The Hindu Business Line : RCom, BSNL bag bulk of rural cellular project

Up for grabs
Bids were invited by the Department of Telecom for offering mobile services across 2.5 lakh villages, which were divided into 81 clusters.

New Delhi April 12 Reliance Communications and Bharat Sanchar Nigam Ltd (BSNL) have bagged majority of the Universal Services Obligation (USO) fund-sponsored rural cellular project.

At the end of the third and final round of bidding, Reliance got access to 72 clusters of villages while the State-owned company got the contract to roll out cellular services in 58 clusters of villages.

Bids were invited by the Department of Telecom for offering mobile services across 2.5 lakh villages, which were divided into 81 clusters. While seven telecom companies had entered the fray, DoT has selected three operators per cluster.

The bids quoted are so aggressive that instead of paying the operators for rolling out services in rural areas, the Government stands to receive money. As per the bids quoted by the operators, the Government will get about Rs 10 lakh a year with most cellular companies quoting negative amounts. While this amount may be insignificant, what is interesting is that the Government was willing to give away Rs 800 crore annually to the winning operators at the beginning of the bidding process.

Passive infrastructure

Idea Cellular, Hutchison Essar and Aircel have also bagged about 15-20 clusters. The operators who have won the bids will get the benefit of using the passive infrastructure, set up with support from the USO fund, without paying any rental or fee to offer mobile services in the rural market. Passive infrastructure comprises land, tower, power connection, and associated civil and electrical works that enable operators to offer cellular service.

A majority of this infrastructure will be set up by BSNL, which bagged 80 per cent of the rural project, winning contract for setting up 6,125 mobile towers out of the total 7,871 passive cell sites envisaged by the Government.

While currently cellular networks cover about 60 per cent of the over one billion population, the USO project will cover another 270 million people who have not had any telecommunication facilities till now.

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