"Today, the Indian telecom sector has more than 900 million subscribers and a teledensity of over 76 per cent. Despite this, the Digital Divide still exists. More than 70 per cent of India’s population lives in its 600,000 villages."

Until 2006, most of the growth in the telecom sector was limited to the urban areas. However, rural teledensity, which was about 2 per cent in 2006 rose remarkably in the subsequent period and now stands at about 37 per cent.

Rural India poses challenges like geographical diversity, poverty, lack of literacy and awareness. Challenges in expanding the telecom network in rural India are also manifold, and include low ARPU, deficiencies in power availability, and high CAPEX and OPEX. Opportunities are many and can change the rural landscape by building large, connected communities of stakeholders, providing platforms and an enabling environment to achieve economic and social growth. A certain level of progress has already been achieved as e-Governance programmes sponsored by the Government of India are extending the benefits of health, education and banking to rural India.

Government recognises that world-class ICT infrastructure and information is the key to rapid economic and social development of the country. Hence, it has taken several measures to spur ICT adoption. A Universal Service Obligation Fund (USOF) was created in 2002 to fund rural ICT infrastructure development. All licensed service providers contribute 5 per cent of their annual gross revenue to USOF. Several schemes for providing community access, individual access and shared mobile infrastructure in rural and remote areas have been funded by the USOF.

BThe Draft National Telecom Policy 2011 envisages transformation of the socio-economic scenario through accelerated equitable and inclusive economic growth. It emphasises on providing affordable and quality telecommunication services in rural and remote areas. One of its key objectives is to increase rural teledensity to 60 per cent by the year 2017 and 100 per cent by the year 2020. The policy recognises telecom and broadband connectivity as a basic necessity and aims to provide broadband-on-demand. For this, an appropriate combination of optical fibre, wireless and other technologies is required. The optical fibre network will reach the level of village panchayats in two years and later extend progressively to all villages. Access to this optical fibre network will be open and technology-neutral. The road ahead for the government is: