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Government to spend Rs5,000 crore from USOF on subsidy to telcos news
02 June 2011

The telecom ministry plans to spend up to Rs5,000 crore from the Universal Service Obligation fund (USOF) to give subsidy to the telecom operators for providing broadband services in rural parts of the country.

USO Fund was set up in 2002 to provide mobile services and broadband connectivity in rural and remote areas of the country and, at the end of FY'11, the USOF had a corpus of Rs16,803.84 crore.

The resources for USOF are raised through a Universal Service Levy (USL), which has been fixed at 5 per cent of the Adjusted Gross Revenue (AGR) of all Telecom Service Providers except the pure value added service providers like internet, voice mall, e-mail service providers etc.

The ministry has already floated the draft tender seeking comments from various stakeholders.

According to a source, the telecom department has received comments from almost every telecom operator and the associations and the ministry would proceed to float the tender at an early date.

Under the 'Rural Wireline Broadband' scheme of USOF, rural and remote areas had been provided a total of 2,61,413 broadband connections and 2,506 kiosks till 31 January 2011.

Telecom regulator TRAI had, last month, objected to allowing state-run BSNL to functioning as an execution body for the National Broadband Plan (NBP). The regulator had said this in its recommendations on NBP submitted to the telecom ministry.

When asked for clarifications on reasons for TRAI's objections to state-run BSNL functioning as the execution body for the project, the sources said they had made some comments which were being taken into account.

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Government to spend Rs5,000 crore from USOF on subsidy to telcos