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USO Fund support for broadband in rural areas

Thomas K. Thomas

To promote more usage

New Delhi , June 7

In a bid to boost broadband penetration in the country, the Department of Telecom has decided to extend support from the Universal Services Obligation (USO) Fund to operators offering broadband services in rural areas. This is in addition to the earlier decision to support cellular telephone infrastructure in the villages through the USO Fund.

DoT has formed a high-powered committee to look into the modalities of amending the Indian Telegraph Act 1885 in order to accommodate monetary support for broadband services. The committee comprises the USO Fund Administrator and seven other high-ranking DoT officials. The committee has already met once on May 30 to discuss the proposed amendments.

The Government had earlier announced its decision to expand the scope of USO Fund to support cellular services. The decision to include broadband services in the scope of USO Fund will benefit companies such as Bharti Airtel, Reliance Communications Venture, Bharat Sanchar Nigam Ltd and also smaller operators such as Hathway and Dishnet. The move comes after suggestions made by the Telecom Regulatory Authority of India (TRAI) and demands made by the industry.

The growth of broadband in the country has been sluggish with just 1.5 million subscribers, which is far short of last year's target of 3 million users by December 2005.

The Prime Minister's Office has also set up a sub-committee to look into issues such as unbundling of last mile. The TRAI has suggested giving fiscal sops to users and companies that promote broadband usage.

Even as these measures are being discussed, DoT has sought to utilise the USO Fund, which was created in 2004, to finance fixed line telephone projects in villages.

All the telecom operators contribute 5 per cent of their annual revenues towards the fund. At the end of 2005-06 the fund had Rs 7,200 crore lying unused.

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