What Is Universal Service Obligation Fund?

Universal Service Obligation Fund (USOF), created under Department of Telecommunications, is a roadmap to Digital India. Universal Service is basically to provide affordable and reasonable services to every resident of a nation. The present administrator of USOF is Shri Sanjay Singh.

As per the Indian Telegraph act 1885 (as amended in 2003 & 2006) the main aim of the USOF is to provide connectivity in Indian rural and remote areas at affordable and reasonable price. In order to achieve this objective the USOF generates revenue from the Universal Service Levy, which is 5% of the Adjusted Gross Revenue, from the telecom service providers. The percentage share is decided by the Telecom Regulatory Authority of India (TRAI). The Universal Service levy came into effect from 01.04.2002. Similar to USOF in India Chile has the Telecommunications Development Fund (FDT), Pakistan has the Universal Service Fund Company (USF Co.), Taiwan has the Universal Service Fund (USF), Australia has the Telecommunications Industry Levy (TIL), etc.

The fund generated is used in the following schemes in rural and remote areas of which some are in action and some are completed,

·      provision of public access services, maintenance of village public telephones

·      provision of household telephone services

·      infrastructure and mobile services

·      broadband connectivity

·      induction of new technological developments in telecom sector

·      Rural Household Direct Exchange Lines (RDEL) in Tamil Nadu, Punjab, Nagaland, etc.

·      Village Public Telephone (VPT) in Maharashtra, Orissa, Rajasthan.

·      USOF tower in West Bengal.

Some new schemes initiated by the DoT in order to increase the mobile connectivity in rural areas are

• Installation of mobile infrastructure focusing on network penetration and connectivity.
• Schemes for providing broadband connectivity in rural area, schemes for augmentation of rural optical fibre cable(OFC) network, schemes for Intra-district connectivity in Assam
• Schemes to encourage use of renewable energy resources in rural telecommunications. Installation of solar charges and solar wind hybrid installations, solar mobile charging.

 Some of the ongoing agreements of the USOF:

·    BharatNet NOFN (Non Optical Fibre Network): Its plan is to provide broadband connectivity to 2, 50,000 Gram Panchayats. The project is being led by the PGCIL, RailTel and BSNL. The project is targeted to be completed by 2023.

·    Sanchar Shakti: The project aims to empower women with the help of ICT industry and mobile VAS subscriptions for Self Help Groups.

·   Left Wing Extremists Area: The aim of the project is to provide mobile services areas affected by Left Wing Extremism. The project is headed by BSNL. A total of 1836 sites are identified as LWE effected areas by the Ministry of Home Affairs (MHA) of which at present 363 sites are made operational.

Some other recent developments, is to provide mobile telephony access to 55,000 villages along the Border States and Himalayan region.

According to Government of India (GOI) private providers were not willing to invest Infrastructure in core affected areas and they might misuse government subsidy so BSNL was selected as service provider initially. On 20.01.2009 BSNL had signed an agreement with the USOF for a period of 9 years to provide wire-line broadband connectivity to rural and remote areas. BSNL promises to complete the same by end of the year 2018, of which, a total of 6, 56,345 broadband connections have been provided and 15,671 kiosks have been set up in rural and remote areas (report status 31.01.2015). BSNL has also come with the major project of installation of 25,000 Wi-Fi hotspots in rural areas and the work will commence soon.

Following is the Fund status and the stream-wise distribution of the funds,

[1]Fund Status: Balance of USL amount available as potential fund as on 30.05.2017 is for the financial year 2017-2018 as follows:

Financial Year	UAL collections(Booked figures as per DOT A/cs)	Funds allocated	Funds disbursed	Balance
2016-17	9686.79	7227.03	7227.03	48329.22
2017-18	211.91	3.50	3.50	48537.63
Total	85851.63	37314.00	37314.00

[2] Stream-wise share in the total subsidy disbursed by USOF

Where,

Stream I: Provision of Village Public Telephones & Rural community phones.

Stream II: Provision of Rural Household Wireline Telephones.

Stream III: Provision of Mobile Telecom Services in rural/ remote areas.

Stream IV: Provision of Broadband Connectivity in rural or remote areas

Stream V: Creation of general Telecom Infrastructure in rural or remote areas

Stream VI: USOF pilots for assessing the viability and feasibility of new telecom technologies for rural or remote areas.
At present due to intense pressure and competition in the telecom sector, resulted in falling revenue of telecom companies. Government may reduce the USL as it would bring the license fee component for telecom companies without impacting the governments revenue. IMG would come with its recommendations within few days.

Padmanisha Subramanian
Batch 2017-19
Symbiosis Institute of Telecom Management