio-transformation process in century.

3. ICE is a new emerging field to India for employments and entertainment.

4. I.C.T. is an engine to lead for sustainable development in new millennium.

5. Tele medicine a innovative system to lead to health facility provision

speedily.

Aurangabad region’s transformed itself tremendously due to the

availability of telecom services and the socio economic environment in the region

had improved beyond expectation . 41

The study of Revathi and Padmavathi in an attempt to analyse the

awareness of cellular service users, problem faced by the users and examine the

factors which influence the choice of cellular service provider. 42

41
Warbhuvan S.S. “Role of Telecom in Aurangabad: An Analysis”, Southern
Economist, June 1, 2005.,p.21.
42
Revathi,S. and Padmavathi, “Preference in Cellular Services Providers in the
post liberalization era”, Indian Journal of Marketing, February 2005,p.6.
 Riaz Ahamed says mobile wireless is growing popular all over the world.

The popularity of mobile voice service has been the dieseling factor for the

development of mobile networks so far. Data, mainly in the form of sms, has

basically been an extra service. The different mobile technologies available today

are the global system for mobile communication (GSM), time division multiple

access (TDMA) and the code division multiple access.43

Francis Sudhakar, Lydia Nutan in his study have defined the attitude of the

mobile telephone users migrating from prepaid to postpaid and vice versa. The

following is the attitudeal change in usage after migration.

1. 90 percent of the respondents are either more of reckless caller or more of a

careful caller.

2. Business men make more incoming as well as outgoing calls compared to

other respondents.

3. 88 percent of the respondents have increased their usage be it outgoing

calls or incoming calls or speaking longer.

43
Riaz Ahamed,S.S. “Wireless Communications; Growing Popularity due to
instant connectivity”, Industrial Herald, June 2005,p.49.
 4.
22 percent of the respondents claimed that the usage attitude has not

undergone any change. 44

Sadar, and Fulzele, have stated that consumers are dissatisfied with their

purchase about 25 percent of the time but that only about five percent complain.

The other 95 percent either feel complaining is not worth the effort, or they do not

know how to complain and whom to complain. Of the 5 percent who complain,

only about 50 percent report a satisfactory problem resolution. Yet the need to

resolve a customer problem in satisfactory manner is critical. On an average, a

satisfied customer tells three about a good product experience, but the average

dissatisfied customer gripes to 11 people. If each of them still tells other people,

the number of people exposed to bad word of mouth may grow exponentially. 45

Selvaraj and Ganesan Malathi have defined, communication is one of the

gifts of man. It acts as a repository of wisdom, a propeller for the advancement of

knowledge and a telescope to view the vision of the future. Communication is life

blood of business concept of communication. After the globalization of Indian

economy in 1991, the tele communication sector remained one of the most

happening sectors in India. The recent years witnesses rapid and dramatic changes

in the field of tele communication. By creating more awareness, better coverage,

44
Francis Sudhakar. K. and Lydia Nutan, “An Objective study of consumer
Attitude in BPL Mobile Cellular Ltd”, Indian Journal of Marketing, May 2005,p.10.
45
Sadar,S.B. and Fulzele,T.V. “Consumerism: Where does consumer see
himself?”, Indian Journal of Marketing, May 2005,p.15.
connectivity and new schemes the prospects for cellular service can be generated.

The researchers concluded that “a bird without wings can not fly like wise, a man

without cell can not dwell in future”. 46

Amit Singh Sisodiya and Anukar Gupta, explain the origin of wimax and

its operation. Wimax can be used by service providers to complement

technologies such as DSL. Wireless carries can use wimax to provide fixed

telecommunication services to businesses and residences using seamless mobility

applications to offer unified services and billing. Cable and DSL operations could

also use wimax to add mobility to fixed broadband service for additional revenue

opportunities. 47

Ashok Jhunjhunwala and Sangamitra Ramachandran, have explained, India

has become the fastest growing telecom market in the world, the distribution of

telephones within India is highly inequitable with rural tele density in 2004 being

