NEW DELHI: The Planning Commission has proposed that the government pay 20% of all mobile bills that are less than Rs 300 a month for customers in rural India by dipping into funds set aside for providing subsidized telephony.
The Planning Commission had sent the proposal to the Prime Minister's Office, which in turn has asked the telecoms department to study the feasibility of the proposal. The telecoms department must submit its response by 17 January and ET reviewed a copy of this communication.
The planning commission has also suggested that all rural customers who take up a mobile connection be given a one-time subsidy of Rs 250 from the Universal Service Obligation Fund (USOF).
All telcos pay 5% of their annual revenues towards the USOF, that is aimed at subsidizing rural telecom infrastructure and the unutilized amount in the corpus is estimated to be well over Rs 25,000 crore. The telecoms department has projected that this will increase to Rs 36,000 crore by 2013.
The Planning Commission has also pointed out that the USO levy has accumulated to a large corpus over the years and this could be used for providing direct subsidy to the amm aadmi.
Justifying the need for this subsidy, the planning commission has said that rural telecom penetration was only 30% despite the country witnessing a phenomenal expansion on mobile telephony. Its letter also highlights that 30% of the monthly bills of mobile customers go to the government in the form of various levies.
India has about 900 million cellphone connections of which a third are in rural India. According to telecoms regulator Trai, rural India had about 303 million cellphone connections at the end of November-2011 and a tele-density of 37%. In comparison, urban India had a tele-density of 167%.
Leading telcos said they were not aware of the proposal, but many operators pointed out that the industry had been demanding a reduction in the USO levy for years as the corpus is sufficient to subsidize the rollout of communications infrastructure in rural areas.
An executive with a leading telco said the telecoms department must discuss the proposal with the industry before submitting its reply to the PMO. This executive further added that abolishing this levy would lead to a 5% saving in mobile bills to all 900 million users in the country.
An executive with another telco said the industry had in the past suggested several initiatives to utalize the USO levy and these too must be considered along with the Planning Commission recommendation.
In October 2011, the Union Cabinet had cleared the 20,000-crore project to build a national broadband network to take high-speed internet to the hinterlands. Prior to that, the telecom commission, the apex decision making body of the department, had approved this project to build this network that would connect all the gram panchayats utilising the USOF. A similar amount of investment was likely from the private sector towards this initiative.....ET BUEREUA
The Planning Commission had sent the proposal to the Prime Minister's Office, which in turn has asked the telecoms department to study the feasibility of the proposal. The telecoms department must submit its response by 17 January and ET reviewed a copy of this communication.
The planning commission has also suggested that all rural customers who take up a mobile connection be given a one-time subsidy of Rs 250 from the Universal Service Obligation Fund (USOF).
All telcos pay 5% of their annual revenues towards the USOF, that is aimed at subsidizing rural telecom infrastructure and the unutilized amount in the corpus is estimated to be well over Rs 25,000 crore. The telecoms department has projected that this will increase to Rs 36,000 crore by 2013.
The Planning Commission has also pointed out that the USO levy has accumulated to a large corpus over the years and this could be used for providing direct subsidy to the amm aadmi.
Justifying the need for this subsidy, the planning commission has said that rural telecom penetration was only 30% despite the country witnessing a phenomenal expansion on mobile telephony. Its letter also highlights that 30% of the monthly bills of mobile customers go to the government in the form of various levies.
India has about 900 million cellphone connections of which a third are in rural India. According to telecoms regulator Trai, rural India had about 303 million cellphone connections at the end of November-2011 and a tele-density of 37%. In comparison, urban India had a tele-density of 167%.
Leading telcos said they were not aware of the proposal, but many operators pointed out that the industry had been demanding a reduction in the USO levy for years as the corpus is sufficient to subsidize the rollout of communications infrastructure in rural areas.
An executive with a leading telco said the telecoms department must discuss the proposal with the industry before submitting its reply to the PMO. This executive further added that abolishing this levy would lead to a 5% saving in mobile bills to all 900 million users in the country.
An executive with another telco said the industry had in the past suggested several initiatives to utalize the USO levy and these too must be considered along with the Planning Commission recommendation.
In October 2011, the Union Cabinet had cleared the 20,000-crore project to build a national broadband network to take high-speed internet to the hinterlands. Prior to that, the telecom commission, the apex decision making body of the department, had approved this project to build this network that would connect all the gram panchayats utilising the USOF. A similar amount of investment was likely from the private sector towards this initiative.....ET BUEREUA
