The Home Ministry''s plan to use mobile communications to keep a tab on naxal activities has hit a roadblock. Cash-strapped BSNL is averse to rolling out cellphone networks in Maoist prone zones across eastern, central and southern India as it feels the project is commercially unviable and will drag the loss-making telco further in the red.

Since the ultras are known to demolish critical communications infrastructure, including mobile towers and optical fibre cables network, to skirt surveillance, the BSNL management believes investing in capital-intensive network rollout in naxalite pockets will further drain
its finances.

BSNL has told the telecom department that it will execute the project only if it is entirely subsidised by the Universal Services Obligation Fund (USOF). However, providing subsidy to BSNL alone for setting up mobile networks in naxal-infested territories will need changes in the Indian Telegraph Act & Rules.

Besides, BSNL will also have to participate in an open bidding process to pitch for USOF subsidy. All telecom companies contribute 5% of their revenue to the USOF and BSNL cannot be given special treatment. The USOF kitty is pegged at about Rs 20,000 crore.

"BSNL's proposal to extend cellphone connectivity in left-wing extremist (LWE) zones cannot be funded by the USOF unless there is an amendment to the Indian Telegraph Act & Rules or BSNL emerges the winner of a tender floated by the USOF Administrator ," says an internal note from the telecom department's security wing, which was reviewed by ET.

The issue of subsidy to BSNL was discussed at a recent Home Ministry meeting where people in charge of naxal management were present. "The Home Ministry has been asked to send a proposal to the telecom department stating the quantum of subsidy needed to roll out mobile networks in these naxal habitats," said another telecom department official privy to the talks.

Senior officials in the Home Ministry, the telecom department and BSNL will shortly meet to arrive at the total cost of rolling out mobile networks in Maoist-affected areas in Chattisgarh, Jharkhand, West Bengal, Orissa and Andhra Pradesh. BSNL has discussed plans to set up 1,721 mobile towers in select naxalite pockets across India with national security agencies.

But company executives claim the project can only happen if the USOF agrees to fully reimburse both capital and operational expenditures. Chhattisgarh districts like Dantewada, Narayanpur, Bijapur and Kanker or Palamu in Jharkhand have borne the brunt of recent attacks on mobile towers and OFC routes. At least 14 districts in Orissa have also suffered
similar attacks.