Apr 25, 2007 :: Rural telephony turns profitable

Have you heard of the Universal Services Obligation Fund? It is the one that the Government used to dip in, to dole out subsidies to telecom operators to reach out to villages. Time was the operators did not find rural business profitable and had to be subsidised and coerced to serve there.

But things have turned around more than 180 degrees. In the latest round of bidding, there was keen competition among telcos to not only spurn subsidies but offer the government a premium to get the rural blocks they want. The forecast is mobile telephony will reach an additional 240million folks.

It’s a clear sign of rural prosperity and shows that the best subsidies are ones that die beautiful deaths.  Report