Thursday, 31 December 2015

In India, electricity and telecom sectors provide a contrasting picture when it comes to profitability and debt management. Examine why telecom sector has done well in India and what electricity sector can learn from telecom’s experience. (200 Words)

India's telecom and electricity sector provide glaring contrasts: the former has succeeded the latter in terms of both profitibility and debt management. This comes as a surprise since telcommunication was introduced much later than electricity sector.

The possible reasons can be:
1.About 90% services in telephony are prepaid which saves it from unpaid services.
2.Most of the undertakings in telephony is done by private investors. Unlike public investments,these are hasty and involve less procedures.
3.Ease of infrastructure sharing.
4.Injection of new services from time to time,such as WiFI and Wimax.
5.Multifarious services such as health,education etc depend on telecommunication for their progress
Power sector can succeed by learning from telephony in following ways:-
1.Use of prepaid electricity cards to ensure that no electricity units go unpaid
2.Better debt management,achieving targetted total susbsidy by P&Q susbsidies
3.Compulsory metering to measure each and every unit used.
4.Ensuring that genuine competitors are available in market for power distribution.
5.DISCOMS can be encouraged to take up projects by settling tariff-cost issues.
6.Greater use of electricity in fields of infrastructure,telephony which can expand its base
Power sector can be one of the biggest benefactor of revenue to the economy. Such a sector should not be waded away due to solvable anomalies.

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