Govt’s rejig of rural telecom fund to free up Rs 33,000 crore for operators

  • M Rajendran, Hindustan Times, New Delhi
  • Updated: Sep 04, 2014 00:57 IST

The communications ministry has decided to restructure the Universal Service Obligation Fund (USOF), which would enable free flow of more than Rs 33,000 crore for private operators to roll out telecom network in remote parts of India at an affordable cost, especially broadband services.

“Over the last few years, the demand and dynamics of telecom services have changed, restructuring of USOF has been initiated to add more objectives such as broadband to all, including rural areas and bring in private operators, who have stayed away in this initiative,” a senior communication ministry official said.

Universal service obligations refer to a set of objectives, which seek to provide telecom facilities in rural areas such as mobike and internet connectivity, according to the National Telecom Policy 1999. It envisages that the obligations would be undertaken by all fixed service providers who shall then be reimbursed from the USOF.

Five per cent from operators’ revenue goes towards funding USOF. Credits to the fund are done through Parliamentary approvals. However, private telecom operators have scrapped major projects in the past in rural areas, citing non-feasibility.

“The resturcturing should examine the quantum of USO levy and should be brought down to about one per cent and also help operators with administrative support in getting clearances from various government departments, like environment,,” Rajan Mathews, director general, Cellular Operators Association of India told HT.

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