TRAI proposes rural telephony rollout encouragement

17 Dec 2008

According to India’s Economic Times, the Telecom Regulatory Authority of India (TRAI) is considering options to encourage the development of rural telephony. The regulator is reportedly proposing financial support be given to all operators that offer telecom services in rural regions and open their infrastructure for sharing. The funds would come from the Universal Service Obligation Fund (USOF), towards which all operators pay 5% of their annual revenues. According to the regulator teledensity in rural regions at the end of September 2008 was just 12.72%, compared to 72.47% for urban areas. The proposals come following the revelation that a bulk of the funds in the USOF remain untouched; in 2007 INR200 billion (USD4.13 billion) was collected from operators with only INR67 billion taken out and utilised for improving rural telephony that year.

The TRAI has also suggested that a new, separate operator be set up, to be funded by the USOF with the mandate of providing fibre-based connectivity to rural regions. In a statement commenting on the proposals the regulator noted, ‘The fibre laid should be given free of cost for the next five years to any operator who provides services in the villages.’