Universal Service Obligation Fund

About USOF

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.

Foundational Pillars of USOF

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.

UAL

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.

Project funded by USOF

BharatNet

BharatNet is a project of national importance which aims to connect all 2.5 lakh gram panchayats through optical fibre. It was launched in 2011.
The project is implemented by Bharat Broadband Network Ltd (BBNL), a special purpose vehicle set up under the Department of Telecommunications (DoT).
The entire project is being funded by Universal Service Obligation Fund (USOF).
The objective is to facilitate the delivery of e-governance, e-health, e-education, e-banking, Internet and other services to rural India.

- Last year, the Union Cabinet has accorded approval for revised implementation strategy of BharatNet through Public Private Partnership mode in 16 States of the country. BharatNet will now extend upto all inhabited villages beyond Gram Panchayats (GPs), in the said States.

It should be noted that a gram panchayat may consist of one or more villages, depending on their population.

The States covered under the Cabinet approval are Kerala, Karnataka, Rajasthan, Himachal Pradesh, Punjab, Haryana, Uttar Pradesh, Madhya Pradesh, West Bengal, Assam, Meghalaya, Manipur, Mizoram, Tripura, Nagaland and Arunachal Pradesh. An estimated 3.61 lakh villages including GPs will be covered.
The PPP Model for BharatNet will enhance efficiency, quality of service, consumer experience and leverage private sector expertise, entrepreneurship and capacities for accelerating achievement of digital India.

Other Projects funded by USOF include

Universal Service Obligation Fund (USOF), a body under the Department of Telecommunications, officially launched Telecom Technology Development Fund (TTDF) Scheme.
TTDF aims to fund R&D in rural-specific communication technology applications and form synergies among academia, start-ups, research institutes, and the industry to build and develop the telecom ecosystem.
Additionally, the Scheme aims to promote technology ownership and indigenous manufacturing, create a culture of technology co-innovation, reduce imports, boost export opportunities and creation of Intellectual Property.
Under the scheme, USOF is also targeting to develop standards to meet countrywide requirements and create the ecosystem for research, design, prototyping, use cases, pilots, and proof of concept testing, among others.
The scheme entails grants to Indian entities to encourage and induct indigenous technologies tailor-made to meet domestic needs.

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