Thomas K. Thomas

New Delhi, Dec. 20 Another 275 million people are set to come under mobile coverage area over the next one year.

The Department of Telecom has kick-started the process to roll out another 11,000 cellular towers across 2.4 lakh unconnected villages under the Universal Services Obligation fund. This is the second phase of the rural mobile project being carried out by the Government.

The first round in which 7,800 towers are being set up, received massive response from the mobile operators.

The bids received from the operators were so aggressive that the outgo from the USO fund was scaled down by more than 50 per cent. In some cases operators offered to pay the Government for being allowed to offer mobile services instead of taking money from the fund.

The first phase is still being implemented. BSNL, Reliance Communications, GTL, and Vodafone Essar are among those companies which had emerged winners in the first round of bidding. Among the pan Indian operators, Bharti Airtel had not bagged any part of the project.

Once the second phase is completed, almost the entire country’s population will have access to a mobile phone.

DoT has put up the location of the proposed towers on its Web site and has sought inputs from infrastructure providers and operators.

In the next step, it will invite expression of interest from various players. The largest number of towers has been earmarked in Madhya Pradesh where DoT wants to set up nearly 2,000 towers followed by about 1,000 towers in Orissa.

The rural mobile project assumes significance as the Government has set a target of 500 million subscribers by 2010.

While most private operators have covered the urban population, the growth is now expected from the rural areas. However, operators will face challenges of lower average revenue as a result of lower incomes in rural areas.

A report from the Boston Consulting Group said that operators will need to create new products and services, new modes of distribution and new marketing campaigns to make it a profitable business.

According to BCG, such innovations are necessary to push the number of mobile subscribers in India from about 215 million today to more than 520 million by 2010.

“The 305 million subscribers that could be added represent a potential revenue pool of over Rs 70,000 crore for mobile operators alone,” the BCG report said.

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