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More than 60% of the Universal Service Obligation Fund (USOF) still unspent

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The National Telecom Policy (NTP) of 1999 lay down that the resources for meeting the Universal Service Obligation (USO) were to be generated through a Universal Access Levy (UAL). Till date, more than 60% of the UAL collections lie unspent.

The National Telecom Policy (NTP) of 1999 lay down that the resources for meeting the Universal Service Obligation (USO) were to be generated through a Universal Access Levy (UAL). The UAL collections are to be used for meeting the objectives of universal service. As of 31st August 2016, the UAL collection is a total of Rs 78590 crore, out of which only Rs 31177 is disbursed under Universal Service Obligation Fund (USOF).

Why USOF?

The NTP of 1999 had Universal Service as one of its main objectives. The idea was to a strike a balance between the provision of Universal Service to all uncovered areas, including the rural areas, and the provision of high-level services capable of meeting the needs of the country’s economy. The resources for meeting the Universal Service Obligation (USO) were to be generated through a Universal Access Levy (UAL), at a prescribed percentage of the revenue earned by the telecom licensees to be decided in consultation with the Telecom Regulatory Authority of India (TRAI).

Activities under USOF

Various activities were envisaged to be undertaken for the implementation of USO by all fixed service providers. The service providers were to be reimbursed from the USOF.  The Universal Service Support Policy came into effect from 1st April, 2002.

The following schemes/projects were undertaken under the USO in the past.

  • Shared Mobile Infrastructure Scheme
  • Provision of Rural Community Phones (RCPs)
  • Provision of individual Rural Direct Exchange Lines (RDELs)
  • Rural Wire line Broadband Scheme for provision of Broadband Connections
  • Village Public Telephones
  • National Optical Fibre Network (NOFN)
  • Optical Fibre Network Augmentation (OFC), Creation and Management of Intra-District OFC Network in North Eastern Region
  • Scheme for Mobile Communication Services in Left Wing Extremism (LWE) affected Areas
  • Comprehensive Telecom Development Plan for the North-Eastern Region

There are a few other ongoing schemes that are to be funded by the USOF.

Apart from the above schemes, support from USOF was extended to BSNL for rural Wire-Line connections installed prior to April 2002. The Union Cabinet recently approved a support of Rs 1250 crore to BSNL from the USOF.  BSNL also received the following support from the USOF for the rural Wire-Line connections in the past

  • Difference between regulated rental and actual rental (Rs 1192 crore)
  • TRAI Recommendations in 2008 (Rs 6000 crore)
  • TRAI Recommendations in 2012 (Rs 1500 crore)

The government has made it clear that the Rs 1250 crore would be the last & final payment for rural Wire-Line connections.

More than 60% of the USOF still unspent

The UAL collection has crossed Rs 78590 crore as on 31st August 2016. The highest UAL of Rs 9836 crore was collected in 2015-16. The UAL collection in the first year, 2002-03 was Rs 1654 crore. The UAL collection increased to more than Rs 3000 crore for the first time in 2004-05. It crossed the Rs 5000 crore mark in 2007-08. Since 2013-14, the average UAL collection is more than Rs 7000 crore.

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Only Rs 300 & 200 crore was disbursed under USOF in 2002-03 & 2003-04 respectively. The highest amount disbursed under USOF was Rs 8549 crore in 2008-09. BSNL was reimbursed the license fees and spectrum charges amounting to Rs 6948.64 crore over the period 2002-03 to 2005-06 for fulfilling rural obligation. This amount was released in 2008-09, making it the year with highest disbursal of USOF. Though the fund disbursal under USOF has gradually increased, only Rs 31177 crore is disbursed till date, which is less than 40% of the UAL collections.

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Featured Image: usof.in

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