TRAI suggests measures for accelerated growth of rural telephony

The Telecom Regulatory Authority of India (TRAI) has recommended various measures, including the creation of a separate administrator for the Universal Service Obligation Fund (USOF), to overcome the various constraints coming in the way of increasing rural telecom penetration.

In ''An approach to Rural Telephony', released today, TRAI noted that the rate of growth of telecom penetration in urban India has been high as compared to rural market.

Total telephone subscribers in the country as of January 2009 stood at 400.04 million, out of which only 27.6 per cent constituted rural subscribers whereas 70 per cent of the country's population lived in villages.

As of December 2008, the rural teledensity stood at 12.59 against urban teledensity of 81.38, TRAI said in a release.

The USOF subsidy has also not spurred the investments in rural areas to the desired level. There are still a number of constraints which are required to be addressed to encourage the telecom service providers to move to these apparently less lucrative markets, it said.

The salient points of the recommendations are:

The Universal Service Obligation Fund (USOF) be administered by a separate authority other than the Department of Telecom and that the administratoar be empowered effectively in terms of administrative, financial powers and ultimate decision making.

The USO Fund Act/ Rule should be so amended that the funds accruing to USOF through levy is directly managed by the organisation and is not routed through the budgetary process of the union government.

The USOF should follow the bidding process only where it is necessary and it should concentrate primarily on planning and monitoring of the implementation of the scheme.

The USOF should determine the subsidy support for setting up mobile towers in different regions and any IP-I/CMTS/UASL operator, who sets up the tower in the designated SDCAs and share it, should be paid subsidy depending on the number of operators sharing the tower.

TRAI reiterated its earlier recommendations of charging a reduced USO levy of 3 per cent on covering 75 per cent of the development blocks including villages in a licensed service area.

The development of local content needs to be area specific and should address the local and immediate needs of the people.

The USOF may devise a scheme to call expression of interest from IP-I/NLD/UAS licensees to provide optical fibre from the USOF subsidised towers to nearest block headquarter. USOF shall give subsidy of maximum Rs1 lakh per km per sharing (to be distributed over a period of three years) provided it shares it with at least one access service provider.

The payments for subsidy claims shall be made in a certain time frame based on the self certifications of the service providers.

USOF may device a scheme / agreement with state governments in which broadband connection are facilitated by USOF while state government would assure fixed number of broadband connections for government offices/ public places such as hospitals /schools etc.

An amendment is recommended in section 10 of the Indian Telegraph Act, 1885 to curtail delay in obtaining right of way permission.

For VSATs clearances, DoT should prescribe strict timelines and also simplify the procedures with emphasis on automatic clearances in case of non critical approvals. TRAI further recommended that the charges for VSATs (except transponder charges) may be borne by USOF initially for a period of three years for all the VSATs installed in rural areas.

TRAI also suggested that the USOF administrator negotiate with the Department of Post so as to facilitate sales of telecom services, bill collection, subscriber verification, bringing in new subscribers, etc.

It also suggested the setting up of a pilot scheme for a duration of 3-6 months in each state for gaining experience.