India bridging digital divide with USOF

Charice Wang/Ovum
27 Jun 2011

Earlier this month, India’s Ministry of Communications and Information Technology (MCIT) released its rural broadband subsidy plan to finance rural wireless broadband in India, and announced the start of the tender process.

A total of 80 billion rupees ($1.8 billion) to promote rural wireless broadband will be paid out of the Universal Service Obligation Fund (USOF), which had a total of 138 billion rupees as of 2010.

The 80 billion rupee subsidy will be available to telecoms service providers that win the rights to roll out wireless broadband networks in all telecoms service areas.

This subsidy is an initiative from the MCIT to promote broadband connections in rural and remote regions of the country. The plan is also an important strategy of the MCIT to meet the targets set out in the Indian national broadband plan.

To realize the “digital dream” in India, the MCIT and the telecoms regulator, the Telecom Regulatory Authority of India (TRAI), should take immediate action to refarm spectrum in the 900MHz and 1800MHz bands and auction the digital dividend, which are important steps to promote wireless broadband in rural and remote areas.

Reaching rural and remote India is an essential part of the Indian national broadband plan. Having a national digital strategy is now common practice around the world. Many countries have announced their national broadband plans, including Australia, Japan, New Zealand, and the US. In Europe, the European Commission has already announced its target to give all Europeans access to basic broadband by 2013.

In the Indian national broadband plan (of which wireless will only be one component), the MCIT aims to connect all areas with a population size of above 500, to reach 75 million broadband connections by 2012 and 160 million broadband connections by 2014 with a download speed of at least 2Mbps by using various technologies.

The total infrastructure costs for achieving these targets in the national broadband plan were estimated to be approximately 600 billion rupees, which will be financed by both universal service funds and loans from central government.

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