Jul. 4, 2009 (The Hindu Business Line) --

Thomas K. Thomas

Under the scheme, launched in 2007, 7,871 cellular towers were to be erected across 500 districts in 27 States by last year, but as of February 2009 only about 3,900 towers were up.

State owned BSNL, Reliance Communications and Vodafone (NYSE:VOD) were among those who had won the contract in March 2007. On the infrastructure side, companies including GTL Infrastructure and Quippo had bagged parts of the project.

These companies blame threat from Naxalites, poor weather and tough terrain for the slow progress, apart from savvy villagers who are asking for their pound of flesh in return for giving land for setting up the towers.

“Villagers demand the same rent that we pay in the urban areas for setting up the towers. In some cases, they even want more than the urban rentals when they realise that their village lies in a geographically strategic location. We are finding it tough to convince the local bodies the tangential benefits mobile services will bring to them,” said a mobile infrastructure provider.

This is something the operators did not account for while bidding the contract from the USO fund. During the bidding process, some of the operators even offered to pay the Government a token amount instead of taking a subsidy from the USO fund. These operators had hoped to make profits by being the first to launch telecom services in 2.5 lakh villages and also lease capacity on the towers to operators follow them.
Hauled up

The Department of Telecom, meanwhile, has hauled the service providers for their slow progress.

This has also delayed the second phase of the rural mobile project for another 11,000 towers across 2.4 lakh villages.