New Delhi: The government plans to offer all citizens of India free, high-speed broadband connectivity by 2009, through the state owned telecom service providers BSNL and MTNL.

The main objective is to give a boost to the economic activity, which has been introduced in many cities in U.S. The Government of India plans to achieve the free broadband connectivity at a speed of 2 MB per second across the country by spending a portion of corpus of the Universal Service Obligation Fund (USOF). This move may pose a threat to the rivals in the telecom business.

According to the plan, all the telecom operators have to contribute five percent of their revenue to USOF. It is estimated that the unutilized amount from the USOF has touched by $ 2189.07 million by March 2007.

This will also lead to a shift in technological trends from using voice calls to voice over internet protocol (VOIP). The quality of VOIP calls has been improving by years. By 2009, it is likely to be as good as current analogue calls.

In order to make the plans for free broadband activity a reality, the department of telecommunication (DoT) will be setting up an extensive optic cable network across the country, opening up the long-distance sectors for further competition, allowing free and fair access to cable landing stations, permitting the resale of bandwidth, setting up web hosting facilities within the country and asking all international providers to connect to the National Internet Exchange of India (NIXI).

Telecommunication authority of India (TRAI) had recently proposed that access to submarine cables be made cost-based and independent companies be given free and fair access to cable landing stations. TRAI has also recommended that broadband resale will be permitted in India. According to the industry analysts, the implementation of these two steps will lead to a 30 percent reduction in bandwidth costs.

The DoT will also issue norms, which mandate companies, including state owned BSNL and MTNL to begin large scale web hosting services. According to the plans, all the internet service providers should connect their networks to NIXI.