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Thomas K. Thomas

New Delhi , Sept. 19

BHARAT Sanchar Nigam Ltd and Reliance Infocomm will share the contract for setting up community phones in 50,000 villages with support from the Universal Services Obligation (USO) fund.

While the two companies had separately bid for most of the villages, BSNL won the contract for rolling out community phones in two-thirds of the specified villages.

The competitive bids from the two companies were opened earlier this week.

According to senior Government sources, the competitive bidding has resulted in bringing down the cost of the project by about 20 per cent.

The details of the contract and the bid amount will be announced by the Department of Telecom on Monday.

An agreement between the two operators and the Government is expected to be signed on September 23.

The 50,000 villages identified are spread across 19 States and have a population of more than 2,000 people with no PCO facility yet.

The support from the USO fund comprises a front loaded subsidy and an equated annual subsidy over a period of seven years.

The operators are required to cover at least 20 per cent of the villages within one year from the effective date of the agreement and a minimum of 60 per cent by the end of second year.

The balance shall be provided by the end of third year.

The USO Fund Administrator is moving ahead with plans to cover all the 5.7 lakh villages with public phones.

While 5.2 lakh villages have already been covered, tenders for setting up telephones in 50,000 remaining villages have been issued.

The administrator has also initiated the process for setting telephones in village households.

Thirty-one lakh such phones have already been set up.

That apart a tender for setting up tele-info centres in 40,000 villages is also under way.

However, these plans may hit a roadblock with the Finance Ministry delaying the release of money to the USO fund.

As against an allocated amount of Rs 3,700 crore for the last year, the USO fund has received only Rs 500 crore from the Finance Ministry.

The Department of Telecom already owes operators close to Rs 1,000 crore for putting up village phones and is awaiting the money to flow into the USO fund from the Finance Ministry's coffers.

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