Universal Service Obligation Fund

In 2003, the Universal Service Obligation Fund (USOF) was set up by The Indian Telegraph (Amendment) Act, 2003 which gave its statutory status.
The main aim of USOF is to provide access to telecom services in a non-discriminatory manner to people in the rural and remote areas at affordable and reasonable prices, thereby bridging the rural-urban digital divide.
It also aims at equitable distribution of the fruits of the telecom/digital revolution and fair allocation of national resources via targeted subsidies.

Availability: the level of service should be the same for all users in their place of work or residence, at all times and without geographical discrimination
Affordability: for all users, the price of the service should not be a factor that limits service access
Accessibility: all subscribers should be treated in a non-discriminatory manner with respect to the price, service and quality of the service, in all places, without distinction of race, sex, religion, caste etc.

USOF inflow comes from the collection of Universal Access Levy (UAL) through the license fee charged on licensees of the Department of Telecommunications @ 5% of the adjusted gross revenue (AGR).
For commercially non-viable rural and remote areas, USOF provides subsidy support in the form of Net Cost or Viability Gap Funding (VGF) to incentivize telecom service providers.
It should be noted that USOF is a non-lapsable fund, i.e., the unspent amount under a targeted financial year does not lapse and is accrued for next years’ spending.

- BharatNet is a project of national importance which aims to provide Broadband Connectivity to all the 2.5 lakhs (approx.) Gram Panchayats.
- The entire project is being funded by Universal service Obligation Fund.

The project is implemented by Bharat Broadband Network Ltd (BBNL), a special purpose vehicle set up under the Department of Telecommunications.

The objective is to facilitate the delivery of e-governance, e-health, e-education, e-banking, Internet and other services to rural India.

For making available high quality and high speed internet access to the States of North Eastern Region of the country, Universal Service Obligation Fund has signed an Agreement with Bharat Sanchar Nigam Limited (BSNL) for hiring of 10 Gbps International Bandwidth for Internet Connectivity to Agartala from Bangladesh Submarine Cable Company Limited (BSCCL), Bangladesh via Cox Bazar/Kuakata.

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