Private cellular mobile operators are all set to get an attractive chunk of business in rural areas with the Cabinet on Monday deciding to introduce an ordinance that would help the government dip into a special fund to help underprivileged areas.
There is more than Rs 11,000 cr of the Universal Services Obligation (USO) Fund, which the government builds up through a charge on service providers.
The independently administered fund spent through budgetary allocations helps subsidise coverage in areas where private players do not find it profitable to invest on their own.
The Cabinet approved a proposal from the Communications Ministry to bring an ordinance to amend the Indian Telegraph Act 1885 to help bring mobile services in rural areas under the ambit of the USO Fund.
Information and Broadcasting Minister PR Dasmunsi said that the ordinance would be sent shortly to the President for his approval.
"This is a good news and it will help cellular mobile operators to go into the unserved remote rural areas of the country," TV Ramachandran director-general of the Cellular Operators Association of India (COAI) told Hindustan Times.
The Department of Telecommunications had been insisting on a legal amendment to ensure that "basic" telephony can be interpreted to include cellular phone services.
The USO fund is build from a 5 per cent levy on the adjusted gross revenue (AGR) of all telecom service providers, except pure value-added service providers who deal in Internet, voice mail and e-mail services.