To add why the penetration was not so good.
I remember in 1998 when the cellphone penetration was very low, the charges for mobile service were 36rs(~1$ back in 1998) for outgoing and maybe 16rs for incoming and landlines were 2rs outgoing, the charges for mobile service kept on dropping but never so much as to make it available easily for mass market, in 2003 Reliance-com entered the market with CDMA phone and overnight you had plans as low as 30p, this is when the real competition to the landlines started.
Currently landlines rates are cheapest, you can have unlimited calls for 200rs (5$?), now what changed it.
Well suddently the government organizations who had JOB security and reason not to work and were always profitable, saw a huge dent in their economics due to cellphone, it takes three days to get a new telephone, earlier it used to take three months (if you are lucky and they have not lost your application).
Now if I analyse why the penetration was low, it was because they had JOB security, the same government organisation which should have worked had for the people and development of country was dozing their whole way, I am glad that these government sector services are being replaces with openmarket alternatives.