LIRNEasia research on Telecom Regulatory Environment (where India gets the lowest scores on the USO dimension) shows that Indian USO policy and implementation are flawed. LIRNEasia research on teleuse at the Bottom of the Pyramid shows clearly that lowering connection charges and keeping the use charges low are critically important in connecting the next billion. The policy recommendation that flows from this, made at meeting of regulators in New Delhi on the 15th of July, is that the USO levy should be phased out and the existing funds be disbursed as quickly as possible. But it appears that the Department of Telecommunications and the new Minister think otherwise:
Operators had said that since the USO fund has over Rs 10,000 crore lying unused, the Government should consider lowering the contribution made by the telecom firms. “We realise that USO is an important tool to enable telecom services in rural areas. We have been contributing 5 per cent of our revenues annually towards it for the past so many years. However, now that the fund has surplus amount, which is enough to finance the new mobile and broadband projects, the levy should be reduced,” said a CDMA operator.The operators proposed that if the levy was reduced, they would reciprocate by dropping tariffs even further. Telecom industry generates revenues of Rs 80,000 crore and a 2.5 per cent reduction in the levy would have meant savings of around Rs 2,000 crore for the operators.
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