Internet reaching rural India despite the bureaucrats

Sonesh Surana, writing on the email list at Berkeley's TIER project, points to this Rediff article on Reliance's rural Cellular strategy. Some key points:

• Reliance CDMA networks already covers 42% of the rural population and they expect to reach 50% (and 400,000 villages) by end of 2006.
• Reliance offers 144Kbps mobile connectivity (using CDMA2000 1x technology) in 3600 towns; GSM providers offer 56Kbps in just 25 towns.
• Rural subscribers in 1xRTT areas are using their cellphones to access Internet !
• Reliance is encouraging 2nd-hand sales to push data-enabled phones into the rural market.

This is fascinating.  The official government approach to rural connectivity has been a series of programs to foster village public telephones and encourage universal service (or at least collect taxes for a Universal Service Obligation Fund).  These programs have typically specified exactly what is to be done including the technology to use in exchange for subsidizes (to a single provider in each region).  Given rural teledensity, it's fair to say existing programs have failed.

Now along comes Reliance, with a service that not only doesn't get subsidies, but has pay taxes and make money, and they are succeeding despite being penalized by the government!

Note:  all Indian telecom operators are penalized with telecom-specific taxes at rates far about most other countries (e.g. 5x that of China).  Beyond that, technology-specific regulation grants less spectrum to CDMA operators like Reliance than to GSM operators, basically punishing them for being more efficient.