The Hindu Business Line : DoT offers sops to operators for rural rollout

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DoT offers sops to operators for rural rollout

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Service Obligation Fund has about Rs 15,000 cr in kitty.
Govt stands to lose about Rs 200 cr from the decision.
Tele-density in rural areas is only about 8%

Our Bureau

New Delhi, July 25 In a bid boost rural telephony, the Government has decided to give financial incentives to operators who roll out services in rural areas. The Department of Telecom has waived the licence fee from revenues earned from fixed line phones in rural areas.

In addition, all operators who cover more than 95 per cent of the rural areas will have to pay only 3 per cent of their annual revenues to the Universal Services Obligation fund instead of 5 per cent now .

More than 95 per cent of rural phones are owned by Bharat Sanchar Nigam Ltd and, therefore, neither of the private players stands to gain immediately from DoT’s decision. However, the incentives could prompt private operators to start rolling out services in the rural areas.

While this could lead to an increase in fixed line telephone numbers, consumers in villages can hope to get connected if the operators accept the offer from the Government. “The Telecom Commission has decided to waive licence fee on rural landline telephones in an effort to promote telephone use in rural areas. The decision is also intended to give a boost to e-governance through provision of more broadband services in villages, thus reducing the digital divide,” said a press release.

The Government will stand to lose about Rs 200 crore from this decision, which is minuscule compared to what it earns from the operators in the form of licence fee.

While India’s tele-density is nearly 30 per cent, in rural areas, it is only 8 per cent. The Universal Service Obligation Fund has been set up to create infrastructure support in rural and remote areas for providing telecommunication service to people at affordable and reasonable prices.

Though the fund has about Rs 15,000 crore in its kitty, not many operators have come forward with any proposal to offer telecom services in rural areas. One criticism of the USO fund is that most of its projects are based on competitive bidding which means that only a few operators get support for rolling out into rural areas.

The new policy is aimed at making the Government’s rural telecom programme more broad-based. “The aim is to achieve rural tele-density of 25 per cent by means of 200 million rural connections at the end of the Eleventh Plan,” the release said.

Related Stories:
Rural tele-density much below target
DoT to allow niche operators in rural areas
BSNL may get relief for rural phone burden

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