below 1.5 percent as against 20.7 percent for urban areas. However, the

technologies for rural connectivity are now no longer a challenge. Department of

Telecommunication and many private telecom operators are making significant

contributions towards connecting rural India. Evolving technologies like

46
Selvaraj V.M. and Ganesan Malathi, “A Study on consumer Attitude towards
cell phone users in Tuthookudi City”, Indian Journal of Marketing, May 2005,p.23.
47
Amit Singh Sisodiya and Anukur Gupta, “Wimax Broadening Broadband”,
Chartered Financial Analyst, July 2006 ,p.58.
Broadband, DECT, OFDM and MIMO based technologies will improve rural

connectivity even more in the years to come.48

Namitha Jegadesh has pointed out that the metros have high degree of

awareness of mobile telephony; but small towns have less awareness of mobile

telephony. Mobile penetration is high in metros; but it is low in small towns. The

next round of cellular growth is coming from small towns and rural areas.

1,25,000 villages. Bharti aims to cover 4,000 towns by March 2006. 49

In the words of Anup Jayaram , in the case of broadband, the fall in tariffs

has happened much sooner than expected. Over the last year, the tariff for a

broadband connection that allows a monthly download of 400 MB has fallen from

Rs. 1,000 to between Rs. 250 and Rs. 400. Today it is possible to get a BSNL or

Bharti Airtel broadband connection at home user at low as Rs. 250 a month (plus

charges like modem rentals . That significantly, helped BSNL alone add a little

over 1 lakh new broadband subscribers in March 2006.50

Bhunia has explained the future communication aims at becoming all

wireless and mobile supporting any communication (voice, video, data, image,

48
Ashok Jhunjhunwala, Sanghamitra Ramachander, “Rural Telephone
Connectivity, No more a challenge now”, Kurukshetra, October 2006,p.43.
49
Namitha Jegadesh, “Connecting with small town India”, Business World, .23
January 2006,p.39.
50
Anup Jayaram, “Going broke for broadband”, Business World, 26, June
2006,p.40.
picture, and graphics) anywhere any time and anybody with a single unique

identification number (UTN, Universal Telecommunication Number) of a person

world over for all communications. 51.

According to Richa Sharma, the rapid technological strides in global

mobile telephony have changed interpersonal communication for ever. With this,

the various technologies that have come to the forefront internationally are Global

Systems for Mobile communication (GSM) and Code – Division Multiple Access

(CDMA). Mobile communication works on the cellular communication

techniques.52

Nandini Vaish has explained that when Internet Protocol Television

(IPTV) becomes available, it will add a fourth way of distributing television,

besides terrestrial, traditional to offer broadband. The difference is that telecom

and other new broadband wires are two-way, which means people can

communicate with the operator. 53

Sudharsan, in his study under the assumptions of certainty and uncertainty,

has revealed that in the case of urban subscribers, the options available in real

economic sense are very limited. The new tariff therefore gives limited options for

51
Bhunia, C.T. “MIMO Technology: Future Wireless”, Electronics for you,
January 2006,p.47.
52
Richa Sharma, “Which is better: CDMA or GSM?”, Electronics for you,
October 2006,p.36.
53
Nandini Vaish, “Coming Soon your new pay TV operators”, Business World,
June 2006.
the subscribers. One can envisage a situation where more than 80 per cent of the

subscribers, urban and rural, would opt for general making alternative package

meaningless. The study reveals that if the subscribers do not go for so many

options, it can be considered as a rational attitude. 54

Sumanjeet and Swaty Gandh have narrated Broadband – equipped nations

stand to benefit from improved access to health care, better education, more

efficient and convenient government, stream lined business process, and high

standard of living. This is especially true in the context of knowledge – based

economy like India. 55

Anu Saraf has defined the sharing of passive infrastructure would enable

the operators to roll out their networks into the more populated to roll out their

networks into the more populated semi urban and rural areas besides lowering the

cost. Reliance has a unified access service license which is a technology neutral

license but the main issue facing DoT is the availability of adequate spectrum. 56

