Betting high on the its rural thrust, the government is mulling to tweak the Universal Service Obligation (USO) Fund rules in the next two months to enable telecom companies to have an access to the over Rs 11,000 crore fund. The fund under the USO, mandatorily lying with the government, is expected to give a booster to the industry in pursuing rural telephony.
Communications minister A Raja has said that the ministry was mulling to remove the rigidity in USO Fund rules and make it more flexible for telecom companies to increase rural penetration. He also added the new rules would do away with the tender system for allotting funds to operators, unnecessarily prolonging the procedural formalities.
USO funds are designated for infrastructure development in rural areas by floating bids by its administrator. In the bidding, interested telcos vie for setting up the infrastructure and hence the whole process becomes time consuming. Owing to rigidity in rules for releasing funds, over Rs 11,000 crore of USO funds lie idle with the Consolidated Fund of India.
The aim of setting up USO Fund was mainly providing an access to basic telegraph services in the rural and remote areas at affordable and reasonable prices.