Trai for autonomous status of USOF, separation from DoT

Written by Corporate Bureau | New Delhi | Updated: Mar 20 2009, 05:31am hrs
Concerned that the rural telephony is not growing at the desired pace and the disbursement of the universal service obligation fund (USOF) is not effective enough, the Telecom Regulatory Authority of India (Trai) on Thursday recommended separation of the USOF from the department of telecommunications and make it an autonomous body on the lines of the National Highways Authority of India.

The regulator has said that this would ensure fast and flexible disbursement of funds from the USO which was set up to facilitate setting up of mobile network in the rural areas.

The Trai in its recommendations on growth of rural telephony on a suo motu basis has said that the USO fund Act/ Rule should be so amended that the funds accruing to USOF through levy on mobile operators is directly managed by the organization and is not routed through the budgetary process of the union government.

Currently all operators pay 5% of their adjusted gross revenue (AGR) to the USOF.

Another recommendation by the Trai is that the USOF should follow the bidding process for awarding projects only where it is necessary and should concentrate primarily on planning and monitoring of the implementation of the schemes.

According to the regulator, the total subscribers as on January 2009 were 400.04 million, out of which only 27.6% were rural subscribers, which constitute 70% of the total population of the country. Citing another lopsided figure the regulator noted that last December, the rural tele-density was12.59 while urban tele-density was as high as 81.38.

Trai has said USOF subsidy has also not spurred investments in rural areas to the desired level. There were still a number of constraints that needed to be addressed to encourage the telecom service providers to move to these apparently less lucrative markets. Hence the USOF administrator should be empowered effectively in terms of administrative, financial powers and ultimate decision-making.