The Hindu Business Line : Big 4 bid for rural phone project under universal services obligation

THE big four telecom players — Bharat Sanchar Nigam Ltd, Reliance Infocomm, Bharti Tele-Ventures and Tata Teleservices — have bid for the Government-sponsored Rs 8,000-crore plan to provide six million fixed line telephones in rural households by 2007.

The project is being supported from the Universal Services Obligation (USO) fund. The Government has also received bid from Himachal Futuristic Communications Ltd for providing rural phones in Punjab.

Confirming the development, Mr Shyamal Ghosh, Administrator, USO Funds, told Business Line, "The technical bids for the companies were opened on Tuesday, which are now being evaluated. The interest shown by the private operators proves that there is a market for telecom services in rural India."

The USO fund administrator had invited expression of interest from telecom operators across 20 States to bid for the largest project envisaged under the USO scheme.

While the State-owned BSNL has bid for all the circles, Tatas have bid for 16 circles. Reliance has put in its bid for 15 circles and Bharti has expressed interest in 11 circles.

No bids for North-East, Assam

"Since none of the private operators have bid for the North-East and Assam circles, BSNL will be awarded the project in these areas by default. These are one of the toughest sectors for rolling out telecom services," said Mr Ghosh.

This is the first project aimed at rural households. Until now the USO Fund was being used for setting up village community phones.

The USO Fund administrator has worked out a per line cost of Rs 17,000, which is expected to be brought down due to competitive bidding.

5-year subsidy

The support from the USO fund shall comprise a one-time front loaded subsidy and equated annual subsidy payable quarterly in arrears over a five-year period. As per the terms of the contract, the operators may use any technology including GSM and CDMA for offering fixed telephone services in these villages. However, operators are not allowed to offer mobile services.

Justifying the decision, Mr Ghosh said, "It would be difficult to identify a mobile using rural subscriber for the purpose of subsidised rural tariff in view of the roaming facilities provided by the cellular mobile services, whereby, even a non-rural subscriber could seek the benefit of subsidised tariff of rural subscriber."

The Government, however, is undertaking a separate exercise to study the feasibility of supporting mobile phones in rural area through the Fund.

The Government has also issued a draft tender document for provision of public tele information centres (PTIC) and high-speed public tele information centres (HPTIC) for inviting comments from interested parties.

A total of 1,600 PTICs and 400 HPTICs will be installed as part of the Rs 150-crore project.

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