India Planning Half Billion Dollar Boost to Rural Phone Coverage

Mobile phone coverage in rural India is set to get a boost with a Rs3,00 crore (US$490 million) commitment from the Universal Service Obligation Fund (USOF).

The investment, which has been reportedly approved by the Telecom Commission will expand mobile coverage to around 56,000 villages, including those along the Bangladesh and Chinese borders were coverage has sometimes been restricted due to security issues.

"The project will involve the rollout of nearly 20,000 towers, and the USOF will take a call on whether to extend viability gap funding (VGF) or subsidise both capex or opex elements of the project since private operators are averse to investing in mobile coverage in these regions," an unnamed senior DoT official told the Economic Times newspaper.

The roll out is due to take place by next March.

India's USOF is based on a levy on the mobile networks equivalent to 5 percent of their annual revenues and has been building up since 2002. It has come under recent criticism from the GSMA though, as the fund now has a surplus of around US$4 billion that has not been spent.

On the web: Economic Times