The Hindu Business Line : Pvt telcos seek extension of support from USO fund

New Delhi, Dec. 18 Private telecom operators, which had won the contract to roll out fixed line telephones in rural households, have sought support from the Universal Services Obligation fund extended till March 31, 2009.

The Department of Telecom had signed agreements with Reliance Communications and Tata Teleservices in 2005 to provide support from the USO fund for setting up fixed line telephones across 1,685 districts. The subsidy support was to continue till March 2007, which was later extended to March 2008 on the operators’ request. However despite the extension, the operators have not been able to fully meet the target and have now sought financial support for another year.

The operators are blaming lack of adequate points of interconnection from BSNL. “In many rural short distance charging areas (equivalent of a district), there are a good number of points of interconnection yet to be provided by BSNL and the service providers are pressing BSNL for providing the POIs for the last two years,” said a letter from the Association of Unified Telecom Service Providers of India (AUSPI) to DoT.

The operators said that since BSNL had placed orders for buying equipment to augment their infrastructure, it will not be able to provide interconnection before the first quarter of 2008.

“We would request you to extend the Rural Direct Exchange Line scheme up to March 31, 2009, so that the objective of extension, which is to make a substantial increase in rural tele-density, can be achieved,” AUSPI said.

The total project is estimated to cost around Rs 6,000 crore. The cost will go up if the scheme is extended by another year. While BSNL had won the bid in almost 80 per cent of the districts, Reliance had bagged about 15 per cent of the project. Market watchers however said that with the Government now supporting mobile infrastructure at much lower costs, the subsidy to fixed line telephone might be discontinued. However, operators said that since the USO fund had more than Rs 10,000 crore, it could provide aid for another year.

As per the initial agreement, operators were supposed to get capital expense for all telephone lines rolled out in the identified villages between April 1, 2005 and March 31, 2007. The operational expense would be provided till 2010.