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BSNL Does The Obvious Thing With USO Fund Money: Cuts Rural Broadband Rates

Indian Government owned telecom operator BSNL is launching broadband services targeting rural areas, with on a usage basis, considerably cheaper than the plans being offered in urban areas, due to a subsidy component from the USO Fund.

Plans on offer include the following:
– BBG Rural USOF 99 Plan: Rs. 99 with a 400 MB limit for up to 2MBps.
– BBG Rural USOF 150 Plan, with a 1GB limit at 2MBps.
– BB Home Rural Combo UL 500 Plan: 512 kbps download speed up to 4 GB download and 256 kbps beyond that. The customer also gets 150 calls (MCU) free of cost.

Download the plan details here.

Doing The Obvious Thing

Using the USO Fund subsidy, BSNL is doing the most obvious thing – cutting the monthly price; even though they aren’t charging registration, modem, security deposit and installation fees from Rural customers, the cost of a connection can easily be addressed further by making it service pre-paid and pay-per-use. But the cost of a connection is not the biggest hurdle for increasing rural broadband penetration: bigger issues are education (creating a need for broadband), and the cost of a device (PC). What is a bigger hurdle, whether you’re on Mobile Broadband or Wireline – Rs. 20,000 for a PC, or Rs. 250-500 per month for a connection? Wonder why BSNL didn’t tie up with PC manufacturers for reducing the barrier to entry.

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Or perhaps, the view is that for India, it will eventually be about Mobile Internet. Remember that BSNL is paying the Indian government around Rs. 18,500 crore for 2G and 3G spectrum. India has only around 9 million broadband connections, compared with at least 611 million mobile connections, according to reports filed by telecom operators with the telecom regulator TRAI.

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