Country Presentation India

1. Country Presentation India Rural ICT Policy Advocacy, Knowledge Sharing and Capacity Building Regional Project Regional Multi-stakeholder Discussion Forum on Rural ICT Development Bangkok, Thailand, 4 July 2011

2. Key Indicators

3. Status India’s relatively higher/significant mobile sector growth has of late started to slow down primarily on account of low ARPU( around $2.9 pm), more competition as well as tougher subscriber verification and security norms About 60,000 villages (10%) are left to be covered with a mobile signal with a mobile signal and out of these 30,000 villages are of less than 500 population Existing insignificant Broadband penetration of 1% offers a great opportunity for further growth potential in Broadband and ICT . India has to “catch up” with other countries in the region on Broadband penetration, Revenues and ICT development.

4. State Institutional Structure • Governance of communication and IT activities by one nodal Ministry, has been reasonably effective in imparting adequate attention to coordinated growth of ICT. • The twin body arrangement of TRAI and TDSAT has strengthened the regulatory, adjudicatory and appellate mechanism in communications, broadcasting and distribution media sectors. • The separation of policy making and regulatory function with both agencies reporting to Parliament( albeit through same minister) has been quite effective in ensuring regulatory independence • There may be a case for separation of policy making and license function

5. Policy, Legal, & Regulatory Framework • Policy formulation and regulation have to ensure orderly growth of ICT sector keeping in mind the national objectives ,sector requirements and technological developments • This requires periodic and regular review of policies and regulations • Simplification of licensing framework such as convergent and unified licensing helps the growth of the sector • Policy and regulatory framework promoted healthy competition which in turn accelerated the growth in ICT sector. Need for an enabling policy of M&A.

6. Funding Mechanism • Fund allocation is a direct function of ICT knowledge of political leaders running the Govt. • Effective USOF support not only increases national tele-density but also reduces regional inequalities as well as digital divide • A “Smart USOF” aims at providing “Smart subsidy” for activities in uneconomic, unviable and underserved areas to jump start the viability and make such activities self sustaining, cost effectively in a defined time frame.

7. BASIS OF SUBSIDY SUPPORT • BENCHMARKING: EITHER A NET COST APPROACH-OR A PERCENTAGE OF CAPITAL RECOVERY MODEL • CAPITAL RECOVERY EQUALS SUM OF DEPRECIATION, RETURN ON EQUITY AND INTEREST ON DEBT. • BENCHMARK FORMS THE UPPER LIMIT OF SUBSIDY • BIDDING DETERMINES THE ACTUAL SUBSIDY PAYOUT PER UNIT OF BIDDING (NORMALLY SERVICE AREA). • SUBSIDY PAYMENTS COMMENCE ONLY AFTER COMMISSIONING AND ARE PHASED OVER AGREEMENT DURATION (5-7 YEARS).

8. Rural ICT Initiatives and PPP • Several ICT initiatives such as DOT’s USOF scheme and DIT’s National e-Governance Program ( NeGP) and BSNL’s Demand side initiatives etc. are being implemented • NeGPis an extremely useful in promoting awareness of ICT benefits. It is complex to implement • There is a need to better synergize the ICT initiatives of DOT and DIT despite their being part of the same Ministry

9. USOF PROJECT AREAS USO FUND ACTIVITIES CLASSIFIED UNDER DIFFERENT STREAMS: STREAM I : PROVISION OF PUBLIC TELEPHONE SERVICES STREAM II : PROVISION OF RURAL HOUSEHOLD TELEPHONES IN NET HIGH COST RURAL & REMOTE AREAS.

10. USOF PROJECT AREAS (cont.) STREAM III : CREATION OF INFRASTRUCTURE FOR PROVISION OF MOBILE SERVICES IN RURAL/REMOTE AREAS. STREAM IV : PROVISION OF BROADBAND CONNECTIVITY TO VILLAGES IN A PHASED MANNER.