Anup Jayaram has stated that after debating for nearly a year, the state –

owned Bharat Sanchar Nigam Limited, India’s third largest mobile service

provider with 16.06 million subscribers is planning to expand its GSM-based

54
Sudharsan, P.K. “Telecom Pricing in India; A study on Tariff packages and
calling options of BSNL”, The ICFAI Journal of Applied Economics, The ICFAI
University Press, March 2006,p.36.
55
Sumanjeet and Swaty Gandhi, “New broadband policy in India”, Third
Concept, August 2006,p.11.
56
Anu Saraf, “United Towers of Telecom”, Business India, July 30, 2006,p.88.
mobile network capacity by a whopping 63.5 million lines. For this it has floated

what is expected to be a Rs. 20, 000 crore tender, the single biggest order for

mobile network equipment anywhere in the world. BSNL will also have to ensure

that the supply of equipment is not delayed like the time it was rolling out its

CDMA network.57

According to Amit Singh Sisodiya and Sanghmitra Dhara, Reliance India

Mobile, the most potent competitor for Bharti, too is riding piggy back on

innovation to push its growth. The firm, owned by Anil Ambani, is well set to

launch mobile TV soon, allowing users to catch their favourite TV shows on

phone.58

Luca Chittaro observed that visualization can make a wide range of mobile

applications more intuitive and productive. The mobility context and technical

limitations such as small screen size make it impossible to simply past

visualization applications from desktop computers to mobile devices, but

researchers are starting to address these challenges. 59

57
Anup Jayaram, “Bharat Sanchar Nigam, India’s biggest telecom tender ever”,
Business World, April 10, 2006,p.12.
58
Amit Singh Sisodiya and Sanghamitra Dhara, “Bharti Airtel, On the move”,
Chartered Financial Analyst, November 2006.p.42.
59
Luca Chittaro, Visualizing Information on Mobile Devices, IEEE Computer
Society publication, March 2006, p. 40 .
 Sandeep Dikshit has stated that BSNL had to grapple with several

challenges. They are related not only to technology but to consumer preference.

The dominance of fixed line phones has ended and mobile phones today occupy a

greater market share than fixed line phones. From being an organisation that spent

the last two decades wiping out the waiting list for fixed line phones, BSNL today

has to revise its policy to clear the waiting list of prepaid cellular connectivity.60

Srivastava, Jatin Bhangde, Nirav Bhat, Kunal Gogri and Hemal Marfatia

explain in their study since the launch of the first cellular mobile service in

August 1995, the Indian cellular industry has not looked back. Despite several

hurdles in terms of policy and regulatory challenges, despite being on the verge of

bankruptcy in 1998, the industry has maintained its vigorous growth. In the

research, the price plays an important role in growing or emerging market like that

in the telecom sector. 61

Anup Jayaram has stated that the Chennai based mobile operator Aircel

launched its broadband wireless access on wi-max (World wide Interoperability

for Microwave Access). By December 2007, it will cover 44 cities. Using wimax,

60
Sandeep Dikshit, “Switch to Success”, Frontline, July 28, 2006,p.24.
61
Srivastava R. Jatin Bhangde, Nirav Bhatt, Kunal Gogri and Hemal Marfatia,
“Role of Competition in Growing Market: Telecom Sector”, Indian Journal of
Marketing, September 2006,p.8.
an Aircel subscriber can connect to the Internet without wires, sitting at home or

