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Thomas K Thomas

New Delhi , July 24

The Department of Telecom (DoT) has rejected the proposal to set up niche operators specifically for providing services in the rural sector.

The Telecom Regulatory Authority of India (TRAI) had proposed instituting this new category of operators in its recommendations for promoting rural telephony.

Senior DoT officials said that the concept of niche operators cannot be implemented because there was not adequate spectrum available.

"The larger operators are demanding for more spectrum and most operators have planned major rural rollouts in the coming years. In this scenario, it would not be possible for the Government to earmark spectrum for the niche operators," said a DoT official.

The TRAI had suggested that niche operators should be permitted to operate in districts where rural teledensity is below one per cent. DoT officials, however, said that even though the current spectrum usage in rural areas was low, there was no scope for accommodating this new category of operators as the Government was expecting the mobile operators to take on the responsibility and improve the telecom penetration levels.

The TRAI had said that niche operators should be eligible for subsidies from the Universal Service Obligation (USO) fund on the same lines as that available to the other access providers; it wanted them to be spared from spectrum charges.

DoT officials, however, said that even though the current spectrum usage in rural areas was low, there was no scope for accommodating this new category of operators as the Government was expecting the mobile operators to take on the responsibility and improve the telecom penetration levels.

The benefits from the USO fund and other incentives will be given to cellular operators to bridge the digital divide.

While the urban telephone penetration is improving fast - Delhi and Mumbai have close to 40 per cent teledensity - telecom connectivity in rural areas is extremely low with just two per cent teledensity.

The Government is working on a roadmap for improving mobile and broadband usage in rural areas with support from the USO fund - the target being 200 million telephones in rural areas by 2012.

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