The 1994 policy had opened up the telecom sector to private players, with the objective of fulfilling demand for telecom services. In basic services, it was estimated in 1994 that 10 million connections would be released during the 8th Plan period (1993-98).

As such, the department of telecommunications (DoT) was to provide 7.5 million lines, while the balance 2.5 million lines were to be installed by the private sector.

DoT managed to install 8.73 million telephone connections during the period, thereby exceeding the target by 1.23 million lines. The provision of telephones by private basic telecom operators was nil during this period due to a variety of reasons delaying their efforts. (The Sunil Mittal promoted Bharti Telenet, became the first to offer basic services in Madhya Pradesh during the last quarter of1998).

According to sources, the reason for the shortfall was also in part due to higher demand of telephone connections. While the actual demand was 17.43 million lines, the 1994 policy had envisaged a demand of 15.8 million lines.The policy had set a target of 3.38 lakh village public telephones (VPTs) in the 8th Plan period. As per the licence conditions, private operators in basic telecom services were supposed to provide a minimum of 10 per cent of the lines as VPTs. Under the roll out plans for six telecom circles where licences were signed, a total of 68,000 VPTs were to be provided by the operators.

While DoT provided a total of 1.96 lakh VPTs, private sector contribution was nil. At present, a total of 3.1 lakh VPTs exist, while another 2.95 lakh VPTs are to be set up in the 9th plan period. The policy had also set a target of installing one PCO per 500 persons in urban areas. This target will now be achieved by March, 1999.

As per the objectives of the 1994 policy, a number of steps were takenlike automatic permission for 51 per cent foreign equity, royalty of five per cent up to $ 2 million, technology transfer fee in domestic sales and eight per cent in exports were accorded. With the adoption of of these policies, the manufacture of telecom equipment in the country increased.

The 1994 policy had envisaged growth, development and penetration of basic telephone services right up to the village level with major contribution from the private entrants. In light of the current scenario, the new policy is expected to evolve a "total customer satisfaction" strategy based on integrated and state-of-art communication services.