Competition is the key to success in the telecom sector, as that alone will lead to better quality at reduced cost. Moreover, convergence with the IT sector has opened up new opportunities. In the power sector, generation and distribution are being privatised. As in India, several public sector utility companies in most developing countries are poorly managed, soaking up the exchequer's money to cover losses. Distribution and transmission losses are also high, and huge investments are needed to meet the growing demand for power.
Governments are in no position to meet the demand for funds all by themselves.
Privatisation is expected to offer some remedy to this situation. But subsidies to farming and other sectors will be phased out, and actual user costs will come into the picture in utilities, be it power or water supply. The transport sector is also seeing increased divestiture, as many countries in Sub-Saharan Africa, East Asia and Latin America and the Caribbean are going ahead with the privatisation of airlines and airports. India, too, has invited bids for limited disinvestments in Air-India and the domestic carrier, Indian Airlines. Airport services may be leased out as a first step towards eventual privatisation of airports.