Telecommunications and Development

Abstract

Until the mid-1990s the ownership of a telephone in India was considered a luxury, not a consumer item. The waiting period for a landline could extend from five to 10 years. Even in 1996, for instance, people were waiting for a telephone after having paid a hefty amount as an application deposit for three to five years. Today in many states companies are competing to gain customers and there is no waiting list. Mobile telephone services have become so cheap now that subscriptions have outpaced fixed line connections. In 2005 and 2006 on average 4.5 million new mobile subscribers were added every month. The rapid spurt in tele-density has been exceeded only by China. This article will offer a political economic analysis of the dramatic growth of the cellular telephone industry during the last decades in India and China, and the public policy on deregulation that has driven this growth. In India the liberalization of telecommunications was ushered in the early 1990s by the Congress regime; the nationalist BJP regime further liberalized the industry. The article will also discuss the ‘mobile divide’ in the country, and between the urban and the rural sectors, and how this divide has had an impact on economic development. Some experiments in taking cellular telephony to the rural poor will be described. Finally, the article will ex-amine the uses and gratifications provided by cellular telephony, especially among the Indian youth.