DoT mulls entrepreneurship development centre

To promote new technological developments in rural and remote areas, the Department of Telecommunications (DoT), is planning to set up a telecom entrepreneurship development centre (TEDC) in a public-private partnership mode.

TEDC is proposed to be a collaborative effort between universal service obligation (USO) fund and IIM Ahmedabad’s Centre for Innovation Incubation and Entrepreneurship (CIIE) and IIMA Idea Telecom Centre of Excellence, with support from other leading engineering and research institutes in the country.

Initially, it would start as an effort between government/semi-government agencies, but it would closely engage with private stakeholders like operators, equipment and handset manufacturers, an internal note by DoT said.

An amount of Rs 125 crore over the next five years would be required for creation and smooth running of TEDC, and India Telecom Innovation Fund, a venture fund, would be registered with the Securities and Exchange Board of India.

Almost half of the above amount would be raised from private stakeholders as equity investment, the note said. The rest would come from the Universal Service Obligation fund.

Telecom operators contribute a part of their revenues to the USO fund, used for offering telecom services in rural and remote areas.

The investment into the telecom innovation fund would be an equity investment and would give the USO fund returns, once the companies become successful.

The note has now been put up before Telecom Commission, the policy making wing of the department, for the approval.

“TEDC aims at providing conducive environment — necessary technical and financial infrastructure and support for early stage telecom startups aimed at creating solutions for rural India. The goal is to build at least 20 innovative and successful enterprises within next five years,” it said.

The telephone penetration in rural areas is still the lowest in the world, despite tremendous growth in the telecom sector during the last decade. Lack of innovation and entrepreneurship are the main reasons behind this, the department noted.