Trai wants Rs 8,000 cr subsidy for pvt parties

The Telecom Regulatory Authority of India (Trai) today recommended a subsidy of Rs 8,000 crore to all access service providers contributing to the Universal Service Obligation Fund.

This means that private players will now be eligible for government support as all operators give 5 per cent of their aggregate gross revenue to the USO Fund to finance rural connectivity.

Under the present policy, only Bharat Sanchar Nigam Ltd is eligible for USO support for providing basic phone services. The Trai also suggested that niche operators be allowed to provide services in areas with less than 1 per cent teledensity. These operators are proposed to be brought under the USO's ambit and given exemption from spectrum charges.

The regulator also proposed that the government do away with its present subsidies policy, which was based on the number of basic connections.

Instead, it recommended a focus on network expansion for mobile services, infrastructure-sharing, reduction in annual licence fee and spectrum charges for rural coverage, and delicencing of spectrum for WiFi and WiMax applications.

"If the present USO Policy of subsidising individual connections continues, it is expected that we will achieve rural tele-density of only around 3 per cent, even after giving huge subsidies of around Rs 30,000 crore. Neither such low tele-density in rural areas nor such high subsidies to achieve so little can be acceptable," Trai Chairman Pradip Baijal said.

"If the proposed scheme is soon implemented, it is expected that we will achieve the rural tele-density of around 15 per cent by December 2007. This, combined with the expected urban tele-density of around 43 per cent, will take the overall tele-density to 22.98 per cent, easily meeting the target of 250 million subscribers," Baijal added.

At present, mobile services do not come under the ambit of USO support. But, the regulator said this could be achieved by defining basic services in cellular licence agreements in accordance with WTO definitions.

The regulator said through a USO Fund support of Rs 8,000 crores, "it will be possible to install 20,000 base stations and enable 80-90 per cent of rural population to have access to mobile services.

As per the recommendations, depending upon the number of rural base stations, operators must be given a discount in annual licence fee and spectrum charges.

Similar arrangements will be considered for rolling out infrastructure using other wireless technologies like WiFi, WiMax, corDect, and also wireline technologies like copper and optical fibre system.

The recommendations also included the sharing of government's e-governance infrastructure like all other telecommunications infrastructures.

This is to reduce the cost of rural connectivity, making it mandatory for those having optical fibre connectivity to provide leased lines to other players rolling out their networks in rural areas.