Govt aid to telcos for rural telephony

Posted on | February 2, 2006 |

The government has reached a landmark deal with telecom companies under which it will fund operators to create telecom infrastructure in rural India from the Universal Service Obligation Fund.

As per the agreement, the government will extend financial support for both passive (land, tower and power back-up) and active (BTS, antennae and a portion of the backhaul) infrastructure, which will then have to be shared between operators. However, bids for the two will have to be separate.

This can lead to a rapid rollout of telecom services in rural India as only Rs 1,800 crore of the USO Fund has been utilised so far against the total collected non-lapseable sum of over Rs 8,000 crore.

In yet another first in the sector, the government has allowed standalone infrastructure providers to bid, but only for setting up the passive part. On the other hand, access providers bidding for setting up this sort of infrastructure must also compulsorily bid for the active component. Tenders for the bids would be announced by February end.

The towers and the land will be jointly owned by the government and the successful bidder, which cannot sell, alienate and lease the infrastrucure without prior permission from the USOF administrator.

The government also said that companies that share the infrastructure will have to arrive at a mutually agreed amount for its maintenance.

Source: Business Standard

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