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Rural Tele-density

The special scheme envisaged by the Telecom Regulatory Authority of India to boost rural tele-density is financially realisable. The revenue accruing to the government from telecom services is huge and what is required for boosting tele-density is just a fraction of this amount. Radio base stations can be put up all over the country and connected to mobile switching centres, as in the cellular mobile telephony networks. Any person can buy a mobile telephone instrument and obtain a SIM card from a service provider to get connected.

Rural Tele-density

The special scheme envisaged by the Telecom Regulatory Authority of India to boost rural tele-density is financially realisable. The revenue accruing to the government from telecom services is huge and what is required for boosting tele-density is just a fraction of this amount. Radio base stations can be put up all over the country and connected to mobile switching centres, as in the cellular mobile telephony networks. Any person can buy a mobile telephone instrument and obtain a SIM card from a

service provider to get connected.

T H CHOWDARY

T
he Telecom Regulatory Authority of India (TRAI) has come out with a recommendation that by investing Rs 8,000 crore, rural tele-density can be increased to narrow the gap with urban tele-density. This is a good idea but it is worth recalling that just like for the last 50 years, every five-year plan was declared to be specially aimed at rural development and poverty eradication, the Department of Telecommunications (DoT) (BSNL and MTNL are its corporations now) always had a special plan for rural telephony. The DoT has done a reasonably good job by progressively equipping almost every village in the country with at least one public telephone (PT) and by installing electronic exchanges in rural areas. It extended national subscriber dialling (NSD) and international subscriber dialling (ISD) to rural users.

We have held that radio and TV broadcasting are promotive of social good, and therefore, over a period of time, the government’s policies accomplished the laudable objective of the entire inhabited territory of India being covered with both radio and TV broadcast signals. Appropriate technologies and systems including communications satellites and VSATs have been used for achieving this coverage. In the past few years, wireless technology and systems have evolved so that it is no longer necessary that there should be cables and overhead wires for telephone instruments to be connected to the telecom network. The cellular mobile radio system is one such example. National coverage for radio and TV broadcasts had been achieved by putting a large number of radio and TV broadcast transmitters over the entire territory of India in the required numbers. Similarly, we can put up radio base stations (RBSs) all over the country and connect them to mobile switching centres (MSCs) just like in the cellular mobile telephony networks. When once such a network of RBSs is established, any person can buy a mobile telephone instrument from a vendor (akin to buying a radio or TV set) and get a subscriber identity module (SIM) card from a telephone service provider just like at present. It is like buying a refrigerator or a water pump and plugging into the electricity network. Today, private telephone companies are putting up radio base stations in urban areas on priority because it is from there that they get a large number of subscribers and also a high per subscriber revenue. Because they do not cover the entire territory which is overwhelmingly rural, those who can afford

Economic and Political Weekly February 4, 2006 it and want a telephone in the rural areas are not getting served. It is here that public interest and the state’s role enter the picture.

Radio technology now enables a radio base station to give good signal strength for up to a radius of at least 10 km in rural areas, characterised by single, at best twostoreyed buildings. The territorial area of India is 3.3 mn sq km. About 25 per cent of it is forest and desert with hardly any inhabitants. For the 75 per cent, that is, about 2.5 mn sq km, the number of radio base stations required to give a satisfactory signal strength is 8,000. Each radio base station currently costs about Rs 4 million. Therefore the total investment required to put up all the radio base stations necessary to give radio coverage just like for radio and TV broadcasting comes to Rs 3,200 crore. These radio base stations require to be connected to the all India network. The most extensive is that of BSNL. Of course, in the next few years, its competitors will also have as extensive a network. The cost of connecting all the radio base stations designed for total rural area coverage to the nearest broadband backbone network of the public telephone system (mobile or wireline) will come to about Rs 5,000 crore at the most. Therefore, the total investment to provide a radio and TV broadcast type of signal strength for the telephone network is Rs 8,200 crore.

Under the universal service fund (USF) scheme, all our telephone companies are required to contribute 5 per cent of their revenues into that fund. Currently, the total telecom revenues of all the companies including BSNL/MTNL are over Rs 80,000 crore per year, 5 per cent of which is Rs 4,000 crore. In the last few years, by way of entry fees and revenue share, the telephone companies have contributed to the exchequer over Rs 20,000 crore. Nothing of this amount has been used for telecom development, much less for rural telecom development. It can be seen from these figures that the special scheme envisaged by TRAI for boosting rural teledensity is quite easily financially realisable. The scheme can be implemented within two years by utilising the USF and a part of the amount that the government has collected by way of revenue share and entry fees for the telcos. We may also point out that government has been collecting a service tax on telephone bills at the rate of 10 per cent which currently amounts to over Rs 7,000 crore. Therefore, the amounts accruing to the government from telecom services are huge and what is required for boosting tele-density is only a fraction of them. What is therefore needed is sincerity and seriousness, not merely lip service to the growth of rural tele-density and its affordability for the not so rich.

The communications minister is saying that a decision will be taken on spectrum allocation for 3G services “very soon”. Should 3G services be treated as new services or the extension of existing radiobased services, whether that radio technology is GSM or CDMA? The answer is simple. We should be technologyneutral. What 3G requires is not new technology but just additional bandwidth in new bands. Somebody who suggests that Rs 1,500 crore should be the entry fee for 3G services licensees is absolutely wrong. This is a hang-over of the permitlicence-quota mentality and the view that telephone services should be used to raise revenues for government (to be spent for non-telecom purposes). If telephones are to be affordable to ever larger sections of people no costs which are not related to

INSTITUTE OF CHINESE STUDIES (ICS) Centre for the Study of Developing Societies Delhi

Project on “Liberalization and the Challenges of Governance in a Comparative Asian Perspective”

The Institute of Chinese Studies, CSDS, Delhi invites proposals for activities within the framework of its research project on “Liberalization and the Challenges of Governance in a Comparative Asian Perspective”, supported by the Ford Foundation. The Project focuses on two interrelated issues of governance that are consequent on the emerging regimes of economic liberalization and globalization in India and China:

  • 1. The state’s capacity to redistribute resources to ensure equitable regional and social development and effective social protection; and
  • 2. The state’s capacity to respond constructively to demands for democracy and to movements of regional, ethnic and religious assertion.
  • The following four types of activities would be supported under this head: (i) research proposals involving fieldwork in China; (ii) proposals for Senior and Junior scholars to affiliate with the ICS as Visiting Fellows for periods of 2 weeks to 4 months to conduct comparative studies on aspects of liberalization and governance in India and China;

    (iii) proposals for conducting comparative India-China Seminars within the scope of the project; and (iv) proposals for collaborative research with scholars and institutions in the People’s Republic of China.

    Applications, including the bio-data of the researcher and a project outline, should reach the Director, Institute of Chinese Studies, Centre for the Study of Developing Societies, 29 Rajpur Road, Delhi 110054, by 1 March 2006 in the first instance. (A further round of applications will be received by 1 May 2006.

    Further information both programmes may be obtained from the ICS office (29 Rajpur Road, Delhi 110054, email: ics@ndf.vsnl.net.in) and from the ICS website: www.icsin.org.

    DIRECTOR, ICS

    Economic and Political Weekly February 4, 2006

    the establishment and operation of the whether it be entry fee or revenue share telephone network should be imposed. If or high spectrum charge, is regressive and our aim is to increase tele-density very protective of vested interests only. rapidly and also to narrow the gap between rural and urban tele-densities, every impost, Email: hanuman.chowdary@tcs.com

    EPW

    Economic and Political Weekly February 4, 2006

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