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Disconnection dismay: telecom

 MPost |  2013-07-29 21:49:56.0  |  New Delhi

The telecom sector in India is indeed a zone of baffling contradictions. While the UPA government has recently moved to hike the FDI cap to 100 per cent in telecom, ostensibly to boost the sagging sector with the required dose of foreign capital, reports are emerging that enormous funds in the government’s kitty are lying idle, instead of being put to good use.

The Universal Service Obligation Fun (USOF), created a decade back to help link each of India’s 6,38,596 villages with telecom and broadband connectivity with mandatory contributions by private service providers, has been lying virtually untapped, with a massive amount of Rs 27,949.91 crore lying idle. While thus far, Rs 50,682.95 crore has been pumped into the USOF since it was approved by Parliament in 2002-03, almost 50 per cent of it has been left unused, citing procedural hiccups – a clear indication of bureaucratic lag and governmental inefficiency.


While there is a division of opinion on the efficacy of the fund, which according to some policymakers and industry watchers, is a drain on the government exchequer, notions – that the capital reserve is crucial for implementation of government’s telecom schemes and link up through mobile telephony the hundreds of thousands of remote Indian villages – also prevail. Yet detractors opine that the fund, equivalent to about 0.25 per cent of the country’s GDP, remains unallocated and virtually unutilised, thus causing a drain on public exchequer, while also imposing a financial burden on public telecom operators.

Although, it remains to be debated whether the fund had been better utilised had it been channeled to private telecom enterprises, nevertheless, the very fact that such a massive amount of money has lying idle for so long is extremely disconcerting. All the reasons for the government’s latest attempt to fire up the flaccid telecom sector, by raising the foreign direct investment to 10 per cent, fall flat, partially at least, when reports contrary to what the telecom industry data has been suggesting emerge in the public sphere. It is now obvious that between the FDI policy and practice, there is a yawning gap, that is getting bigger by the day.

For all of the government’s crying foul over acute lack of capital inflow, the story of the appalling unused of USOF, and sitting duck over a reservoir of untapped money, speaks volume on the kinds of situation that will shortly surface within the telecom sector. Evidently, there’s a major rift between what the powerful telecom lobbies advocate and what the ground reality is at various points of the Indian hinterland.

The will to build infrastructure – such as fibre optic connecting lines, spectrum airwaves and other adjunct civic amenities that are required to usher in the information and telecommunication revolution in the most distant of Indian villages, thereby bridging the digital divide – has been caught between the cracks within bureaucratic irregularities.
With Rs 27,949.91 crores still unused, the vision to build pan-India optic fibre network, along with mobile towers in the radicalised areas of nine Indian states, has been postponed by several years, to say the least.       

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