USO fund for rural telephony, says government

The government on Tuesday added a twist to the telecom infrastructure tangle, with a proposal to fund rural mobile expansion from the Univer...

The government on Tuesday added a twist to the telecom infrastructure tangle, with a proposal to fund rural mobile expansion from the Universal Service Obligation (USO) Fund.

Telecom Minister Dayanidhi Maran’s first meeting with mobile operators on how they can cut costs of going rural, ended with a consensus that ‘passive’ rural mobile infrastruture should be funded by the USO.

The meeting was attended by Bharti, Hutch, Reliance Infocomm, Tata Teleservices, BSNL and MTNL

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‘‘It was the government’s suggestion that USO should fund new mobile-phone towers and other infrastructure in rural areas. The condition is that those who access the Fund should then share their infrastructure with anyone who wants it,’’ said industry sources who attended the meeting.

Till date, the USO fund has never been used to expand mobile communications. However, the 25 per cent teledensity target for 2008 has the government looking for innovative steps to fuel rural telephony.

With mobile phones recognised as the best way to take voice and broadband to rural areas, the government is keen to support private-sector players that have demanded government assistance.

In a statement, Telecom Minister Dayanidhi Maran said, ‘‘We must create infrastructure in rural areas which will take not only telephony but also broadband to villages.’’

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The USO Fund is meant exclusively for rural or remote areas, and has roughly Rs 3,000 crore in its kitty till date.

BSNL is the biggest contributor to the fund and gets a sizeable share of its proceeds. In turn, it runs around 95 per cent of rural phone lines. A majority of these are fixed lines.