office. 62

Arumugasamy has refered to the Indian telecom services as it is becoming

one of the fastest growing sectors in the world. The Indian telecom sector

registered the world’s highest growth rate. It is expected to cross 250 million

projects during the year 2007. 63

In the words of Ryan Rodgrigues, the Department of Telecommunication,

for instance had an “ambitious” teledensity target of 9.9 percent to touch by

March 2007. The latest information from Bharti Mittal is the teledensity already

touched is 18.4 percent. The industry had a target of no more than 200 million

mobile customers by 2010. This has been reset to a whopping 400 million

customers by 2010. A critical hurdle to the growth of broadband in the country is

last mile infrastructure. It is belongs to the state owned BSNL. 64

Ankit Rastogi has defined that the telecom services sector has been

growing by leaps and bounds on higher volume growth and expansion of network

coverage by the wireless companies. This has not gone unnoticed by the markets.

The market capitalization of the telecom services sector has increased by 92.8 per

62
Anup Jayaram, “The Coming Battle, Wimax’s entry could queer the pitch for
3G in mobile broadband”, Business World, 27 April 2007,p.86.
63
Arumugasamy, S. “Growth of Telecom Services in India”, Facts for you,
February 2007,p.45.
64
Ryan Rodgrigues, “The telecom in India has taken off Roll Call”, Business
India, May 6, 2007,p.49.
cent over one year till 30 March 2007 against just a 15.6per cent increase in the
65
BSE 30 share sensex over the period.

According to Shashikumar Sharma and Chaubey, the fast changing

information system and high-tech technological products have affected the

business activities of the country. The telecommunication services in India have

witnessed a phenomenal change over the last few years. The mobile services

sector of India has increased substantially. Taking the huge consumer demand into

consideration, many big players like Reliance, Hutch, Airtel, BSNL and such

others have launched their product in the market.66

. According to Nilabh Jha, wireless and wire line are not competing. Wire

line will act as the backbone whereas wireless will provide the last mile

connectivity. Both wireless and wire line will co-exist. It is widely believed that

with bandwidth hungry technologies like IPTU coming up it won’t be possible for

the wireless only to meet the bandwidth requirement of the future.67

According to Gyana Ranjan Swain, among the fastest growing sectors in

the country, telecom has been zooming up the growth curve at a fiery pace. India

65
Ankit Rastogi, “Telecom Services”, Capital Market, April 2007, p.5.
66
Shashi Kumar Sharma L. and Chaubey. D.S., “Consumer Attitude towards
mobile service providers: An Empirical Study”, The ICFAI Journal of Marketing
Management, Vol. VI, No. 1. 2007,p.41.
67
Nilabh Jha, “Filling the Gap”, Voice and Data, Vol 14, Issue 2, A cyber media
publication, August 2007, p. 42.
offers an unprecedented opportunity for telecom service operators, distributors,

retailers and associated service companies. Not to be left behind Indian Cellular

operators have lined up investment of about $20 billion over the next two years to

bring over 80 per cent of the population under mobile coverages. 68

Baburajan stated that the reliance have achieved tremendous growth, the

main challenge for Reliance communications is to improve quality of service and

ARPU. Its enterprise business is also not in a position to compete with the global

majors. Stock market valuations may boost the fortunes of an entrepreneur but

Ambani needs to address the issues faced by the growing mobile customer base,

especially in India, where bureaucracy takes pride in checking the business man. 69

According to Baburajan, BSNL wanted to solve three issues of its

subscribers; registration; renewals and multiple bills. Challenge was to provide a

billing solution that could converge the innovative Net one offer with BSNL’s

legacy telecom systems and scale millions of users; subscribers received a single

bill for both their voice and Internet usage at the end of BSNL’s billing cycle. It is

the only Internet service in the country which allows BSNL’s telephone

68
Gyana Ranjan Swain, “The Middlemen”, Voice and Data, August 2007, p.52.
69
Baburajan. K. “Born to Win”, Voice and Data, The Business of
Communication, , A Cyber media Publication, Haryana, August 2007,p55.
subscribers to access Internet services without formal process of registration and

