TRAI has proposed a subsidy of Rs 80 billion for creating telecom infrastructure in rural areas. This subsidy will be given to all access service providers contributing to the USO Fund. Thus private players are now eligible for government support. Under the present policy only BSNL is eligible for USO Fund support for providing basic phone services. The TRAI recommendations look at raising rural teledensity from 2 per cent to 15 per cent by 2007 by proposing infrastructure sharing between three service providers in the rural areas. In its recommendations for rural telephony, TRAI has said if three operators share the passive infrastructure, the total cost of base stations would be Rs 105 billion. Support from the USO Fund of Rs 90 billion would make it possible to install 20,000 base stations in the rural areas with connectivity to the main network that will cover about 80 per cent of the villages. This implies that a subsidy support of Rs 80 billion is sufficient, according to TRAI.