11. USOF PROJECT AREAS (cont.) STREAM V : CREATION OF GENERAL INFRASTRUCTURE IN RURAL /REMOTE AREAS FOR DEVELOPMENT OF TELECOM FACILITIES STREAM VI: INDUCTION OF NEW TECHNOLOGY DEVELOPMENTS IN THE TELECOM SECTOR RURAL & REMOTE AREAS

12. National e-Governance Program ( NeGP) THE VISION OF NeGPIS TO MAKE AVAILABLE ALL GOVERNMENT SERVICES ACCESSIBLE TO THE COMMON MAN IN HIS LOCALITY, THROUGH COMMON DELIVERY OUTLETS AND ENSURE EFFICIENCY, TRANSPARENCY & RELIABILITY OF SUCH SERVICES AT AFFORDABLE COSTS TO REALIZE THE BASIC NEEDS OF THE COMMON MAN THE GOVERNMENT OF INDIA APPROVED THE NeGP IN 2006

13. NeGP (contd) NEGP CONSISTS OF 27 MISSION MODE PROJECTS (MMPS) WHERE EACH PROJECT IS A MISSION WITH CLEARLY DEFINED OBJECTIVES AND SCOPE, MEASURABLE OUTCOMES AND SERVICE LEVELS AND WELL DEFINED MILESTONES AND TIMELINES FOR IMPLEMENTATION THERE ARE THREE CATEGORIES OF MMPS VIZ. CENTRAL MMPS (9 NOS.), STATE MMPS (11 NOS.) AND INTEGRATED MMPS (7 NOS.)

14. NeGP (contd) CENTRAL MMPS COVER SUBJECTS SUCH AS BANKING, CENTRAL EXCISE AND CUSTOMS, INCOME TAX, INSURANCE, PASSPORT, IMMIGRATION & VISAS, ETC. STATE MMPS COVER SUBJECTS SUCH AS AGRICULTURE, LAND RECORDS, MUNICIPALITIES (LOCAL GOVERNING BODIES), POLICE, ROAD TRANSPORT, STATE TREASURIES, ETC. INTEGRATED MMPS COVER CROSS-FUNCTIONAL ACTIVITIES SUCH AS CUSTOMER SERVICE CENTRE (CSC), E-COURTS, NATIONAL E-GOVERNANCE SERVICE DELIVERY GATEWAY (NSDG), INDIA PORTAL, ETC. THESE MMPS ARE OWNED AND SPEARHEADED BY VARIOUS LINE MINISTRIES CONCERNED FOR THE THREE CATEGORY OF PROJECTS

15. BSNL DEMAND SIDE INITIATIVE BSNL HAS ENTERED INTO AGREEMENTS WITH TWO COMPUTER MANUFACTURERS M/S HCL AND M/S NOVATIUM, TO PROVIDE PERSONAL COMPUTERS (“PCS”) TO PROSPECTIVE BROADBAND CUSTOMERS IN RURAL AREAS BY REDUCING THE ENTRY CAPITAL INVESTMENT BY CUSTOMERS BEYOND THE RS 4500 (ABOUT US $100) SUBSIDY PROVIDED BY USOF

16. Lessons From Project/Workshop • There is a need to involve all commercial and non commercial organizations to create/spread knowledge economy for making Rural ICT Initiatives sustainable • Costing analysis of a rural area specific technological solution and fixing the benchmark subsidy thereof shall have to be carried out in an open , fair and transparent manner for attracting viable, competitive bidders to build sustainable ICT infrastructure. • There is a need to create a “Reserve Fund” contributed nominally by agencies implementing Government funded/subsidized rural ICT initiatives in every area so as to extend transitional financial support to any of such agencies facing temporary financial hardships . • There is a need of continuity in sharing of knowledge ,experiences and best practices amongst similarly placed /Regional countries to avoid pitfalls in march towards achieving self sustainability of rural ICT operations

17. Objectives for Follow-up • Bidding requirements should not be too complex or demanding and should be technology neutral which eliminate the potentially viable bidders • After award of the contract, the USOF fund disbursement has to be based on contractor’s meeting the defined milestones, duly verified by independent technical audit agency with regard to capacity, capability and other technical parameters required to meet the desired service deliverables under the USOF contract . • Emphasis on development of regional citizen centric and GUI based applications is needed for rural ICT programs ` to succeed. • International Funding Institutions need to extend funding support for establishing National Optical Fiber Network up-to Village Panchayats as a flagship infrastructure program for socio- economic and rural ICT development

18. Thank You