renewals.70

According to Jason Schneider, today, most mobile phone user readily

access internet provided services from their handsets. But this mobile web

revolution has had a slow start, largely due to such problems as unstable handsets,

limited content, low bandwidth, and high cost to the end user. 71

Christopher Garbacz and Herbert G. Thompson72 stated that the living

standards and economic growth in developing countries are invariably linked to

the availability and use of telecom services. Effective policy decisions require the

best estimates of the drivers of these services. In this paper, telecommunications

demand is estimated in models for residential mainline and mobile telephone

service for developing countries for the period 1996-2003. The paper tests for

cross-price effects between mainline and mobile service and its findings have

important policy implications. It finds residential monthly price elasticity to be

insignificant for developing countries, but the connection elasticity is larger than

70
Baburajan. K., “Multiple Bills”, Voice and Data, A cyber media publication,
August 2007, p. 88.
71
Jason Schneider, “Mobile Web Surfing is the same as web surfing”,
Communication of the ACM, ACM publication, March 2007, p.42.
72
Christopher Garbacz and Herbert G. Thompson, ““Demand for
telecommunication services in developing countries”, Telecommunications Policy, Vol.
31, Issue 5, 2007, pp. 276-289
generally found in the literature. Mobile monthly price elasticities are very large.

A new and important empirical finding is that although wireline phones are

substitutes in the mobile market, the contrary is not true--mobile phones are not

substitutes in the wireline market, and in fact may be considered complements.

This lack of symmetry has important implications for properly

defining telecom markets. Universal service subsidies and competitive market

initiatives should be reevaluated in light of the paper's elasticity estimates.

Increased competition, income growth and enhanced education may be the

ultimate universal service promoters.

Sunil Mani73 stated that a distinguishing aspect of the growth performance

is that India now has five mobile phones for every one fixed telephone and the

monthly additions to mobile subscribers are well over six million. Such a huge

growth in telecom services have a number of spillover effects for rest of the

economy and one of the more important effects is its potential to create a major

manufacturing hub in the country for the manufacture of telecom equipments and

indeed for downstream industries such as semiconductor devices that are required

for the manufacture of these equipments. The telecom industry in India is thus

73
Sunil Mani, “The Growth Performance Of India’s Telecommunications
Services Industry, 1991-2006. Can It Lead To The Emergence of a Domestic
Manufacturing Hub?” Working Papers from eSocialSciences, 2007.
slowly emerging as a fine example of the service sector acting as a fillip to the

growth of the manufacturing sector. [Working paper 390].

Muttur Ranganathan Narayana74 estimates the contribution of

telecommunication (ortelecom) services to aggregate economic growth in India.

Estimated contribution is distinguished between public and private sectors to

highlight the impact oftelecom privatization on economic growth. Knowledge of

policy determinants of demand of telecom services is shown to be essential to

enhance growth contribution of telecom services. Using a recent sample survey

data from Karnataka State in South India, price and income determinants of

demand for telecom services are estimated by capacity of telephone exchanges

Estimation results offer evidence for significant negative own price elasticity and

positive income elasticity of demand for telecom services. In addition, survey data

are used to show for non-economic factors that influence demand

for telecom servicesincluding non-awareness of the usage and cost of value

added services. These results have implications for design of a national policy for

promotion of demand for telecom services and economic growth.

74
Muttur Ranganathan Narayana, “Telecommunication Services and
Economic Growth: Evidence from India”, http://www.cirje.e.u-
tokyo.ac.jp/research/dp/2008/2008 cf545.pdf(application/pdf)
 Rekha Jain and G. Raghuram75 stated that despite the tremendous growth

of mobile services in most developing countries, these have largely remained

limited to urban areas. This has further aggravated the existing urban and rural

divide. Policy makers and regulators perceive the need for an effective regulatory

