The Federation of Indian Chambers of Commerce and Industry's (Ficci) Task Force Report on telecommunications and infotech has suggested a 10-year income tax holiday for investments made by private basic telecom service providers in rural areas.
Venturing into village public telephones or VPTs is highly unprofitable for private basic telecom service providers, the mandatory stipulations imposed by the VPT Agreement, notwithstanding. (The private sector should implement 10 per cent of their connectivity to villages under the VPT Agreement). The main reason behind this is that on an average, only three telephone calls are made in a week from a typical village. This despite the fact that a call made from a village PCO costs only 60 paise, as compared to Re 1.20 in cities. Compare this with the capital cost _ Rs 50,000 per telephone connection in rural areas and Rs 80,000 for providing a village public telephone.
And the need for linking rural India with communications facilities can't be undermined. For it could lead to a digital divide between the urban and rural areas.
Ficci has suggested other measures that can be used to enlarge the village telecom market and to make rural telecom profitable. Some of its important suggestions include converging the VPT networks and services with IT and Internet technologies. This would make the VPTs village communication centres. From these centres, the farmers should be able to get the going rates of their farm produce and other such information available on the Internet that is useful to them. Since most rural users have low paying capacity, facilities like `call collect' can be used in rural areas to encourage telecom traffic from rural areas.
