A Pragmatic Study on the Economic Performance of Century Old State Owned Telecom Services in India

Abstract

The Century old State owned Department of Telecommunication in India continues to generate net operating revenue since its inception. The operating ratio had shown a declining trend over the years. This is on account of decrease in staff expenses and cost of operation. The reduction in "telephone and employees ratio" is also the other reason for the downfall. The expenditures were not increasing at the same ratio of increase in revenue. There was also a steady increase in profit with a corresponding increase in the ACGR. This is the positive side of the performance of the Telecom Department. The surpluses were generated merely by increasing the tariff in many years. The percentage of return on investments increased gradually up to a certain year and started to decline thereafter. The rate of return on investment was less than the requirement of return for the position of no profit or no-loss operation save alone the rate required for making the entire business totally self-dependent and self-financing.