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Thomas K. Thomas

New Delhi March 19 Rural telephony has become so lucrative that some of the operators are willing to give money to the Government to offer services in villages than take subsidy from the Universal Services Obligation fund.

In the second round of bidding for rolling out mobile services across 2.5 lakh villages, held on Monday, operators including Bharti Airtel and Aircel have put in negative bids, which means that they will give money to the Government if they win the contract. This goes a step beyond the previous round where operators, including Reliance Communication, Idea Cellular and Bharat Sanchar Nigam Ltd, had put in proposals to offer mobile service with zero subsidy. They will, however, be able to share the passive infrastructure, being set up with support from the USO Fund, for a period of five years at no additional cost. Passive infrastructure comprises land, tower, power and civil works that are required to offer active cellular service.

In the passive infrastructure category, BSNL has quoted just 15 per cent of the benchmark subsidy earmarked by DoT. BSNL has, therefore, bagged contracts for setting up 6,125 mobile towers out of the total 7,871 passive cell sites. Among the private companies, GTL Infrastructure has got the contract to set up 471 towers, while Reliance Infrastructure has won the bid for 472 towers. These companies will have to set up passive infrastructure across 497 districts in a year's time.

Bids for the rural project were invited by DoT in two parts for setting up the passive infrastructure and for offering the active mobile services to rural consumers. As a result of the aggressive bids, the overall project cost is set to come down by 80 per cent. This will ensure that cellular service will be available to another 270 million, who have not had access to telecommunication facilities till now, at affordable rates.

Related Stories:
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Govt gets aggressive bids for rural mobile project

More Stories on : Telecommunications | Rural Development | Infrastructure

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Rural telephony to ring in money for Govt from operators

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