Govt against bids for allotting rural mobile towers

The government has decided against allotting 11,000 mobile towers for rural areas through open bids.

These towers will be offered in the second phase of a scheme, launched in July this year, to provide subsidy to companies who want to build towers in various clusters and run mobile services in rural areas.

Sources said in this phase, the subsidy would be paid on the basis of the representative rate that emerged after the service providers bid for over 7,800 towers in 27 states in the first phase of the scheme.

Companies like BSNL, Reliance, Vodafone-Essar and GTL Infrastructure had won contracts by bidding for the lowest subsidy amount.

The Universal Service Obligation (USO) Fund, under which the operators pay a part of their revenues to the fund to promote telecom services in rural India, manages the scheme.

The Fund has promised to provide subsidy to operators in over 500 districts for setting up and managing the tower infrastructure for mobile services.

The offer is divided into two parts "" bidding for passive infrastructure (towers) and active infrastructure (for electronics and running the services) for three operators. Operators who bid for the minimum subsidy amount get the contract.

However, with telecom companies keen to expand in rural India, for many areas, they quoted a negative subsidy, that is agreed to pay the government instead.

In the second phase, the government has decided that all infrastructure providers and telecom operators, irrespective of whether they bid in the first phase, will be eligible.

Under the new guidelines, the company has to set up infrastructure within one year from the date of singing the agreement. No subsidy would be paid if the deadline was not met, said a source.

Under this phase, subsidy would be paid in a phased manner "" 40 per cent after the commissioning of the tower and sharing of infrastructure by the three operators and the remaining after one year of the signing of the agreement, in quarterly installments over the next three years.