GSM may come under rural telephony fund

In an attempt to lower rural telephony costs, the Ministry of Communications and Information Technology is planning to bring GSM services under the Universal Service Obligation Fund (USOF).

If approved, GSM technology could challenge CDMA in providing connectivity in rural India.

The USO fund supports services such as operation and maintenance of village public telephones and provides provision for additional rural community phones.

The department of telecommunications (DoT), which is under the telecom ministry, will draft a Bill to bring in suitable amendments in the policy in order to make GSM technology admissible under the USO deployment.

The move gains importance after the unfruitful meeting between Qualcomm CEO Paul Jacobs and Telecom Minister Dayanidhi Maran on June 28, 2006.

The minister had informed Jacobs of the resentment among Indian CDMA operators over the high chipset costs and royalties payable to Qualcomm which are keeping the cost of rural penetration exorbitantly high.

"With the aim to provide rapid connectivity in rural areas, inclusion of cellular mobile services (CMS) is being considered in rural telephony plans. CMS has an edge over wired or fixed wireless services because of faster roll-out and lower cost per line," the ministry said in a notification.

Telecom industry analysts said earlier CMS took only CDMA under its purview, but in a recent notification the DoT had included GSM operations as well.

The new notification is targeted at inducting GSM also for rural operations, they said.

"A proposal is under active government consideration to provide support for shareable infrastructure to eligible providers of access and infrastructure services for CMS in rural and remote areas of the country. Consultations have been held with the access service providers, infrastructure providers, association of telecom service providers and manufacturers in this regard," the ministry notification said.