Call waiting

These numerical indicators and missed deadlines typify the difficulties involved in connecting villages as well as how the subject of rural telephony has been approached so far.

Telecommunications is critical to almost everything today 8212; social contact, emergency relief, banking, health and education, among so many things 8212; and this 8216;digital divide8217; in rural areas hurts those who may need access to communications more urgently than most.

There are significant challenges to rural connectivity. The terrain is usually rough. The cost of infrastructure, even with cheaper wireless technologies, is often hard to justify commercially, as demand is not concentrated. Erratic power supply may sometimes not be sufficient even to charge wireless desktops or mobile handsets.

Rural areas require more advanced technology, especially multimedia, to mitigate the challenges posed by unique variables like low levels of literacy and diverse languages. Broadband could be invaluable to meet the rural demand for information about livelihoods, governance and entertainment. So, any solution will have to reflect this complexity.

Targets are pointless if the underlying issues are not tackled robustly and in detail. For example, the expansion of communications services in rural is hindered by the licensing regime in the telecom sector. Existing licence holders 8212; the big telecom operators 8212; are going slow in expanding in the hinterland.

These areas are manifestly unattractive to them, in spite of the Universal Services Obligation Fund USOF 8212; a pool created to support expansion of rural networks and financed by mandatory revenue-linked contributions from telecom operators 8212; offering them subsidies to service rural areas. Local players with a presence on the ground, and possibly more customised technologies and creative business models, are interested, but they require expensive statewide licences.

In an impressive document in 2004, TRAI argued the Rs 8,000 crore lying with the USOF will achieve little with the current approach to providing subsidies for fixed-line phones. It instead advocated subsidies for shared infrastructure 8212; like optical fibre and towers 8212; deployed in rural areas. It reiterated its earlier recommendation to allow free licences to small, 8216;niche8217; operators willing to serve areas with a teledensity of less than 1. But, existing players, keen to protect their turf, are opposed to niche players. The government agrees, and is more comfortable only with the USOF subsidy being extended for shared infrastructure and mobile phones.

Civil society players, increasingly frustrated by the poor rural connectivity, have come together to advocate alternative approaches. The big initiative is Mission 2007. Led by Professor M.S. Swaminathan, the father of India8217;s green revolution, this is alliance of leading technologists, developmental organisations, donors and companies, besides the government and TRAI. Its objective is to provide 600,000 villages access to communications services through rural knowledge centres 8212; hubs that will consolidate rural applications and services 8212; by August 2007, the 60th anniversary of independence.

Still, much more needs to be done, both in policy and action. For greater progress in rural areas, both existing telecom operators and civil society initiatives need support from regulators and government. Competitive telecom markets have admittedly worked well in urban areas for the rich and poor alike, but not so in rural markets, where services are sparse, quality poor and choice absent.

The very raison d8217;etre of regulation is to correct such 8216;market failure8217;.But, beyond paying it lip service in their documents, there is little evidence that TRAI and the government have prioritised rural telecom services. The link to rural communications on the first page of the website of the Ministry of Communications and Information Technology mentions the target of connecting all villages by 2002! And, TRAI took seven years to come up with its first paper on rural communications, referred to above.

TRAI8217;s monthly progress report highlights advances in fixed, mobile, broadband, Internet services 8212; but not in rural services. Its quarterly report on sector performance has never had a full page on rural services. Yet, there are pages after pages on largely urban mobile services, discussing their growth, market shares, quality, circle-wise and operator-wise break-up of monthly minutes of usage and revenues. Granted, market shares are meaningless if only BSNL has a rural service worth the name, but the absence of other parameters for the most challenging area in India8217;s telecom sector is difficult to understand.

Rural telecom will not happen of its own accord. The current rules still keep away many interested players and technologies. A great deal of attention will have to be paid to ensure that rules on licensing, spectrum, technologies and business size, among other things, are not obstacles in delivering an important tool for rural development. In short, rural telecom needs comprehensive deregulation. It deserves much more than the periodic proclamations of new targets or the self-congratulation and hype around teledensity numbers.

8216;Double teledensity by 20098217;

A.K. Sinha CMD, BSNL

On how to improve penetration. The government8217;s teledensity targets are our targets too. In the next three years, we alone have to create a teledensity of 11 per cent, against 5 per cent today. We have announced a 60 million line GSM tender. With a consistent rise in turnover and profitability, we can fund this expansion, and don8217;t need any subsidy.

On the Universal Services Obligation Fund and access deficit charges. These are legacy issues. The entire industry has to bear this burden so that rural tariffs remain where they are today. Given the socio-political dynamics, we believe, nobody can change these legacy issues in the near future. BSNL has provided 90 per cent of the country8217;s village public telephones and 16 million rural phones.

On tariff wars. When a price war is on, every operator is pushed into cutting tariffs. Sometimes it is necessary, sometimes it is not, and an operator can opt to stay away. The lifetime validity plans, for instance 8212; not only was there a controversy about the definition of 8216;lifetime8217;, the schemes seemed to be a way to grab customers. In India, what really matters is the number of subscribers: as this count increases, hand-in-hand with value-added services, the average revenue per user ARPU will go up too.