The Finance Ministry has proposed offering low interest loans to telecom operators for communication projects in rural areas. The funds for loans will be arranged from the Universal Service Obligation Fund (USOF).

The USOF presently is estimated to be over Rs.25,000 crore with major part of this still remaining unutilized.

In USA, the telecom regulator, FCC offers similar incentives to telcos who rollout broadband services to the rural flock. The Finance Ministry has proposed to explore two options for rural telephony push, the Telecommunication Loan and Guarantee of Rural Utility Services of USA or the US Department of Agriculture's Rural Broadband Programme.

"Encouraging a multiplicity of players and alternative wireline technologies in every service area would generate the competitive pressures needed to ensure service quality, customer orientation, innovative marketing and pricing, which are essential to precipitate development of the rural broadband market..." said the Finance Ministry on plans to push uptake of wired broadband connectivity.