The Department of Telecommunications (DoT) has announced the total subsidy for financing a country-wide rural wireless broadband rollout at roughly Rs 60-80 billion.
The subsidy, which will be paid out of the Universal Services Obligation Fund (USOF), will be available to operators who finally win the rights to roll out wireless broadband networks in all 22 circles. The actual subsidy payout will be linked to the lowest bid per circle on conclusion of the tendering process.
Currently, mobile phone companies share 5 per cent of their annual revenues with the USOF and the unused sum is estimated at a little below Rs 170 billion. The capital cost of providing wireless broadband connectivity to 0.5 million villages is estimated at Rs 150 billion.
With this, the tendering exercise to provide wireless broadband connectivity to 0.5 million villages will be expedited.
The tendering exercise, which was originally scheduled in March, got delayed since the government had not computed the relevant subsidy payouts for each telecom zone.
It is believed that the exercise has taken more time, since the subsidy calculation was complex. It entailed a minute assessment of the potential purchasing power and demand for rural broadband in each state. However, DoT is yet to finalise the tendering schedule.
This is largely since the government is yet to take a final call on the number of slots that will be put up for bidding per circle. While the draft tender norms had recommended one slot per circle, a section in the DoT believe there should be at least two slots available for private operators, while a third slot may be reserved for Bharat Sanchar Nigam Limited (BSNL).
Also, there is a view that preference should be given to operators who won 3G and BWA spectrum for rolling out wireless broadband networks in the countryside. However, in the draft tender norms, DoT noted that potential bidders will be free to determine any technology platform.
So, it proposed to invite bids from mobile phone companies, fixed-line operators and internet service providers to initiate the countrywide wireless broadband push for bridging the digital divide.
The objective is to offer high-speed connectivity to individual households, panchayats, hospitals, schools and factories across some 0.5 million villages across the country. Depending on the choice of the package, the target audience would avail download speeds from 512 kbps upgradable to 2 Mbps.
