The Universal Service Obligation Fund (USOF) has promised a sum of US$490 million to enhance Mobile phone coverage in rural India.
This venture, reported to have been approved by Telecom Commission will increase mobile coverage to around 56,000 villages, including those along the Bangladesh and Chinese borders where coverage has sometimes been restricted due to security issues.
“The project will involve the rollout of nearly 20,000 towers, and the USOF will take a call on whether to extend viability gap funding (VGF) or subsidise both capex or opex elements of the project since private operators are averse to investing in mobile coverage in these regions,” said a senior DoT official.
The Telecom Commission, the highest decision-making body in the communications ministry, is likely to advocate 100% financing of such mobile rollouts by the Universal Service Obligation Fund (USOF), which sponsors telecom infrastructure in rural India, especially since private operators are unwilling to provide coverage in these regions, claiming that there is no business case.
India’s USOF is based on a levy on the mobile networks equivalent to 5 percent of their annual revenues and has been building up since 2002. It has come under recent criticism from the GSMA though, as the fund now has a surplus of around US$4 billion that has not been spent.
USOF administrator N Ravi Shankar will meet all telecom operators on July 8 to get a fix on the scale of this mobile project, especially since several thousands of these villages are in remote, inhospitable, mountainous terrain. Senior representatives of C-DoT will also attend the meeting since the telecom research agency is a technology advisor to the government for this project.
This exercise is said to take shape by March next year.