Niche Operators -- Rural Areas

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DoT to allow niche operators in rural areas

New Delhi: Changing its stance, the Department of Telecom may agree to allow niche operators specifically for providing services in the rural sector. DoT has asked the telecom regulator to suggest the policy guidelines under which niche operators should be permitted. Niche operators essentially operate in small areas such as a district and offer mobile and broadband services.

The Telecom Regulatory Authority of India had earlier proposed instituting this new category of operators in its recommendations for promoting rural telephony. However, DoT had so far not been open to allowing niche operators on the grounds that there was enough competition in the market and existing operators were already rolling out services in rural areas.

However in a change of policy strategy, DoT is now looking to not only increase competition but also permit different types of operators in the country, including Mobile Virtual Network Operators. DoT has also asked TRAI to suggest the policy regime for bringing in MVNOs.

The TRAI had suggested that niche operators should be permitted to operate in districts where rural teledensity is below 1 per cent. TRAI had said that niche operators should be eligible for subsidies from the Universal Service Obligation (USO) fund on the same lines as that available to the other access providers. Niche operators could also be spared from spectrum charges.

While the urban telephone penetration is improving fast — Delhi and Mumbai have close to 40 per cent teledensity — telecom connectivity in rural areas is extremely low with just 2 per cent teledensity. The move is aimed at bridging this divide. Both MVNOs and niche operators do not own spectrum or the infrastructure. They lease out capacity from national operators on a whole-sale basis and then resell it to end users under their own brand.

source :: http://sify.com/finance/fullstory.php?id=14630601

Its long pending fantastic move.

Except for Reliance and BSNL, none other operators are visibile in the rural areas. Strangest part is TATA is totally absent which have fantastic low cost plans.

Niche operators licenses should only be given to new entrants and not to incumbents since we've already given them enough time to serve our rural folks.