Rural telephony still a far cry

India may be the fastest growing telecom market in the world with the lowest tariffs, but latest government data show that the country's record in improving rural tele-density is dismal.

In large and populous states of Uttar Pradesh, Madhya Pradesh, Jharkhand, Jammu and Kashmir, Chhattisgarh, Assam and Bihar, rural tele-density was less than 1 per cent of their population on October 31, 2005, according to data complied by the ministry of communications and information technology.

Of the 27 telecom circles that have been scanned by the ministry, 12 have rural-tele-density of between 1 per cent and 5 per cent, 3 between 5 per cent and 10 per cent and only 1 (Kerala) over 10 per cent.

The overall rural tele-density in the country is as low as 1.77 per cent against an urban tele-density of 32.16 per cent and a national average of 10.53 per cent.

The data also suggest that telecom operators (private as well as government-owned) have not done much during the current financial year to improve rural telephony.

While urban tele-density improved rapidly from 26.88 per cent on March 31, 2005 to 32.16 per cent on October 31, rural tele-density only managed to crawl from 1.73 per cent to 1.77 per cent during the period.

Between the two dates, national tele-density rose from 8.95 per cent to 10.53 per cent.

"If the present universal service obligation policy of subsidising individual connections and village telephones continues, then we will achieve rural tele-density of only around 4 per cent even after giving a huge subsidy support of around Rs 40,000 crore (Rs 400 billion).

Neither such low tele-density in rural areas nor such high subsidies to achieve so little can be acceptable," Telecom Regulatory Authority of India Chairman Pradip Baijal told Business Standard.

Trai has recommended that the government give Rs 8,000 crore (Rs 80 billion) in subsidies for infrastructure creation to all access service providers who contribute towards the universal service obligation fund.

"If this is implemented early, then we can achieve rural tele-density of around 15 per cent by December 2007 and this, combined with expected urban tele-density of around 43 per cent, will take the overall tele-density to 22.98 per cent, easily meeting the target of 250 million subscribers," Baijal added.

On their part, private telecom services operators have said that the government's failure to extend support from the universal service obligation fund and permit infrastructure-sharing are the main bottlenecks that prevent them from spreading their networks to rural India.

"Despite repeated recommendations from Trai and petitions from private operators, the government has remained silent on these issues," said an executive with a leading mobile service operator.

"The prime need is to create infrastructure in an expeditious and cost-effective manner. This can only be possible through the sharing of mobile towers and the backbone, an issue that is being discussed with the department of telecommunications," said TV Ramachandran, general secretary, Cellular Operators' Association of India, a body representing GSM players.