The Telegraph
Since 1st March, 1999
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Fund wastage irks private telecom firms

New Delhi, Nov. 15: Private fixed-line operators are unhappy over the non-utilisation of the more than Rs 1,200-crore universal service obligation fund even as the government mounts pressure on them to meet their village public phone targets.

ICICI Bank had been appointed to develop a bidding process model for the communications ministry to auction funds from the USO levy and the National Council for Applied Economic Research (NCAER) was asked to determine the benchmark costs for it.

ICICI Bank has submitted an interim report, but the government has yet to take any action. At a recent meeting with the communications ministry, the private operators pointed out that this amount, if allocated, could be used immediately to meet the VPT targets.

“The Telecom Commission has already approved the appointment of NCAER to initiate the study to determine the subsidy requirements for meeting the USO, which is to be completed in the next four months. We will have to wait for ICICI Bank to develop the bidding process for auctioning on the least quoted subsidy support basis,” officials in the communications ministry said.

Under the ‘least quoted subsidy support basis’ model, the service provider who quotes the least amount for setting up a village public telephone or any other related work will get the necessary funds.

“The bidding process will be devised after the finalisation of the benchmark costs. Currently, 5 per cent of the adjusted gross revenue is being charged from the eligible licencees as a universal service levy and is being kept under a transient head of account till the final head of account is allocated by the finance ministry,” communications ministry sources said.

Last year, the Telecom Regulatory Authority of India (Trai) had suggested the imposition of a universal service levy as part of the total licence fee to be paid by various service providers like basic, cellular, STD, ISD, paging and by infrastructure providers.

The funds created by the universal service levy are to be used in rural and remote areas on both public access telephones village public telephones (VPTs). The management of USO and its administration is still a contentious issue with private telecom operators—both fixed and cellular—demanding an independent authority to determine fund allocations.

Former Telecom Commission chairman and communications ministry secretary Shyamal Ghosh is currently the USO administrator.

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