While the average urban teledensity in India has crossed the 100 per cent mark, the rural teledensity remains at a dismal 18 per cent. Though the Department of Telecommunications (DoT) is taking steps to improve the situation, the setting up of telecom infrastructure in rural India continues at a sluggish pace.
In these areas, telecom infrastructure players are faced with the challenges of low and erratic power supply, lack of trained personnel, and a shaky political and regulatory scenario.
Though the beginning was promising, with operators bidding Re 0 for setting up infrastructure under the first phase of the Universal Service Obligation (USO) Fund rural rollout project, the enthusiasm soon fizzled out. The operators have failed to meet their rollout requirements even after two years of the finalisation of bidding.
As of December 2009, the state-owned Bharat Sanchar Nigam Limited (BSNL) was yet to set up over 5,000 towers while private operators like Reliance Communications and Vodafone Essar had only managed to meet about 50 per cent of their rollout requirements.
In light of this, the government has made the deployment of broadband infrastructure in rural India a key focus area over the past few years. It plans to connect every panchayat to a broadband network in the next three years. DoT has invited bids from private telecom operators to set up wireless broadband infrastructure in 28,000 wireline broadband exchanges and 6,000 rural satellite sites. The project will be funded by the USO Fund, which has recently received Rs 24 billion from the government for subsidising mobile, internet and landline operations in the rural areas. The subsidy will also depend on the extent of infrastructure sharing taken up by the telecom operators.
Further, the government has signed an MoU with BSNL to provide wireless broadband services at 29,000 rural exchanges across the country with a Rs 18 billion support from the USO Fund. At least 28,000 existing rural wireline exchanges under the USO Fund will be provided with this subsidy support.
BSNL has already launched its broadband connectivity at subsidised rates in the rural and tribal areas of Himachal Pradesh. According to the plan, from each exchange, a maximum of 32 connections ?? 25 individuals, six government institutions and one kiosk ?? will be subsidised by the USO Fund in the state. The government will provide a subsidy of up to Rs 850 for the first 31 connections taken up by individuals or government organisations.They will also be eligible for a computer subsidy of Rs 4,500. Self-help groups will be provided with at least one connection per exchange on a preferential basis.
The government is also looking to initiate changes in the USO Fund and its manner of working. In an effort to bring more flexibility in accessing the USO Fund, the government is considering an amendment. It is looking at releasing grants from the USO Fund to telecom operators without any initial bidding for subsidy. This will facilitate quicker rollout of telecom networks in rural India by speeding up work for the second phase of rural bidding.
With the government looking to increase phone usage in rural India fourfold in five years, it will not be long before the rural horizon is also dotted with telecom towers.