and policy environment to reduce the gap, as there are several market challenges

in this endeavor, including low commercial viability. However, most such

interventions have had little success. This paper outlines India.s experience of

increasing rural teledensity, including its recent policy initiative to increase

penetration through creation of a Universal Service Obligation Fund (USOF) that

supported a variety of innovative initiatives. USOF.s most ambitious program to

date had been the design and deployment of mobile services in rural areas. This

paper analyses the outcomes of various programs, especially those of the mobile

service provision component of USOF. Despite the innovative design of the

USOF program, it had little impact on increasing rural teledensity. On the other

hand, positive policy steps that reduced the costs for service provision (revenue

shares, duties, ADC) and competition facilitated greater rural penetration. This

raises the issue of role of government vis-à-vis private sector in increasing rural

teledensities. The lack of accountability arising from the relationship between the

government owned incumbent and the USOF administrator and proper evaluation

75
Rekha Jain and G. Raghuram, “Role of Universal Service Obligation Fund in
Rural Telecom Services: Lessons from the Indian Experience”, IIMA Working
Papers from Indian Institute of Management Ahmedabad, Research and Publication
Department, No WP 06-03, 2009.
of USOF, the non-ring fencing of the fund and poor quality project management

contributed to the low impact. Non-involvement of private operators at an early

stage, inability to suitably enforce any penalties for violation of contracts, and

non-existent review and feedback mechanism have not allowed USOF to leverage

the benefits of an early start. In Peru, strict penalties in non implementation of

contracts led to more timely schedules (Cannock, 2001). Since USOF is a highly

visible program, it is important to generate high impact outcomes. On the strategic

front, USOF needs to be managed by an independent body that is made

responsible for outcomes. Third party assessments and greater enforceability of

contracts are necessary operational elements of this design. Without this

operational framework, the strategic elements of design will not provide the value

that was envisaged. This paper also provides a framework for assessment of

USOF and relates it to the experience in other countries. USOF must be treated as

one among many instruments for increasing rural tele densities and efforts should

be made to facilitate policy outcomes on a variety of dimensions.

M.R. Narayana76 estimates the growth contributions of telecom services by

public and private sectors and distinguishes it from the information technology

services. Socio-economic determinants of demand for telecom services are

estimated for fixed and mobile phones in the framework of a Logit model and

76
M.R. Narayana, “Telecommunications services and economic growth: Evidence
from India”, Telecommunications Policy, Vol. 35, Issue 2, 2011, pp.115-127
using data from a small-household sample survey in India. Estimation results

show a significant negative impact of price and a positive impact of income

variables; distinguish the importance of social caste, education level, nature of

occupation, age of household head and family size between fixed and mobiles

phones and offer evidence for substitutability of mobile phones for fixed phones.

These results add to the empirical knowledge of socio-economic determinants of

telecom demand and have implications for selective design of policies towards

promotion of higher demand and attainment of higher economic growth by fixed

and mobile services in India and other developing countries.

Rekha Jain77 pointed out that apart from being BRIC countries, what India

and Brazil have in common is a large service sector that contributes significantly

to the GDP. The service sector contributed 66% to the Brazilian GDP and 59% to

the Indian GDP in 2010.

Telecommunication services are a significant part of it in both the

countries. This paper compares the regulatory processes of privatization

of telecom services in these countries and the consequences of these on

the telecom firms broadly and on the sector as a whole. Indian companies, facing

harsh competition and having refined their business models to compete in this

77
Rekha Jain, “Comparison of Privatization Processes of Telecom Services in
India and Brazil”, IIMA Working Papers from Indian Institute of Management
Ahmedabad, Research and Publication Department, 2011.
environment acquired the necessary expertise to foray abroad, opportunistically

building their businesses. The highly competitive regulatory policies in India, led

to the emergence of innovative business models and creation of large domestic

companies both inservices and infrastructure segment and consequently acquiring

the necessary expertise to foray abroad. Brazilian regulatory policies focused on

financially sound business and were open to investment by operators in other

countries. Facing difficult domestic situation, the operators from Europe saw the

Brazilian market as a growth opportunity. The paper concludes that although both

in Brazil and India, the objective of the telecom regulatory policies was to bring in

privatization and competition, the variations in models followed by the two

countries had led to sectoral outcomes that are very different.

