Both the horses are to be similar in size and strength while pulling a carriage. That was missing between India’s Universal Service Obligation Fund (USOF) and Reliance. As a result, Reliance has walked out of its rural mobile coverage project under the scheme of USOF.
The issue dates back to 2007 when a scheme was launched under the USOF to provide subsidy support for setting up and managing 7,871 infrastructure sites, or telecom towers, in rural and remote areas in 500 districts of 12 states. RCOM and RTL had entered into an agreement with the USOF in June that year, under which they took responsibility for setting up nearly half of these towers.
Under the agreement, USOF had to hand over ready sites by May 2008, which the fund did not do so for another 18 months, as per the companies’ claims. RCOM and RTL then switched off over 1,400 telecom towers between November 16, 2010 and January 20, 2011, citing financial unviability, impairing mobile connectivity which was allegedly in breach of the shared mobile infrastructure norms.
The USOF and Reliance has sued each other. Finally the court has allowed Reliance to quit without paying any penalty or getting compensated. Full report.