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Teledata

Tele Data

Mobile Subscribers Yearwise comparision

Building Bridges: Steps to close the rural-urban digital divide

August 01, 2017

Building Bridges: Steps to close the rur...

By T.R. Dua, Director General, Tower and Infrastructure Providers Association

The country has witnessed an exponential growth in the uptake of mobile services during the past few years. However, the growth has been confined to metro cities and large urban conglomerates, thus deepening the digital divide between urban and rural areas. At present, around 55,000 villages do not have telecom connectivity, while those that have access to telecom services have a teledensity of 53 per cent. This is extremely low in comparison to the urban teledensity of 170 per cent. Further, in the era of surging data consumption, internet penetration in rural areas stands at a meagre 13 per cent as compared to 69 per cent in urban areas. These statistics suggest that there is a dire need to extend telecom connectivity in rural areas.

Key drivers

The extension of telecom connectivity in rural areas will help empower nearly two-thirds of the population and serve as a key enabler of government initiatives like BharatNet and Digital India. The increased penetration of telecom services could help augment productivity in the agricultural, education and healthcare sectors, as well as in small enterprises in rural areas. It would also enhance participation by the rural population in governance initiatives, generate new employment opportunities, and enable a host of services like e-commerce, e-learning and e-banking. Moreover, an addition of 25 million rural internet users by 2018-19 would result in an economic benefit of Rs 664.65 billion due to direct, indirect and spillover benefits of internet access.

Global scenario

The importance of telecom services as a tool for driving socio-economic development has been recognised by governments across the world. To this end, the Malaysian government launched the wireless village and Wi-Fi 1 Malaysia programmes, which started with setting up telecentres in rural areas and later extended to installing telecom towers in these areas. Further, the US government has earmarked $2.5 billion to provide broadband access in rural areas. The country’s Federal Communications Commission is also aiming to cover 39 per cent of rural and 4 per cent of urban areas with broadband services. Moreover, the governments of China and the UK are undertaking programmes to extend broadband services across their countries.

Role of tower companies

Unlike other countries, where connectivity in rural areas is primarily driven by the need to expand broadband reach, in India, it is driven by changing industry dynamics. The recent investments made by operators for purchasing spectrum and extending 3G/4G services beyond cities are driving network expansion initiatives in rural areas. Further, with service coverage reaching saturation levels in urban areas, service providers are keen to move to newer markets in semi-urban and rural areas to add subscribers to their “active” user base. Moreover, increasing public sector investments, growing demand for content-based services in regional languages, improving literacy rates, rising disposable incomes, growing awareness about telecom applications and the shift towards a cashless economy will also lead to increased uptake of telecom services in rural areas.

Network expansion initiatives in rural areas would require the installation of robust telecom infrastructure in the form of telecom towers (around 230,000 towers need to be installed by 2020). Further, Category B and C circles, which comprise the maximum number of rural subscribers, would need a higher proportion of telecom towers to enhance connectivity. The share of towers in Category B and C circles is, therefore, expected to increase to 45 per cent by 2020. Meanwhile, the existing towers would need additional tenancies.

The rural market presents a plethora of opportunities for telecom tower companies. The tower industry has installed around 0.21 million towers from June 2016 to February 2017. This number is projected to cross half a million by 2020, owing to the growing opportunities.

Challenges and the way forward

Despite significant opportunities, low operator ARPUs, lack of consumer awareness, linguistic fragmentation, lack of a uniform policy, poor availability of power, ad hoc coercive action by local bodies against tower installation, and the dearth of government land and buildings for installing towers are some of the issues impeding the growth of telecom infrastructure in rural areas.

The government needs to take sufficient measures such as incentivising the industry for deploying networks in rural areas; providing financial support from the Universal Service Obligation (USO) Fund; introducing fuel subsidies either through the USO Fund or alternative mechanisms till power connections become available at industrial rates; providing security to telecom infrastructure in states and ensuring that no coercive action is taken; extending electricity connections at preferential tariffs to telecom sites on a priority basis; providing government land and buildings for tower installation to address issues related to coverage gaps and site availability; and ensuring regulatory certainty. These measures would help in setting up a robust infrastructure and bridging the digital divide between urban and rural areas.

Based on a presentation at tele.net’s  “Telecom Infrastructure in India” conference

 

 
 

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