Telecommunications is widely recognised as the prime support services needed for rapid growth and modernization of various sectors of the economy. Development of sound telecom infrastructure plays an important role in meeting the diverse needs of people and improving their quality of life. Telecommunication covers a very wide variety of services such as sound & television broadcasting; space communications; aeronautical and maritime mobile communications; meteorological aids and services; radio amateurs; as well as the public telecommunications services. Provision of telecom services to the rural areas has been recognised as another thrust area to attain the goal of accelerated economic development.

India's telecommunication network is the third largest in the world and the second largest among the emerging economies of Asia. It is also amongst the fastest growing telecom markets in the world. Our telecom industry manufactures a complete range of telecom equipments using the state of the art technologies designed specifically to match the diverse terrain and climatic conditions. Production of telecom equipment has increased from Rs. 17,833 crore in 2005-06 to Rs. 23,656 crore in 2006-07. As a result, India is expected to become a manufacturing hub for telecom equipment. Tele-density, the most important factor in determining the penetration of telephone lines in a country has been increasing over the years, from 16.83 per cent in December 2006 to 23.89 per cent in December 2007. The total number of telephones has increased from 189.92 million as on December 31, 2006 to 272.87 million as on December 31, 2007.

The Department of Telecommunications , under the Ministry of Communications and Information Technology, is the concerned authority for all matters relating to telecom. The department is responsible for formulating the developmental policies; granting licenses for various telecom services ; promoting standardization, research and development as well as private investment in the sector.

Foreign Direct Investment (FDI) was permitted in the telecom sector beginning with the telecom manufacturing segment in 1991. For this sector, FDI includes investment made by Non-Resident Indians (NRIs), Overseas Corporate Bodies (OCBs), Foreign Entities, Foreign Institutional Investors (FIIs), American Depository Receipts (ADRs)/Global Depository Receipts (GDRs), etc. Telecommunications is the third largest recipient of FDI after services (financial and non-financial) and computer hardware and software which attract 20.43 per cent and 15.21 per cent respectively.

With the opening up of the sector for private players, an independent regulatory body called as the Telecom Regulatory Authority of India (TRAI) was established in 1997, under the Telecom Regulatory Authority of India Act, 1997 with the aim of providing an adequate framework of safeguards for ensuring fair and healthy competition.

The Telecom Regulatory Authority  of India Act, 1997 was amended  by the Telecom Regulatory Authority of India (Amendment) Act, 2000 .  By the Amendment Act, an Appellate Tribunal known as the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) has been set up  to protect the interests of service providers and consumers of the telecom sector and  thus ensure an orderly growth of the sector. It has been empowered 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.

Given the existing telecommunication set up, the future vision for the sector envisages a total of 650 million telephone connections (including 66 million wired and 584 million wireless connections) by the end of 2012; concurrent provision of 200 million rural telephone connections, which translates into a rural tele-density of 25 per cent; availability of broadband connectivity on demand, without any limitation on the speed; as well as increase in internet and broad-band subscribers to 40 million and 20 million, respectively, by 2010. Hence, India offers immense opportunities for telecom service operators, infrastructure vendors, manufacturers and associated services companies.

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