Brazilian telecom sector had shown higher penetration, both

for telecom services in general and broadband in particular but domestic

companies, other than one, which too was recently partially acquired by

Portugal Telecom, have not emerged. Phased and controlled FDI in India

combined with the hyper competitive scenario has led to the emergence of

Indian telecom firms that have become significant global players.

 Varadharajan Sridhar78 India is the second largest telecommunications

market in the world, next only to China. This book provides a comprehensive

coverage of different telecom services-basic, mobile, national and long distance

telephony, internet, satellite, television, and FM broadcasting. It offers an in-depth

and valuable perspective on various aspects of this sector by analyzing network

externalities, economies of scale and scope, and their effects on market structure

and regulation. Elucidating the specific characteristics of basic telecom services, it

highlights its unique cost structure, tariff regulation, and universal service

obligations. Illustrating the case of mobile services, it dwells upon the different

stages of spectrum allocation and management-third generation and broadband

wireless spectrum, including the trade-off between competition and industry

efficiency due to limited spectrum availability and fragmentation. The book also

explores market strategies-citing success stories of frugal innovation in operator

services, innovative partnerships, and evolving indigenous mobile phones.

A. Nakamura79 pointed out that the study based on a conjoint-type survey

analysis, the switching cost of several Japanese telecom services are empirically

examined simultaneously, contingent on each carrier's bundling strategies. The

78
Varadharajan Sridhar, The Telecom Revolution in India: Technology,
Regulation, and Policy, OUP Catalogue from Oxford University Press, 2011.
79
A. Nakamura, “Estimating switching costs after introducing Fixed-Mobile
Convergence in Japan”, Information Economics and Policy, Vol. 23, Issue 1, 2011,
pp.59-71.
results suggest the following conclusions. The hierarchy of switching costs is

mobile phone service, fixed phone service, ISP (Internet Service Provider), and

broadband access service, in descending order. Even if the government prohibits

the formerly state-owned monopoly NTT from forming alliances with other

carriers, the legacy NTT group would still command more than half of the market

share under FMC if each carrier adopts a pure bundling strategy. If mixed

bundling emerges as the primary strategy in the FMC market, the resulting type of

competition from the introduction of FMC does not stimulate competitive pricing.

Pankaj Sinha and Nataraj Sathiyanarayanan80 stated that the phenomenal

growth of telecommunication sector in India has largely been possible due to the

contributory factors such as the efforts made by private and public telecom service

providers to make services affordable to the mass market, reduction in entry

barrier due to drastically lowered entry level price for devices, changing

demographic profile and the increasing per-capita income. However, it the issue

of spectrum pricing that has captured the centre stage with the high prices realized

from the 3G and BWA spectrum auction and the outburst of the 2G Spectrum

scam in India. In this paper, we use both the traditional valuation method-

Discounted Cash Flow as well as the Real Option approach that takes into

80
Pankaj Sinha and Nataraj Sathiyanarayanan, “Valuation of 2G spectrum in
India- A real option approach”, MPRA Paper from University Library of Munich,
Germany, 2012.
consideration managerial flexibility and strategic decision making aspects. The

analyses have been done individually as the factors determining revenues and

thereby the spectrum values are expected to be different. By dividing the DCF or

ROV value thus arrived by the total spectrum allotted so far in the service areas,

we obtain the price of 1 MHz of spectrum. A sensitivity analysis has also been

done to check the variations arising in the value due to changes in parameters like

ARPU and subscriber count. Ignoring the economies of scale arising from usage

of a larger block of spectrum, this value gives a reasonable estimate of the price of

the spectrum that can be used by both companies and the government. The above

analyses have been done to arrive at the price of 1 Mhz of spectrum in each of the

22 telecom circles and also on a pan India level. The spectrum price range for a

pan India 1 Mhz of spectrum is Rs.1535 crores to Rs.1876 crores. This is

definitely higher than the price discovered in 2001 – Rs.1658 crores for 6.2 Mhz

of spectrum. Finally, we also provide a comparison with the prices suggested by

TRAI in its consulting paper.

