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BSNL seeks Rs 938 crore for rural phones

Thomas K Thomas in New Delhi

Bharat Sanchar Nigam Ltd has quoted a requirement of Rs 938 crore (Rs 9.38 billion) for taking up the village phone obligation of the private sector operators.

The move followed a directive from the ministry of communication asking BSNL to work out the funds required in case it was asked to set up the village phones initially committed by the six private operators.

"We have sent our report to the ministry, asking for Rs 100,000 per telephone connection," a senior BSNL official told Business Standard.

Of the 97,806 village telephones connections allotted to the private sector, only 4,059 have been completed.

If the ministry decides to ask BSNL to take up the project at the quoted amount, it will have to find new sources of funding because the Universal Services Obligation fund has only about Rs 800 crore (Rs 8 billion) in its kitty.

Moreover, this has been earmarked for setting up second village phones, and not for those committed by the six basic operators.

The ministry had earlier said if BSNL took up the project it could be funded jointly from the Universal Services Obligation fund and by the six operators, with support from the finance ministry.

The six operators, including HFCL, Bharti Telenet, Tata Teleservices, Reliance Telecom, Shyam Telecom and Hughes Tele.com, had committed to set up 97,806 village phones within three years of commencement of the service.

However, despite the fact that most of the firms had started operations between 1998 and 2000, they are nowhere near completing the committed numbers, with nearly 93,000 villages still remaining to be covered.

BSNL, on the other hand, has covered more than 500,000 villages, and has another 35,000 villages to cover in this financial year.

The ministry of communication had earlier said it would cover all the 600,000 villages by the end of the year.

However, private sector operators have been claiming financial support to fulfill their obligations because the project is unviable.

To counter this problem, the ministry had suggested that BSNL be asked to take up the villages allotted to the private sector as well, and be suitably compensated.

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