Public-Private Partnership for Rural ICT Services

Abstract

In spite of its currently booming telecom sector, India is still a stark example of the digital divide with urban teledensity being as high as 40.65% and rural teledensity trailing at 1.87%. Realizing that connecting rural & remote areas is critical in order to achieve sustainable and inclusive socio-economic growth, a number of measures have been taken in the past to encourage the private sector to venture into the rural ICT market and to compensate the public sector incumbent for its efforts in this direction. The limited success of these attempts, underlines the futility of the public sector trying to achieve this effort on its own as well as of government trying to force the private sector into the provisioning of services in non remunerative rural areas. The answer lies in encouragement of private investment in rural ICT by means of Public Private Partnership programs as is being done under the Government’s Universal Service Obligation Agreements and the Common Service Centre Programme. The author explains that these initiatives possess the promise to deliver as they have all the plus points of PPP initiatives, whereby services are delivered by the private sector while the service regulation, coordination and monitoring responsibility rests with the government. The author has also made some interesting suggestions on further fine tuning of existing measures involving the innovative use of PPP to further hasten the penetration of ICT into rural areas.

Keywords: ICT, Universal Service Obligation, India

JEL Classification: H42, H53, O38