Naxal-hit areas: BSNL gets more funding flexibility

As most of the towers will be installed in rural, hilly and forest areas, they may not be viable even after 5 years

The government is likely to use the Universal Service Obligation Fund (USOF) to support Bharat Sanchar Nigam Limited (BSNL)’s operating expenses towards mobile towers in areas affected by Left-wing extremism, even after the first five years.

According to a recent communiqué by the Ministry of Home Affairs, as most of the towers would be installed in rural, hilly and forest areas, these might not be commercially viable after five years. The ministry has recommended USOF support for operating expenses be extended after reviewing the commercial viability of these towers after every five years.

It is estimated BSNL would require Rs 1,469 crore as capital expenditure to set up 1,836 towers and Rs 1,577crore as operating expenses to manage the sites for five years.

The government has already said BSNL would be provided the entire amount through USFO. The fund is used to subsidise telecom infrastructure in rural India. It also supports the development of new products and services to improve broadband connectivity. The fund is built with a share of the revenues of private telecom companies.

Earlier, the Planning Commission had told the Department of Telecommunications the ministry should restrict USOF support to state-run telecom companies to Rs 3,046.12 crore, the revised estimate for reimbursing capital expenditure and operating expenditure to BSNL for installing and managing the mobile towers in Left-wing extremism-affected areas.

According to home ministry estimates, about 56,000 inhabited villages aren’t covered by telecom service providers. Of these, 2,199 are in the nine states of Andhra Pradesh, Bihar, Chhattisgarh, Jharkhand, Maharashtra, Madhya Pradesh, Odisha, Uttar Pradesh and West Bengal—all affected by Left-wing extremism.

BSNL would have three months to install mobile towers in the regions hit most by such extremism, the Ministry of Home Affairs had said recently. These regions include Chhattisgarh, Jharkhand, Bihar, Odisha and the Gadchiroli district of Maharashtra. The small timeframe is due to the urgent requirement of mobile towers in these areas. After Cabinet approval, BSNL would get six months to install mobile towers in all Left wing-affected areas.

It has already been proposed USOF would be used in the award of work to BSNL on a nomination basis, waiving the requirement for the open bidding process.
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• BSNL would require Rs 1,469 cr as capital expenditure to set up 1,836 towers and Rs 1,577 cr as operating expenses to manage the sites for five years
• Government has already decided that BSNL would be provided the entire amount through Universal Service Obligation Fund (USOF)
• Planning Commission had told DoT that the ministry should restrict USOF support to state-run telecom companies to Rs 3,046.12 cr