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Rediff.com  » Business » Telecom revolution yet to reach 62,000 villages

Telecom revolution yet to reach 62,000 villages

Last updated on: February 25, 2011 21:14 IST
India may have achieved a teledensity of over 65 per cent, but as many as 62,443 villages are still to get a taste of telecom revolution that started since 1995-96, says the Economic Survey 2010-11.

"There are still about 62,443 uncovered villages, which would be provided with village public telephones (VPTs) facility with subsidy support from the Universal Service Obligation Fund (USOF)," the Survey said.

India's teledensity (phones per 100 people) stood at 64.34 per cent in November, 2010, it added. USOF was set up by the government to subsidise the development of the telecom sector in rural areas.

All telecom operators contribute a part of their revenue to this fund whose corpus stood at Rs 13,789.28 crore (Rs 137.89 billion). But the government has failed to utilise the fund effectively asking telecom firms to go to rural areas. Most of the operators have skipped expansion in rural areas mainly due to low profitability and high cost of setting up infrastructure.

Support is provided from the USOF for operations and maintenance of VPTs in the rural areas. Agreements were signed with BSNL, thereby 40,101 villages have been covered under VPTs.
As on December 31, 2010, 61,985 VPTs have been provided by BSNL, it said.

In order to provide broadband connectivity to rural areas under the purview of USOF, out of a total of 8.88 lakh wireline broadband connections, 2.32 lakh have been provided till November 30, 2010, the Survey added.

The country's total telecom subscriber base stood at 764.77 million at the end of November 30, 2010, driven by active participation of the private players, especially in rural areas.

"The telephone user base (comprising mobile and landline connections) rose to 764.77 million as on November 30, 2010 from 76.54 million telecom subscribers in 2004," the Economic Survey 2010-11 tabled in Parliament said.

The private sector has contributed crucially to the growth of rural telephone by providing about 84.5 per cent of telephone connections as on November, 2010, it added. Wireless connections have also contributed in a big way to the growth, with the number of mobile phone users rose from 35.62 million in March 2004 to 729.58 million by November-end, 2010.

Landline connections, on the other hand, declined to 35.19 million in November, 2010 from 40.92 million in 2004. "With an increasing private sector participation, the share of private sector in total telephone connections has increased to 84.5 per cent in November 2010 from a meagre five per cent in 1999," the Survey said.

Rural teledensity, which was above 1.57 per cent in March 2004 has increased to 30.18 per cent at the end of November, 2010, while urban teledensity increased to 143.95 per cent (November 2010) from 20.74 per cent in March 2004.

"With the penetration of mobile services and flourishing of private service providers, rural telephone connections have gone up from 12.3 million in March 2004 to 250.94 million in November 2010," it said.

The share of rural telephones in total telephones has steadily increased from around 16 per cent in 2004 to 32.81 per cent as on November 30, 2010. During 2009-10, the growth rate of rural telephones was 62.6 per cent as against 37.32 per cent for urban telephones.

Broadband subscribers grew from 8.77 million as in March 2010 to about 10.71 million up to November 2010. However, the government had set a target of 20 million connections by 2010 as part of the broadband policy.

However, the survey said, "Regulatory improvements will also be important as many domestic regulations and market access barriers could come in the way of fully tapping this growth accelerating sector."

The survey also said, that the production of telecom equipments in value terms increased from Rs 48,800 crore (Rs 488 billion) during 2008-09 to Rs 51,000 crore during 2009-10. It further added, the worth of telecom equipments, including customer premises equipment (CPE) produced during 2010-11 is expected to be about Rs 53,500 crore (rs 535 billion).

Exports of telecom equipments have also increased from Rs 11,000 crore (Rs 110 billion) in 2008-09 to Rs 13,500 crore (Rs 135 billion) during 2009-10 and are expected to increase to Rs 14,000 crore (Rs 140 billion) in 2010-11.

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