The Hindu Business Line : Rs 8,000-cr plan for rural phones

THE Government has embarked on a Rs 8,000-crore plan to provide 6 million new fixed line telephones in rural households by 2007 with support from the Universal Services Obligation (USO) fund.

The USO fund administrator has invited expression of interest from telecom operators across 20 States to bid for the largest project envisaged under the USO scheme.

"The bids will be opened by next month and the entire process of finalising the operators will be finalised by March. We have worked out a per line cost of Rs 17,000 which may be brought down if there is competitive bidding. The operators can use any technology, including GSM and CDMA, for offering fixed telephone services in these villages," said Mr Shyamal Ghosh, Administrator, USO fund, Department of Telecom.

This is the first project aimed at rural households. Until now, the USO fund was being used for setting up village community phones.

Operators holding the licence for a particular circle would be allowed to bid for the pre-determined villages in that circle. The support from the USO fund shall comprise a one-time front loaded subsidy and equated annual subsidy payable quarterly in arrears over a five-year period. The subsidy shall be paid from the date the rural household direct exchange line is installed. The front loaded subsidy shall be payable only for net addition of rural household DELs in a secondary switching area.

The USO fund is supported by the revenues collected by the Government from telecom service providers. Five per cent of the operator's revenues goes towards USO fund.

The USO fund administrator is also setting up high-speed voice and data centres across villages in the country. A pilot project is being undertaken by the DoT in 2,000 villages after which tenders are likely to be issued next month.

"We are also in discussion with the mobile industry to explore the option of using wireless phones in covering villages," said Mr Ghosh.

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