The Department of Telecommunications (DoT) has sought clarifications from the Telecom Regulatory Authority of India (Trai) on its recommendations on the universal service obligation (USO) fund.
DoT has asked for clarifications on major issues such as the total size of the fund and its application. "The application of funds and the main beneficiaries are crucial, as the USO fund will have a major role in improving the tele-density in the country," top DoT officials said.
As the telecom regulator has not yet replied to certain clarifications sought by the DoT, there could be some more delay in finalising the USO fund, the officials said. According to earlier estimates, the corpus of the fund was between Rs 1,500-2,000 crore.
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The fund, to be used for setting up telephony networks, mostly in rural areas, would comprise contributions from all telecom service providers in the country. The USO fund would comprise five per cent of the revenue per year earned by telecom service providers.
Trai, in its recommendations, had suggested setting up of an independent USO administrator and a six-member board to implement the USO policy by April 1, 2002. Trai had also said all telecom operators and carriers, such as cellular, basic and long-distance operators, should be asked to contribute to the USO fund.
Value-added service providers, such as Internet, e-mail or voicemail service providers, should be exempted. Full compensation, including operating and capital costs for providing telephone in economically-unviable areas, should be provided only to those operators who install rural telephones after April 1, 2002, Trai said.
The constitution of the fund is expected to provide a fillip to rural connectivity.
At present, rural tele-density stands at 0.6 per cent against the national average of about 4 per cent. The Centre, which is expecting a 9 per cent tele-density by 2007, is planning to connect all villages during the current fiscal.
The main objective of the USO fund is to provide nationwide non-discriminatory telecom access -- even in uneconomic remote and rural areas -- at an affordable price. As per the licence conditions, all cellular and basic telephony companies will have to meet certain obligations regarding their coverage.