The above studies on review clearly show that though there are many

studies concerning the various aspects of telecom services, and no serious attempt

has been made to study the consumer’ attitude towards telecom services in

Virudhunagar district. To overcome the above gap, the researcher has chosen this

topic for research study.

1.16 METHODOLOGY

Survey method was conducted in the study both primary and secondary

data were collected. Telephone subscribers and mobile phone subscribers list

were elicited from the Virudhunagar district BSNL Office. Based on the list,

eleven block were found out as per the census available on 2001. The detail of

list is furnished below:

TABLE 1.5
SAMPLE FRAMEWORK IN VIRUDHUNAGAR DISTRICT
Sample size
Population as Sample size in
Sl. in Mobile
Name of the Blocks per 2001 Telephone
No. Phone
Census Subscribers
Subscribers
1. Aruppukottai 88591 109 136
2. Kariapatti 65794 81 101
3. Narikudi 65163 80 100
4. Rajapalayam 130267 161 201
5. Sattur 89685 110 138
6. Sivakasi 107100 132 165
7. Srivilliputhur 87465 108 135
8. Thiruchuli 75806 93 117
9. Virudhunagar 106638 131 164
10. Watrap 65345 81 101
11. Vembakottai 92102 113 142
Total 973956 1200 1500
Source: As compiled by the researcher

The telephone subscribers list and mobile phone subscribers list prepared

separately for the purpose of research. The individuals were contacted on simple

random basis and data collected from each block. 1200 telephone subscribers and

1500 mobile phone users were contacted with the administered questionnaire.
Secondary data were also obtained from the records of the BSNL Office of

Virudhunagar district. Apart from this, personal discussions were also made with

the authority from BSNL Office to clarify the doubts to improve the mobile phone

subscribers.

1.16.1 Period of Study

The primary data were collected during the period 2010-11.

1.16.2 Analysis of Data

For the collection of primary data, an interview schedule was constructed.

The variables to be studied were identified with the help of pre-test interviews

with the subscribers and officers of the telecommunication sector and from past

literature. The drafted schedule was pre-tested with thirty subscribers to gauge

their reactions. In the light of their comments the schedule was modified. The

respondents were put to test with a Likert five points scaling, such as strongly

agree, agree, no opinion, disagree and strongly disagree and ranking to elicit their

opinion. After collecting the data from interview schedule, it was arranged

systematically and verified carefully. The collected data were tabulated and

processed further. For analysing the data, Chi-square test, F test, Factor analysis

and Garrett Ranking technique have been used and tables, diagrams charts are

used to highlight the facts.

1.17 LIMITATIONS OF THE STUDY

As this study has covered a very small sample when compared to the actual

universe, the results of this study could be applied in different situations after

taking care of the likely difference in the characteristics of the population. As the

respondents consisted of rural people, they could not understand modern

technology.

1.18 CHAPTER SCHEME

The study is entitled “CONSUMERS’ ATTITUDE TOWARDS TELECOM

SERVICES: A STUDY WITH SPECIAL REFERENCE TO BSNL IN

VIRUDHUNAGAR DISTRICT, TAMILNADU” has been presented in six

chapters.

The first chapter entitled, ‘Introduction and Design of the Study’, deals

with introduction, statement of the problem, objectives of the study, importance of

the study, review of selected literature, methodology, limitations of the study and

ends with chapter scheme.

The second chapter deals with the study area, profile of the BSNL

Telecommunication and sample respondents. The BSNL profile includes origin,

management and board, capital, asset, achievements and future plan of BSNL

Telecommunication.