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Telecom Outreach: Key role of the USO Fund
N. Ravi Shanker, Administrator, Universal Service Obligation Fund
The Universal Service Obligation (USO) Fund, under the Department of Telecommunications, plays an important role in spreading the reach of telecom. If operators, despite holding a licence, are reluctant to roll out services in a particular circle owing to viability issues, the USO Fund steps in to provide viability gap funding (VGF), thereby encouraging the company to offer services in these areas.
One of the most significant programmes supported by the USO Fund is the Shared Mobile Infrastructure Scheme. Under this scheme, about 7,353 telecom towers have been set up in remote areas with the participation of infrastructure providers (IPs) and universal service providers (USPs). The IPs provide the towers and the USPs provide the base transceiver stations (BTSs).
However, despite both parties bidding for VGF while undertaking these projects, financial difficulties arise as their estimation of the viability gap falls short of their projections. Consequently, these companies are unable to fulfil their obligations.
The main reason for this is the lack of BTSs in the tower space. Today, while 99 per cent of the projected number of towers has been set up, the number of BTSs is inadequate. Of the projected 22,000 BTSs, only 70 per cent are in place. Operators are of the view that the BTS market is very limited, thus restricting their business prospects, especially in rural areas. Other factors inhibiting operators from expanding their businesses in remote areas include the nature of the devices available, the current tariff structure and input costs.
The cost of the energy required to run a telecom tower site has been the subject of much industry debate. The main factors driving up energy costs are the prohibitive price of diesel and of transporting fuel to remote areas. Pilferage of diesel is also a major concern.
Keeping these challenges in mind, a holistic solution is required to meet the sector’s energy needs. In this context, renewable energy sources such as solar power are a viable solution. However, it is important to ensure that telecom tower operators match the existing conversion efficiency of the equipment used for this technology. This is vital to reduce diesel usage and support cleaner fuel.
There is also a need for appropriate incentives from the Ministry of New and Renewable Energy to give a fillip to the deployment of green energy sources by the telecom industry. While the Telecom Regulatory Authority of India’s (TRAI) guidelines on adopting green technology are a step in the right direction, the factors promoting and inhibiting the implementation of these recommendations need to be examined.
Another major project being undertaken by the USO Fund is the National Optical Fibre Network (NOFN). This aims to increase the penetration of broadband – which is a strong development indicator – across the country. This, in turn, will help promote the uptake of services such as e-learning, e-commerce, telemedicine and e-governance, especially in rural areas. To ensure broadband uptake, operators and device manufacturers must offer content to rural subscribers in local languages and on low-cost tablets, like Aakash. Through the project, the government aims to provide broadband access to 600,000 villages, covering 250,000 gram panchayats. The plan is to lay a fibre network from the block level to the gram panchayats. Through the NOFN, the USO Fund will ensure that operators can easily reach remote markets as the network offers non-discriminatory access to all operators, who can avail of bandwidth at prices determined by TRAI.
The NOFN project is based on the gigabit passive optical network technology. Besides this platform, the USO Fund intends to examine various renewable energy options for the optical network and line terminals in areas where grid power is unavailable. The use of renewable energy solutions for the NOFN project may vary from location to location.
To examine the viability of using renewable energy sources in this project, the USO Fund has collaborated with The Energy and Resources Institute for the latter’s Lighting a Billion Lives initiative, aimed at providing additional mobile charging facilities for rural areas. The project will cover 5,000 villages across India over two years.In conclusion, while the USO Fund can support viable telecom projects, it cannot be considered a resource base that provides subsidies to the industry. It is already providing VGF for key projects like infrastructure sharing and the NOFN. These projects are aimed at bridging the intermediate layers as well as opening up the rural market for telecom operators
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