The Hindu Business Line : BSNL, Tata, Reliance bag Rs 8,000-cr rural phone project

BHARAT Sanchar Nigam Ltd, Reliance Infocomm and Tata Teleservices have bagged the Government sponsored Rs 8,000-crore plan to provide 8 million fixed line telephones to rural households by 2007.

The project is being supported from the Universal Services Obligation (USO) Fund. Bharti Tele-Ventures and Himachal Futuristics Communications Ltd had also bid for the country's largest rural telephony project but failed to win the competitive bidding.

Mr Shyamal Ghosh, Administrator, USO Fund, told Business Line, "The competitive bids have brought down the cost of the project by 60-75 per cent. This will allow us to use the kitty to roll out 8 million telephone lines instead of 6 million lines proposed earlier. The bids from private operators show that there is a market in rural India."

While the Government had worked out a cost of Rs 17,000 per line, the operators have quoted between Rs 4,500 and Rs 7,000 per line.

The USO Fund administrator had invited expression of interest from telecom operators across 20 States to bid for the largest project envisaged under the USO scheme. The project covers 274 secondary switching areas (SSAs), which are equivalent to a district.

While there was competitive bidding in 215 SSAs, BSNL was the sole bidder for the remaining sectors in Assam and North East. In areas where there was competitive bidding, it emerged the most successful bidder winning in 171 SSAs across 19 States.

The telecom operator did not win any sectors in Haryana. Reliance Infocomm emerged the winner in 61 SSAs spread across 15 States while Tata Teleservices got the project in 42 SSAs across 9 States. Tatas had bid for villages in 16 circles. Bharti, which had expressed interest in 11 circles, did not win any. Letter of intent has been issued to the successful operators.

This is the first project aimed at rural households. Until now the USO Fund was being used for setting up village community phones.

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