BSNL has opposed the concept of niche operator as proposed by Trai for pushing rural telecom connectivity. "The concept of a niche operator is beyond the scope of NTP-99. It is not a commercially viable proposition in a sector where competition is intense, and where volume alone drives the cost to make services competitive and commercially viable," BSNL said in a representation to the telecom regulator, which had sought opinions on the matter from stakeholders. "Without any substantial volume in the services offered by the provider, there is no scope for survival of the so-called niche operator. Since the potential in these SDCAs (short distance calling area that is equivalent to a district) is very low and the demand is scattered, it is not possible for small niche operators at the SDCA level to sustain operations in an era of unlimited competition. Secondly, BSNL is already present in all SDCAs in the country", it said. The PSU strongly objected to the concept, saying the niche operator would not make any investment in low and scattered demand areas and thus sought the support from USO funds to supplement its expansion plans for the rural areas. BSNL has sought continuation of ADC, a levy paid by private operators to enable the PSU to undertake rural roll-out. BSNL is contributing 5% of its revenue - amounting to about Rs 1,500 crore a year - towards the USO fund. "BSNL should be allowed to retain this money so that it can be utilised in rural and backward areas for expansion of telecom services," it said. Trai had sought opinions from stakeholders on niche operators who would be introduced in rural areas where the tele-density is less than 1%.The regulator has proposed that the licence/registration and spectrum fee for these operators will be nil, although they will be expected to pay an annual charge of 6% (administrative charges + contribution towards USO).
