Rural telephony: DoT hangs up on sops sans bidding plan

The department of telecommunications has done a volte face and gone back on a proposal to provide subsidy without a bidding process for setting up rural infrastructure for telecom operators.

Prior to a meeting with the department of telecommunications (DoT) last Friday, the telecom operators opted for a model where the government would provide funds to set up active (base tower stations and power) and passive (land and towers) infrastructure without bidding. The operators opted for the model from the five models placed before them by DoT.

As per the proposal, a maximum of three operators could use a tower which was to be erected through support from the Universal Service Obligation Fund. The model, however, required Trai to step in to work out a pre-determined fixed subsidy for putting the infrastructure in place.

During the meeting, however, DoT officials said the government would not be able to extend support without a bidding process, executives of GSM and CDMA operators who attended the meeting told Business Standard.

When contacted, DoT officials said the government was unable to go ahead with the proposal as the Centre could not extend any assistance without following a proper bidding process.

The impact of the ongoing tussle between the Ministry for Communications and the Telecom Regulatory Authority of India (Trai) has been felt on the talks between telecom operators and the government over infrastructure sharing in rural India.

The industry sees the DoT's U-turn as another move by the government to keep the regulator out of the loop.

"The opposition from DoT was because the Trai was to determine the (quantum of) fixed subsidy. Unlike the other four models, this was the only model free of the bidding process," said an executive who was present at the meeting.

In September, the DoT had sought to clip the regulator's powers and had also proposed to invoke Section 25 of the Trai Act, which gave the government the power to issue directives to the regulator on policy issues. The Prime Minister's Office had intervened and advised the DoT to seek Trai's opinion before issuing any policy direction.

The DoT, however, has successfully kept the regulator out of the loop on its proposed OneIndia policy and also on the recent relaxation in the national and international long distance licences, the Universal Access Service Licence, the Internet Protocol Licence and the VSAT licence.

The DoT has also informed operators that the focus of infrastructure sharing would be entirely on rural areas, and 5,161 towns and cities would be excluded from the purview of the proposed support. Under model A, the government had said it would extend support for only passive infrastructure based on a system of bidding.

Under the second model, the DoT had proposed support for both active and passive infrastructure with bidding. The proposal under model C involved government support to private players for active infrastructure, where operators would have to bid for individual towers in specified "difficult areas".

Yet another option was to provide support for any telecom service licencee for passive infrastructure after a bidding system.

WRONG NUMBER

Telecom operators had opted for the only non-bid model where the government was to provide funds to set up active and passive infrastructure

Under the second model, the government was to extend support for passive infrastructure based on bidding

Under the third model, DoT had proposed support for active and passive infrastructure with bidding

Fourth model involved government support for active infrastructure

Fifth option was to provide support for any telecom service licencee for passive infrastructure after a bidding