The proposal to make fixed line network and mobile tower projects eligible for Viability Gap Funding will help in improving telecom connectivity in rural areas.

While fixed line operators have been struggling to operate in rural areas, tower companies have stopped rolling out new infrastructure due to weak industry fundamentals.

Mr Sunil Kanoria, Managing Director, Viom Network, the country's second largest mobile tower company, said the proposals will incentivise tower companies to invest in “less profitable” areas.

“Most companies have been reluctant to invest in rural areas primarily because it has not been feasible for them. But with viability gap funding all that is expected to change soon,” he told Business Line.

Mobile towers had declined significantly to just 8,000 a year compared with 14,000 in the previous financial year. According to data available with the Department of Telecom, over 40,000 new towers were added in 2009-10.

While there were 3.47 lakh towers on March 2011, this is expected to move up to 3.55 lakh by the end of the current year, a growth of only 2.3 per cent. In comparison, the year-on-year growth rate in 2008 was over 60 per cent

> tkt@thehindu.co.in

Related Topics