DoT, BSNL in MoU for rural reach

Posted on January 27, 2009  /  0 Comments

The Business Standard, 27 January 2009

The Department of Telecommunications (DoT) has signed a memorandum of understanding (MoU) with state-owned telecom operator Bharat Sanchar Nigam Ltd (BSNL) to provide wireless broadband in rural areas.

Under the MoU, BSNL will provide wireless broadband at 29,000 rural exchanges throughout the country. Each exchange will have 31 connections along with one kiosk for public use. A DoT official said, “Out of these 31 connections, 6 will be used by institutions like schools, while the rest will be for individual users.”

The implementation of the entire project is expected to be completed by 2011. Currently, there are over 5.45 million broadband subscribers in the country. This move comes as a catalyst in the government’s aim to reach 20 million broadband subscribers by 2010.

The DoT is planning to provide funds worth around Rs 1,800 crore to BSNL for its various activities. According to sources close to the development, approximately Rs 700 crore are being provided for upgrade of the 2,700 BSNL exchanges across the country for provisioning of wireline broadband, Rs 700 crore for kiosks and Rs 400 crore for computers.

However, private telecom operators have opposed the extra funds being allotted to BSNL from the Universal Service Obligation (USO) Fund. In a letter to the Union telecom secretary, the Cellular Operators’ Association of India (GSM operators’ lobby) and Association of Unified Telecom Service Providers of India (CDMA operators’ lobby) have alleged that there is huge corpus lying unutilised under the USO Fund (approximately Rs 15,000 crore).

The USO fund is created from a 5 per cent universal service obligation levy that the government charges all telecom operators in India. The fund is meant to support extension of connectivity to areas where private operators do not enter due to lack of adequate profitability.

Private operators have asked the DoT to disburse the USO funds to all operators rather than restricting it to state-owned operators.

The letter stated: “BSNL is as much a commercial operator like any other private operator …In fact, they are making all out efforts to aggressively roll out their networks and services across the length and breadth of the country …any step at this stage that is aimed at advantaging only the public sector operator will be a huge blow to the principles of level playing field, natural justice and fair competition.”

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