Financial Daily from THE HINDU group of publications
Monday, Dec 20, 2004
Industry & Economy
Info-Tech - Broadband
To ensure rural connectivity Plan panel backs broadband platform
New Delhi , Dec. 19
THE rural connectivity issue could be effectively addressed through broadband platform as the extant policy of fixed-line voice telephony based rural connectivity has proved to be unviable, the Planning Commission contends.
Sources in the Yojana Bhavan told Business Line here that as the Plan panel is in the midst of preparing its mid-term appraisal report, the thinking on the policy issues pertaining to telecom sector centres on the use of broadband platform over the conventional one due to the latter's high-cost of rollout and low revenue generation capabilities and provision of single service, that is, voice telephony.
The annual financial burden of rural telephony in the present form to the Government works out to about Rs 12,300 crore (Rs 9,000 crore as operational loss to BSNL; Rs 3,000 crore reimbursement to BSNL on account of rural telephony and about Rs 300 crore reimbursement from Universal Service Obligation (USO) Fund), the sources said.
Moreover, in the existing system, there is no way to segregate the loss on account of "inefficient operations by the incumbent and losses on account of meeting social obligation," they say, adding that "besides leading to serious financial implications for ill-health of BSNL, the Government might find it very difficult to sustain it over a long period of time."
Stating that the future model of tele-info services has to be both "futuristic and financially viable in the long run," the sources point out that it must have the capabilities to meet the future needs of e-commerce, tele-info services, social services such as e-education, e-health and delivery of public services including e-governance.
As the broadband appears to be the appropriate platform to achieve this, the sources said that future rollout of services in the rural areas might have to be built around this platform.
Following the huge investments sunk in by the Government/BSNL during the last decade or so, a very suitable infrastructure in the form of optical fibre backbone is available in the country right into the nook and crannies of the rural areas.
BSNL's 27,000 rural exchanges have optical fibre connectivity in all the 2,648 Short Distance Charging Areas (SDCAs) making the optical fibre nodes available in 4-5 interior locations in each block. This implies accessibility of within 15-20 km of most villages with large bandwidth through lighting up of dark fibres, the sources noted.
This also implies that the total investment needed for building the backbone of a countrywide rollout of broadband in the rural areas would be one-fourth to one-fifth of that needed against the scenario in which one had to build afresh the entire optical fibre backbone.
In order to effect the rollout, the sources said, "We need to light up the optical fibre and ensure development of last mile connectivity" and taking into account the logistics, the timeframe for a rollout and cost effectiveness, wireless technology appears to the more suited. The choice of technology must, however, be left to the operator of the last mile.
Pointing out the various policy interventions needed for a national rollout of broadband connectivity in the rural areas, they said these include permitting full triple play to all rural broadband service providers, providing appropriate spectrum by delicensing the required band including 5.15-5.35 GHz for Wi fi and Wi Max technologies, providing necessary support from USO Fund if needed for sharing a part of the capital cost and bearing costs of bandwidth for the initial five-year span and ensuring that the niche operators should either be franchisees of the incumbent or independent operators registered with the Government.
Finally, there is a need to finalise the legal, institutional and regulatory modalities of opening of broadband services in the rural areas quickly to leapfrog the broadband rollout.
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