DoT demands Rs 2,000 cr more for universal fund

Posted on September 24, 2006 / 2 Comments

Joji Thomas of the Hindu Buisness Line reported this on August 21, 2006. LIRNEasia research by Payal Malik had recommended USO funds should be technology neutral as well as fund infrastructure creation, but the funds from the USF are not being released as mentioned in this report. Read on…

JOJI THOMAS PHILIP NEW DELHI
[ MONDAY, AUGUST 21, 2006 10:27:47 AM]

DEPARTMENT of telecom has demanded that the finance ministry allocate an additional Rs 2,000 crore towards the Universal Service Obligation Fund (USOF), over and above the Rs 1,500 crore that has been allocated in the Union Budget.

It has also said that all telecom companies should pay 5% of their adjusted gross revenue towards the USOF, which is used for building and supporting telecom infrastructure in rural India.

DoT move is likely to cause a showdown with the finance ministry . This is because, DoT has backed its demand by stating that the unutilised amount from this fund stood at Rs 7, 206.12 crore in March 2006, and would swell to Rs 9,194.12 crore by the end of this fiscal.

Besides, the TRAI, in a study, has also estimated that the unutilised USOF would increase to Rs 25, 044.2 crore by 2010.

“The expenditure under USOF till June 2006 is Rs 121.34 crore against the budget provision of Rs 1,500 crore. A sum of Rs 700 crore is expected to be utilised by the end of September 2006. The expected requirement for the current year is Rs 3,358 crores,” DoT said. Providing further details, the department added that ongoing projects (inclusive of liability) would require Rs 1,758 crore while infrastructure projects would cost an additional Rs 1,600 crore in this fiscal.

Under current norms, the USOF can only be used to support fixed line services. Industry watchers share the view that DoT’s demand that this fund be enhanced to Rs 3,500 crore for this fiscal comes in the wake of the department finalising the proposal to extend the support to mobile services of private operators in rural areas through a bidding process.

2 Comments

himmy
April 19, 2007, 11:11 am
You reporting is incorrect. Joji Thomas is not with Hindu Business Line but with Economic Times. That is where the story appeared.
Payal Malik
April 22, 2007, 11:50 am
Thanks for pointing this out. Thomas K.Thomas is from Hindu Business Line. I tried checking where this article appeared but could not, but Joji Thomas is with ET so this is from ET.