With telecom minister A Raja demanding that operators show proof of their commitment towards rural telephony, service providers in turn have demanded increased commitment from the government towards supporting their rural foray.
Cellular operators have approached the Department of Telecom (DoT) demanding that in the upcoming tender, which will extend support from the Universal Service Obligation Fund (USOF) for setting up telecom towers be expanded to 25,000 towers from the proposed 10,000.
DoT has just concluded a tender for setting up about 8,000 towers in rural India with support from USOF. Cellular operators have also asked the government to extend support from the USOF for subsidising handsets in addition to seeking that revenues from shared infrastructure be exempted from levies. All telecom companies pay 5% of their total revenues towards the USOF, which is used to fund rural telephony.
The Cellular Operators Association of India (COAI), in its communication to DoT has pointed out that Trai in its recent report had said that India would require about 3,30,000 towers by 2010 as against the current 100,000.
â€œWe understand that the second phase of the scheme is already under consideration by the government and would like to suggest that it be enhanced both in size as well as scope to deliver maximum benefits to customers.
We believe that given the enormity of the task before us, the scale should be scheme should be significantly enhanced and should cover at least 25,000 towers,â€ COAI said. The association has also suggested that since the benchmark levels for costs and subsidies had already been established in the first phase, this could be extended to the second tender also.
With regard to Mr Rajaâ€™s call that operators take steps to roll-out wireless broadband in rural India, the COAI has said that the high-entry barrier for the terminal would first have to be addressed to make this a reality. â€œThe terminal can be a handset, a fixed wireless terminal or even as PC terminal that is enabled through wireless. It is thus suggested that customer premise equipment may be considered for subsidy through the USO Fundâ€.
COAI has also asked the government to implement the Traiâ€™s recommendation that operators be given a discounts in the payment of their license fee and spectrum charges as an incentive for rural roll-out.
At the same time, they have also requested that revenues from sharing of infrastructure be exempted from all sector levies. â€œThis will act as a big incentive for service providers to share infrastructure, and will thus enable faster spread of affordable service to far-flung areas in the country,â€ COAI added.