RURAL TELEPHONY: Will, not Policy Is Needed

The government, acting on TRAI recommendation, has finally come up with a
policy for the implementation of Universal Service Support. It has been decided
to extend support to the Universal Service from the financial year 2002-03. The
government has also mandated that Universal Service Levy shall be spent in rural
and remote areas on both the public access telephones or community telephones
meant for public use and individual household telephones in net high-cost
rural/remote areas. The support from Universal Service Fund will be provided to
meet net cost (cost minus revenue) of providing the universal service.

For installation of VPTs in the 6,07,491 villages, identified as per 1991
census, which were required to be covered by 31 March, 2002, no reimbursement
towards capital recovery shall be admissible and given. However, the net cost
towards operating expenses of these VPTs will be reimbursed. For the remaining
villages, i.e. additional revenue villages identified as per the 2001 census,
the net cost towards both, the annual capital recovery as well as annual
operating expenses will be allowed as a support from the USF. The guideline
wants to achieve something more than mere provisioning of VPTs.

Minister for communication Pramod Mahajan recently announced that the license
of private operators would be cancelled if they did not meet the VPT targets. It
may be mentioned that most of the private companies have missed their targets.
Some have not even provided a single connection in villages. Earlier, the
government had constituted a special cell for facilitating interaction with
basic private operators for meeting the targets. Out of 97,806 VPTs targeted,
the private operators actually provided only 644 in December 2001. According to
SC Khanna, the secretary general of ABTO, basic operators feel hurt due to the
release of funds to BSNL for fulfilling rural telephony obligations and not to
them. According to Khanna, the targets for VPT has been reduced by the ministry
and made more realistic. Khanna, opining about the USO fund says, "We
strongly object to the USO fund being managed by DoT. There should be a separate
management of the fund under the supervision of TRAI."

When asked whether BSNL is going to move out of rural telephony, DPS Seth,
former CMD, BSNL, said, "There is no question of our getting out of rural
telephony. There is money that people want to spend in the rural areas on access
to information and to that extent there is a need for rural telephony. But if
you go just by the voice usage it is not remunerative and for that purpose there
has to be a compensation provided by the government." The government,
according to reports, has asked BSNL to take over the unfulfilled target of
private telecom operators for providing connections in villages for lack of
investment in rural telephony. The private operators have welcomed this
decision.

Somehow, operators have not been able to sell the idea of franchising their
last-mile operation to rural entrepreneurs to provide services, though the
license allows it. A serious effort has to be made on this front. Bangladesh’s
Grameen Phone has been the most talked about success story of rural telephony.
The village operators there made an average of $2 a day, or $700 a year, after
covering all costs. The myth that there exists no demand for such services was
also shattered when it was found that there was a substantial demand for
personal communications between villages, and between villages and cities as
well as for information about prices in the centers of commerce.

Now that the issue of WLL has almost been settled on the assumption of
providing affordable connectivity and faster rollout in rural areas, all basic
operators have to live up to the expectations and leverage the technology that
they have been championing for quite some time. In the end, the entire issue of
rural telephony has to be resolved amicably between the incumbent and the
private operators without much delay if the ambitious targets have to be met.

Sudesh Prasad