Government To Push Rural Telephony – To Amend USO Fund Allocation Rules
Indian Telecom sector has seen tremendous growth in past few years. The growth has largely been concentrated in urban areas where Tele-density has almost reached 100 per cent. The rural telephony although still lags far behind the urban telecom circles.
USO (Universal Service Obligation) funds were raised by the government through a Universal Service Levy (USL), currently fixed at 5% of the Adjusted Gross Revenue of all telecom service providers. All operators including public and private can access the USO funds (grants) to create telephony infrastructure in villages.
Government sensing the inferior treatment given to rural telecom circles by telcos has proposed an amendment to bring flexibility in accessing USO fund. Many telcos are unable to setup their own networks in rural areas due to scaling of cost and lack of enough mobile subscriber availability in those areas.
Thus government is looking at releasing USO funds to telcos without any initial bidding for subsidy. This amendment will facilitate fast set-up of telecom network in rural India by speeding up work for second phase of rural bidding.
Telco’s have already started to participate in rural telephony as rural tele-density has seen a jump of 100 per cent in last one year from 8% to 16%. The flexibility in USO funds can see increase in participation from even new telecom players .
India still needs to encourage innovative Telecom networks by way of power lines as done by Power Grid to provide telephony services in the remotest of areas. Government also needs to put in place a level playing field for private sector Telcos to provide and benefit from the rural telephony.
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