The Telecom Regulatory Authority of India (TRAI) has suggested a change in direction of the current policy initiatives to boost phone use in rural areas. In its recommendations, it said the present policy would make a marginal difference in teledensity, which stood at just two phones per hundred population in rural areas.
Criticising the Universal Service Obligation policy, TRAI said subsidising individual replacement of rural phones would "barely be able to achieve teledensity targets of four per cent by 2010 even after giving huge subsidy support of around Rs. 30,000 crores."
Therefore, there was a need for a re-look at the traditional policies. "A time has come that our policies of reaching telecom to villages are looked as a Universal Service Opportunity rather than a Universal Service Obligation. The time is ripe for such a changeover," it observed.
TRAI pointed out some features of the Indian rural market substantial purchasing power if the price was right, the expansion of broadband/Internet services provided by Indian corporates and the immense popularity of cable TV, to an extent that such connections were far in excess of fixed line telephones. The proposed policy should look at this feature and encourage triple-play networks. This could be facilitated by a Unified Licensing Regime, already recommended by TRAI to the Government.
It recommended an alternative approach of facilitating network infrastructure expansion. This would offer financial incentives to service providers in the form of coverage of partial cost of shared infrastructure and reduction of license fee and spectrum charge based on the number of rural base station locations.
If the proposed scheme was implemented early, then TRAI's experience with regard to mobile growth in urban areas indicated that India would achieve rural teledensity of around 15 per cent by the end of 2007.
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