The telecom sector is considered to have positive externality on economic growth and development through forward and backward linkages. Before liberalization, the government-owned Department of Telecommunications (DoT) enjoyed a monopoly and that resulted in its sluggish expansion and poor services. Technological upgradation was very limited. The adoption of liberalization policy in India opened the door for expansion of the telecommunication sector. The main objective of the paper is to examine the growth pattern of telecommunications across different regions in India. The available evidence suggests that the expansion of telecommunication sector is uneven and is limited to urban growth centers.

India ascribes the fifth largest telecom network in the world and the second largest amongst the developing economies, after China, with an annual growth rate of 22 percent in basic telephones and over 100 percent in cellular phones and Internet services. This remarkable growth in the telecom sector has been possible only after the adoption of liberalization policy when the telecom sector was thrown open for competition by allowing private participation. Prior to liberalization, the government-owned Department of Telecommunications (DoT) enjoyed the monopoly position. Moreover, the only service offered by DoT was that of fixed lines. This was characterized by underinvestment, outdated equipment, services that were not customer-centric and growth well below the potential of the market (Jain, 2001). This was reflected in sluggish growth of the telecom sector.

The liberalization policy introduced many changes in the telecom sector and that has shown positive impact on this sector. After the adoption of liberalization policy, drastic changes are visible in the operations and deployment of telecom services. Privatization in manufacturing of telecom equipment and telecom networks in industrial areas was introduced after the liberalization policy. The private sector got further strengthened with government divesting 25 percent of the stake and surrendering its management control in Videsh Sanchar Nigam Ltd. (VSNL) (Rastogi, 2003). On October 1, 2000, the corporatization of government-owned Department of Telecommunications (DoT) took place and Bharat Sanchar Nigam Ltd. (BSNL) came into existence (Vittal, 2000). Also, the liberalized policy attracted substantial inflows of Foreign Direct Investments (FDIs). The FDIs attracted by the telecom sector during the period 1991 to 2002 is US$150 bn (Rastogi, 2003).

Management Research Journal, Telecom Service Development, Post-Liberalization Period, Telecom Network, Telecommunication Sectors, Department of Telecommunications, DoT, Liberalization Policy, Telecom Sectors, Videsh Sanchar Nigam Ltd., VSNL, Bharat Sanchar Nigam Ltd. , BSNL, Foreign Direct Investments, FDIs, National Long Distance , NLD, International Telecommunication Union, Code Division Multiple Access, CDMA, Global System for Mobile, GSM.