Financial Daily from THE HINDU group of publications
Saturday, Sep 04, 2004
Info-Tech - Telecommunications
Delay in funds release hits rural telephony
Thomas K. Thomas
New Delhi , Sept. 3
THE Ministry of Communication's plans to provide telephone services to rural India may hit a bump with the Finance Ministry delaying the release of money to the Universal Services Obligation (USO) Fund.
Of the Rs 3,700 crore collected last year, the Finance Ministry has allocated only Rs 500 crore to the Fund.
The Department of Telecom already owes operators close to Rs 1,000 crore for putting up village phones and is awaiting the money to flow into the USO Fund from the Finance Ministry's coffers.
"As against a requirement of Rs 2,700 crore for the current year, the Finance Ministry has allocated only Rs 200 crore. This is not allowing the DoT to properly plan out the future course of action," said senior officials in the Ministry of Communication.
Even the Parliamentary Standing Committee on IT had taken note of this issue in its report.
The USO Fund was set up by an Act to provide support to village telephones. All telecom service providers contribute five per cent of their annual revenues towards the USO Fund.
However, in order to meet the tele-density targets faster, the Ministry of Communication is exploring the option of providing monetary support from the USO Fund to cellular operators for providing wireless access to villages. Until now, money from the USO Fund was set only for fixed line operators.
"We are hoping that the full corpus would be released by the Finance Ministry soon. In order to hasten the process of meeting the targets set in the New Telecom Policy of providing access to all the villages, we are looking at wireless technology as an option. This will result in faster roll out," officials said.
Mobile operators using either the Global System for Mobile (GSM) or Code Division Multiple Access (CDMA) may be invited to bid for the project.
While the modalities are yet to be discussed, resources from the USO Fund will be given only for setting up the infrastructure and not the total cost of providing services.
Meanwhile, the USO Fund Administrator is stuck with its plans to cover all the 5.7 lakh villages with a public phone for want of money. While 5.2 lakh have already been covered, tenders for setting up telephones in 50,000 remaining villages have been issued.
It is also in the process of finalising the contract for setting up community phones in 48,000 villages where there are no telephones other than the village phone.
Reliance Infocomm and Bharat Sanchar Nigam Ltd have bid for the project.
The Administrator has also initiated the process for setting up telephones in village households.
Already 31 lakh such phones have been set up. That apart, a tender for setting up tele-info centres in 40,000 villages is also under way.
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