DoT expects Rs 5,000 crore investments under USOF

Private infrastructure companies are expected to invest Rs 4,500-5,000 crore for setting up over 11,000 base transceiver stations (BTS), under the second phase of the Universal Service Obligation Fund (USOF).

The investments will help in improving the tele-density in rural areas, which at present stands at only 4 per cent, compared with an all India average of 24 per cent.

However, the investment figure could come down depending on the subsidy that the Department of Telecommunications (DoT) will provide once it announces the second phase of USOF.

The second fund will be announced in a couple of months, with the DoT finalising all the details, sources in the telecom ministry said.

The telecom firms pay 5 per cent of their adjusted gross revenue (AGR) in the USOF, which is used to promote rural telephony by compensating telecom firms for their services in the rural areas.

On an average a tower in a village would require an investment in the range of Rs 30-35 lakh, while the expenses will soar depending on the terrain.

On a hilly terrain, the expenses will multiply further, while the towers put up on rooftops ""depending on the height of the building"" will bring down costs considerably, sources said.

Setting of towers will itself entail an investment of Rs 3,000-3,500 crore, and adding to it the expenses of generators and other equipment the total investment for setting up BTS will be Rs 4,500-5,000 crore.

The department's radio frequency planning committee has already finalised the position of the locations of the towers that are to be set up in semi-urban, remote and rural areas.

The DoT had also held meetings with infrastructure and service providers earlier this year, while it had sought suggestions and comments from the industry.