[Yearbook] Universal Service Obligation Fund (USOF)

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  1. What is it?
  2. What are the activities undertaken?
  3. Resources- where from?
  4. Timeline
  5. Why is it news?

What is Universal Service Obligation Fund?

  • There is a ‘Universal’ associated so obviously this must be one amongst the inclusive development strategies of the government.
  • Here the idea is to provide universal access to telecom services, i.e., focus on providing telecom services to rural and remote areas at affordable and reasonable prices.
  • A fund exclusively for meeting the above objectives, created under department of telecommunications, Ministry of communication and information technology.
  • It is a non-lapsable fund i.e., unspent amount under target financial year does not lapse, accrues for next years’ spending.
  • All credits to the fund require parliamentary approval and it has a statutory support under Indian Telegraph (amendment) act 2003.

What are the activities undertaken?

  • Installation of village public telephones in every revenue village of 1991 census and additional  revenue village of 2001 census.
  • Provision of rural community telephones at next stage.
  • Provision of household telephones in rural areas.
  • Creation of Infrastructure for mobile services in remote, rural areas.
  • Provision of broadband in villages in a phased manner.
  • Induction of new technologies like national optic fibre network in rural areas.
  • For all the above activities a service provider gets grants from the USOF like a subsidy.
  • The service provider is usually chosen through a bidding process on least quoted subsidy support basis (minimum subsidy maximum service).

Resources- where from?

  • Through a Universal service levy- at 5% of adjusted gross revenue of all telecom service providers.
  • Exception- pure value added service providers like internet, voice mail, e-mail no need to contribute.
  • Also some quantum of funds to come thru central govt. grants.
  • Specialty in this scheme is that it also does some allocation under gender budgeting, for providing services to women, like broadband access to women SHGs.
Timeline of USOF
1910 Theodre vail of AT&T (American multinational telecommunication corp) in a annual report makes passing reference to universal service
1999 Cabinet defines Universal service objectives in Telecom services
ITA(2003)amendment Statutory support for USOF
ITA(2004)amendment Rules for administration of the fund notified
ITA(2006)amendment Mobile and broadband service providence included into its ambit

Why is it news?

  • First BSNL was selected as service provider in many areas unilaterally for provision of services and given grants.
  • Govt. says private providers are not willing to establish infra in core affected areas so choice BSNL is inevitable, also private players will try to exploit this scheme for business ends, misusing govt subsidy.
  • BSNL says it has already created infra in rural areas and now if you allow other private players it is a waste of Govt. money, so ask other players to use established facilities in rented basis.
  • Second delay in implementation and provision of services by BSNL is under critic.
  • Third now a proposal to provide services in LWE(left wing) affected areas is on the table of finance ministry, a proposal to this effect already rejected during tenure Shri Pranab Mukherjee citing too much demand for funds and want of allowing private players as service providers to make it more competitive.
  • The provision of connectivity in naxal, maoist affected areas a project designed by current FM P.Chidambaram for improving security is likely to get its allocation this time.
  • Ultimately our wish let there be inclusion, improved connectivity and security.

courtsey: This was a guest article by Mr.Manikandan

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4 Comments on “[Yearbook] Universal Service Obligation Fund (USOF)”

  1. Mrunal pls edit the guest articles because your style of writing is excellent, the articles miss that logical flow. Thanks

  2. so ask other players to use established facilities in rented basis.

    WHAT DOES IT MEAN?

  3. @Nidhi:
    It means other players like reliance should pay rent to BSNL for using infrascture like Mobile towers,cables created by BSNL

  4. Mrunal, u write so good that everyome undrstands very fast and very easy and very nicely. Mruanl it is my request u print your books. All will buy. I will buy. Entire India will buy.

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