What has been the USO Fund’s role in expediting rural telecom service roll-out in the past few years?

The USO Fund was launched in 2002 with the objective of providing universal telecom services. In 2001, the mobile industry was in its infancy and telecom services had not penetrated rural markets. It was at this time that rural telephony was identified as a key focus area and we launched the concept of village public telephones (VPTs) in these regions.

Despite the introduction of VPTs and telephone exchanges, telecom services failed to pick up in these regions. Therefore, the USO Fund stepped in to provide individual telephone lines to rural users. The next step for us was to move towards introducing the concept of shared mobile infrastructure. In certain ways, this transformed telecom services in rural areas. This was the time when mobile telephony was gaining popularity and we felt that since these services provided an affordable way of communicating, their reach should be extended to rural India as well.

The shared mobile infrastructure model was introduced with this objective. It required mobile operators to establish their own transmission stations. Through this model, the USO Fund undertook an exercise to identify the most accurate methods of covering rural India. About 7,500 sites were identified for establishing transmission stations and other secondary infrastructure.

About 99 per cent of telecom towers have been constructed as part of the shared mobile infrastructure initiative. However, telecom equipment has been provided at only two-thirds of these sites.

The next phase of telecom growth is related to the internet segment. Initially, the telecom infrastructure in villages comprised copper wire-based networks, which did not have high transmission capacities. Data transmission rates offered by the infrastructure were not sufficient to provide internet access. We had to match this infrastructure with that available in urban areas and, therefore, an optic fibre cable (OFC)-based network was selected as the solution.

However, the existing OFC network had to be extended to regions like the Northeast and Jammu & Kashmir and connected at the district and block levels in villages. To achieve this, the USO Fund implemented two projects under the concept of viability gap funding.

The first initiative covered Assam, Meghalaya, Tripura and Mizoram, which were categorised as the Northeast (NE) I circle. The second project covered Arunachal Pradesh, Manipur and Nagaland, collectively known as the NE II circle.

Bharat Sanchar Nigam Limited (BSNL) implemented the project in the NE I circle, while RailTel executed the one in the NE II circle. Currently, survey work is in progress in both the circles.

Voice services in the country have grown at a phenomenal rate, while data services have lagged behind. There is a demand for the internet in villages, but the physical infrastructure to provide these services is absent.

In this context, the USO Fund aims to facilitate the development of infrastructure to provide broadband services in villages, which would promote services like e-learning and e-commerce. It is with this objective that the development of the NOFN was approved by the government on October 25, 2011. Through the project, the government aims to provide broadband access to 600,000 villages, covering 250,000 gram panchayats. The plan is to lay an additional fibre network from the block level to the gram panchayats.

Net, net, the Department of Telecommunications is planning to provide a common network for the entire telecom sector. The assets required to set up the infrastructure would be owned by operators. Bharat Broadband Network Limited will implement the project.

Meanwhile, various government departments have proposed innovative ideas to utilise the OFC network developed under the NOFN project. Implementing these ideas is going to be the cornerstone of the project.

How will the National Telecom Policy (NTP), 2012 help in achieving the government’s rural broadband targets?

The NTP, 2012 aims to provide 600 million broadband connections by 2020. An OFC network is the basic infrastructure that is being developed to provide a broadband network. This needs to be viewed in tandem with other networks and technologies, including 3G and 4G, to ensure that broadband reaches every consumer.

Which factors are slowing down broadband growth in the country?

Going forward, a large number of users are going to access the internet through wireless technologies. The affordability of devices becomes a key factor in this context. Smartphones, laptops and tablets need to be made available at affordable prices to promote their mass adoption. Most importantly, 24x7 availability of power in rural areas is crucial for broadband access. Innovative solutions are urgently required to address this issue. For example, if rural users have a data card or a smartphone, they can access the internet easily as such devices consume less power.

What role will the USO Fund play in establishing and operating the NOFN?

The USO Fund is financing the project. We receive funds from operators as levies, which are partly assigned to the project. Annually, we receive over Rs 60 billion of funds from telecom service providers.

How can the USO Fund be utilised more efficiently?

As of 2011-12, the USO Fund had a corpus of Rs 218 billion. The utilisation of these funds for the Rs 220 billion NOFN project will ensure that the available resources are optimised.

What are the USO Fund’s immediate plans and goals?

The USO Fund’s primary focus is on completing a pilot project which is being implemented under the NOFN initiative. As part of this project, we have identified various blocks in Ajmer, Visakhapatnam and Tripura. Over the next three to four months, BSNL, RailTel and Power Grid Corporation of India Limited, which would execute the NOFN project, will establish an OFC network in these areas. Also, these entities will take note of the disparities between the projects. This will enable us to identify the challenges associated with and the strengths of projects, and determine appropriate methods for upgrading broadband services that are to be provided.

What are the challenges associated with increasing teledensity in semi-urban and rural areas?

The term teledensity refers to the number of phones available in the country and is not the correct yardstick to measure telecom service coverage. The USO Fund is more focused on service coverage. For example, users might have two to three handsets, but this is not an accurate measure of the availability of services to them. Also, service coverage does not indicate or signify uniformity. The main challenge for the USO Fund is to ensure that telecom services cover every nook and corner of the country.

An increase in service coverage would ensure teledensity growth, and we hope that the NOFN will help in increasing teledensity across the country.

What is the likely competitive landscape for rural areas going forward?

Telecom infrastructure upgradation alone will not be enough for increasing the reach and penetration of broadband. Devices needed to access the internet will have to become affordable.

Moreover, handset vendors should look at launching smartphones at sub-Rs 5,000, along with affordable laptops and netbooks. These devices have to be made available at prices below Rs 7,000. Several states are providing laptops to students, but such examples are rare. There is an urgent need for these states to collaborate with the central government to ensure an equitable distribution of affordable devices.

Also, relevant content in local languages will drive smartphone uptake. Content developers should look to launch applications in local languages.

Consumers must also be trained to use IT services. Various government departments are working towards this goal.