The “Economics of Small Things” presents a notion in economics through a variety of daily items and events, such as how Facebook could be used to create long-lasting social change after shutting down Telegraph services in India. Without relying on graphs or equations, is it likely that Game Theory or the Cobra Effect will apply? 

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What could be the possible economic rationale to explain the transition and increase in our need to have shut down the telegraph services and the advent of social media, particularly, Facebook? Could it also have socio-economic implications?

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Through our article, we will sift through Telegraph services and Facebook, particularly in India. The transition timeline from Telegram to Facebook and the viability of both mechanisms in today’s world. And finally concluding through a Behavioral Trend Analysis.

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The Era of Telegraph

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“Smart phones, emails and SMS seem to have pushed the humble telegraph service to a quiet corner with the BSNL deciding to discontinue the 160-year-old telegraph service from July 15. Once the main source of quick and urgent communication, the service delivered many happy and sad news to people spread all over the country.”

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-The Economic Times, 2013

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The Indian telegram service, also known as "Taar," was viewed as a sign of change. For 160 years, the delivery of urgent, good and bad news to Indians was catered to by the Telegraph. It wouldn't be incorrect to refer to Telegraph as the beginning of communication in India since its development by the British in the 1850s. The country telegraph system was acquired by the state-owned telecommunications operator BSNL from the Indian Postal Service in the 1990s. Globally, the telegraph's continued use was being endangered by a trend towards digital communications that started with the invention of the digital computer in the 1960s. The telegraph service was harmed by the telephone revolution in the late 1990s and early 2000s, turning it into a high loss-making facility. After 60 years, BSNL increased the price of telegram in 2011. The cost increased dramatically from 3-4 rupees (U.S. $0.05 - $0.07) for 50 words to 27 rupees (US$ 0.47) for the same number of words. In 2011, a series of losses caused the business to generate approximately Rs 75 lakh annually while costing over Rs 100 crore to operate and administer. Because of this, the government made the decision to end the service permanently in 2013, and July 15, 2013 marked the final day of this venerable communication service in India.

And, like the sine curve, the services saw a hike, before setting foot for downfall, telegraph had become obsolete in the age of smartphones, emails, and the internet, much like the postal service, which is why the service was permanently discontinued in July 2013. And, that was how telegram marked its end in India, the root cause being redundancy and Inflation but what kept it alive until 2013?

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Timeline of the use of Telegraph

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24th May, 1844 - First Telegraph sent

1st November, 1851 - First Telegraph in India

1902 - Cable Telegraph to wireless

1985 - Peak of Telegraph’s use in India

15th August, 1995 - Introduction of internet in India for general public

13th July, 2013 - End of Telegraph services in India and the world

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Economical Inference of the Switch

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According to the International Telecommunication Union, 1% increase in digital ecosystem development leads to 0.14% rise in per capita GDP in OECD countries and 0.10% increase in per capita GDP in emerging market economies. This means that higher economic development would begin with stronger contribution of the digital ecosystem on economic growth, hence, creating a space for digital innovation to take over telegraph. Some positives of the transition are construction effect (rise in employment) , increase in workers productivity, skill signaling effect, decreased time for job search etc. Like everything it has its negatives as well. It reinforces the digital divide, degrades the quality of human relationships and ability to empathize with others and in some part cultural uprooting. Thus, even after positive impacts on economy and productivity, social and individual factors such as data privacy, trust and cybercrime are a good amount of opportunity cost that refrain people from using new digital mediums. However, there’s something else that kept people using the traditional telegraph services even when other modes like e-mails and social media were way more convenient.

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Behavioral Trends with Telegraph and Telephone Services

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After understanding the economic implications of the transition, let’s now look at the behavioral aspect of the shift from Telegraph to Telephone which explains why, even after the advent of Facebook in 2006, telegraph services came to a halt only in 2013. Unlike telephone, which sends sounds and videos over great distances, telegraphy involves conveying written text. It was simpler to implement telegraphy, which sends a lot less signal for the same amount of information. While using Facebook required the access to a Telephone, a Telegraph could be sent at the minimal cost of 3-4 rupees. With the age-old habit of relying on past traditions over technological advancement, people continued using telegraphs. But with its dot-and-dash Morse code, telegraphs were eventually found to be essentially confined to receiving and delivering only one message at a time, despite being a highly successful device. People began to choose visual aid, cost effectiveness in the long run (considering usage of telegraphs caused inflation and continuous pressure on finances of BSNL), and a social life, instead of a monotony.

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Considering the negatives of Facebook stated above, it makes us realize how the time of Telegraph was maybe better than that of Facebook for an individual. Still, in a simultaneous move game, where one person continues telegraph while the other uses Facebook, the Nash Equilibrium is bound to be achieved at a dual Facebook win.

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In a world of easily accessible instant messaging applications, a telegram may give a person the same utility as dropping a mail or a text even if a call and facetime are more advanced and convenient ways to convey a message. While the socio-economic dynamics changed with the advent of technology, our old school heart, not so much and even today, when we sit over tea with our grandparents, they reminisce about the time of the Telegraph, the so-called, ‘bearer of bad news’ an era, the Telegraph got dissolved in midst of the world’s advancement.

CONCLUSION

Conclusively, even after digital mediums being highly efficient, the telegraph services came to an end after two decades of its decline. Some of the people kept using telegraph services even when they had other mediums on their fingertips. Prashant Pandya from Vadodara comments on the demise of telegraph services, “We now have far more efficient ways of sending messages such as emails and texts- but nothing quite as elegant and dramatic as vintage telegram.” For people, switching between technology is not just about efficiency and economics, people tend to attach emotions and memories to even the lags of old technologies. For instance people tend to miss the compression of sentences that the cost of sending a telegram necessitated.

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Kashaa Swami & Vishavjeet Singh 

 Shri Venkateshwara College,

Delhi University

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