Papers on rural telephony next week: Trai chief

The Telecom Regulatory Authority of India (Trai) will release three consultation papers on Monday on promoting telecom services in rural areas.

One of these would seek public views on whether the Acess Deficit Charge (ADC) should be merged with the Universal Service Obligation (USO) fund while the second will seek views on optimum utilisation of the ADC revenue.

The third would seek views on whether the USO fund should be allowed to lapse this year, as scheduled

"The rural penetration is about 7-8 per cent while the urban penetration is 50 per cent. This wide gap needs to be bridged. We are looking at various ways to ensure this," Trai Chairman Nripendra Misra said here.

Though the government has taken various initiatives to increase rural penetration and to make available telecom services to the rural masses, the efforts have had a limited success.

The major concern is huge capital investment with less remunerative returns. Therefore, in 2002, the government announced the USO policy under which telecom service providers (except pure value-added service providers) were asked to contribute 5 per cent of their adjusted gross revenue (AGR) toward this fund.

This fund provides resources for development of telecom services in rural and far-flung areas.

At present, the USO fund collection is Rs 14,000 crore, of which Rs 5,600 crore have been utilised. Trai will publish a report this year giving details of the project-wise utilisation of the USO fund.

According to Misra, rural teledensity is low in India because of lack of need-based surveys of the usage pattern and the needs of the consumers in rural areas.

"Upfront payment is difficult for rural consumers. Any user has to make an initial payment of Rs 500 to Rs 1,000 in getting a mobile connection. So, Trai is exploring the possibility of a reduction of initial tariff for the rural population. Unless this is done, the teledensity in rural areas cannot catch up," said Misra.

Trai will also seek public opinion to figure out how the ADC savings can be used in determining future tariff rates.

The ADC is the amount payable by the service provider at the caller's end to the service provider at the receiving end for accessing services rendered by the latter in domestic long distance telephony. This would be a means to subsidise the below-cost tariffs.