Draft tender for rural telephony funds use ready

The country is finally set to see some action on the estimated Rs 7,000 crore of the unutilised Universal Service Obligation Fund (USOF).

The department of telecom (DoT) has finalised draft tender which details how the USOF levy will be used to fund operators' telecom infrastructure in rural areas, through a bidding process.

The draft for the tender is slated to be shared with operators next week. The final tenders for the bids are likely to be announced in May this year. All telecom companies pay 5 per cent of their adjusted gross revenues towards the USOF, which is used for building telecom infrastructure in rural India.

According to government sources, the key element of the draft tender is that the USOF will be used to support both passive (land, tower and power back-up) and active (base transceiver station, antennae and a portion of the backhaul) infrastructure, which would then have to be shared among operators.

However, operators may have to make separate bids for the two. In addition to allowing private operators to bid, the draft also proposed to permit stand-alone infrastructure providers to participate in the bidding process, but only for setting up passive infrastructure, sources added.

According to data complied by the DoT up to January 2006, the government had collected about Rs 9,708.87 crore through the USOF levy, but had disbursed only Rs 3216.31 crore to various operators.

Of the Rs 3212.16 crore that has been disbursed so far, BSNL accounts for Rs 3200.72 crore, which is over 99 per cent of the allocation, followed by Reliance Infocomm at Rs 7.53 crore, Tata Teleservices at Rs 6.91 crore and Bharti at Rs 0.44 crore.

Industry sources said that the draft was likely to propose that bids be invited for every secondary switching area on a per-tower basis. It would also state that the towers and land would be jointly owned by the government and the successful bidder.