TRAI seeks infra firm, subsidy for rural phones | india | Hindustan Times
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TRAI seeks infra firm, subsidy for rural phones

The TRAI has suggested that an infrastructure company to improve telecom penetration in rural areas should be funded by the USO fund which is created from the revenues of telecom operators, reports HT Correspondent.

india Updated: Dec 16, 2008 22:23 IST
HT Correspondent

The Telecom Regulatory Authority of India (TRAI) has suggested that an infrastructure company to improve telecom penetration in rural areas should be funded by the universal service obligation (USO) fund which is created from the revenues of telecom operators. TRAI has also called for a subsidy on towers set up by operators in rural areas.

The company should set up optical fibre links throughout rural areas where the tele-density is low and offered free to the government, the regulator said in a consultation paper.

Even though the suggestions are only at consultation stage, these are of significance as this initiates the process of formulating policy guidelines for improving tele-density in rural areas.

Private players are not willing to invest in rural areas as the return on investment is very low on account of low average revenue per user (ARPU).

“Allowing subsidy to any service provider who installs the tower in the identified geographical areas and shares it with others,” said Nripendra Misra, chairman, TRAI.

The regulator has also said that even the handsets to be sold in the rural areas should be funded by the USO Fund. “USOF in consultation with DoT should devise a scheme for setting off the cost of the bundled handset provided to rural subscribers from the AGR (annual gross revenue),” the paper said.

The regulator has also suggested that the post offices should be used to promote telecom services. Post offices can function as sales outlets of telecom service providers and double as bill collection centres based on mutually agreed commissions, it said.

“The postman can be effectively used to educate the potential customers and first-time users about the uses and benefits of the Services being offered. There can be no better system for address verification and credit verification than the postal department and more specifically the postman himself,” TRAI said.