Niche Operators:
It is assessed by TRAI that despite the USO support, existing big service providers would not be interested to serve about 50 per cent of the villages. To address this issue, TRAI in its Unified Licensing recommendations envisaged that the Short Distance Charging Areas with teledensity less than 1 per cent be notified as telecom-wise-backward areas. In these areas, niche operators, defined as 'the telecom service providers whose services are restricted to these backward areas only' will be inducted. These operators are entitled for concessions of zero entry fees, lower license fees and eligibility for USO support. The scheme is aimed to promote local entrepreneurs who have the technical competence to provide communication solutions but cannot compete on equal footing with large operators. About the role of private capital in accelerating the rural teledensity growth, the financial and operational problems that inhibit private operators' entry into rural areas need to be overcome. The recent policy change to raise the FDI limit in telecom is of limited value in this context because additional capital will again target the remunerative urban areas. Thus, despite its suitability, the spread of mobile telephones in rural areas so far has been very limited.