Note:  The authors work with the Regulatory Studies and Governance Division, The Energy and Resources Institute, New Delhi. Please send any comments to firstname.lastname@example.org
Abstract: Over the last decade, the telecommunications sector in India has undergone a fundamental transformation from being a state of monopoly to one of competition. Though the sector has witnessed tremendous growth in terms of overall subscriber base, the urban–rural disparity in teledensity has been widening at an increased rate in the liberalized era. While it is perceived that there is sufficient competition in urban areas, telecommunication networks are not being expanded into the rural areas, where thousands of villages are yet to be connected with basic telephony. As greater reliance is placed on market-based policies, there is a natural concern that this might further marginalize the rural areas. Innovative and cost-effective technological solutions play important roles in increasing rural teledensity; however, an appropriate policy and regulatory environment can go a long way in achieving the desired objective of ‘telephony for all’. In this context, this study aims to assess the impact of various policy measures undertaken to promote rural telephony in India with a special focus on the approach adopted towards various funding mechanisms at the disposal of the policy-maker. It highlights key issues concerning each of these mechanisms and identifies policy options that could be explored to step up the provision of rural telephony in India.