The Telecom Ministry is likely to provide rural wireless broadband connections to over 5 lakh villages in one-and-a-half years and will provide a subsidy to both state-owned and private service providers operators from the Universal Service Obligation Fund for this purpose.

"Wireless broadband to cover about five lakh villages...

time period, you see, we hope that the majority of this should be completed in one-and-a-half years from the date of signing of the agreement. So that (signing of agreement) process will take 2-3 months, so we are processing the tender for the same," a source in the Department of Telecommunications (DoT) said.

The tender for the same will come by the end of this month.

"Hopefully the whole process will take 2-3 months, which includes advertising, examination of the tender and signing of the agreement. After that, our expectation is one-and-a-half years to reach close to five lakh villages," the source added.

The USO Fund was set-up in 2002 in order to provide mobile services and broadband connectivity in rural and remote areas of the country. As of December 31, 2010, the fund has a total size of Rs 13,789.28 crore.

"By the end of this financial year, we would be having roughly the fund position to be at Rs 17,000 crore. Every year, the flows are to the extent... less than Rs 6,000 crore and whatever we spend, it gets deducted from that."

"So whatever funds it takes, Rs 5,000 crore or Rs 10,000 crore, we have money to do that. So I don't want to put a figure on it. So whatever money it takes, we have the money to do it," the official said.

Replying to a question on whether state-run BSNL will be given preference over other private service providers, he added, "BSNL has not been excluded from it. We are not saying that BSNL will not be a part of the process. What we are only saying that we cannot provide subsidy exclusively to BSNL, that is for sure."

The resources for implementation of USO are raised through a Universal Service Levy (USL), which at present has been fixed at 5 per cent of the Adjusted Gross Revenue (AGR) of all telecom service providers, excluding pure value-added services like Internet, voice mail, e-mail, etc.

Under the 'Rural Wireline Broadband' scheme of USOF, a total of 2,61,413 broadband connections and 2,506 kiosks have been provided till January 31, 2011, in rural and remote areas of the country, against a target of 8,88,832 connections and 28,762 kiosks by 2014.