The Department of Telecom has sought more money from the Universal Service Obligation (USO) Fund to be given to BSNL for rural telephone lines.
This is based on the recommendations of Telecom Regulatory Authority of India. TRAI observed that BSNL is maintaining a network with a large footprint and providing services in remote and far-flung areas.
The fixed line rural network that existed prior to April 2002 was primarily set-up with Government funding at high cost and always supported by USO or access deficit charges (ADC) since inception of these regimes.
TRAI put the subsidies payable for eligible rural wireline connections, installed before April 2002, at Rs 1,593 crore for 2011-12. It put the figure at Rs 1,265 crore for 2012-13.
TRAI recommendations
“Accordingly, TRAI has recommended the support of Rs 1,500 crore for the first year (2011-12) and Rs 1,250 crore for the second year (2012-13),” sources in the know of developments said.
The ADC compensates a service provider, mainly the incumbent, for rental or local call charges and any other below cost tariffs to make the basic telecom services affordable to the common man and promote both universal service and universal access.
“TRAI suggested that some form of assistance would be needed to support incumbent in sustaining their non-remunerative operation and this should be given from the USO Fund to BSNL,” TRAI said in its communication to DoT.
The wire-lines, installed by BSNL prior to April 2002, were supported by USO Fund for the period April 2002 to February 2004 on the basis of the difference between regulated rental and actual rental.
But, USO support for these lines were withdrawn from February 2004 since the scope of ADC was increased to take care of the deficit arising out of cost based rental and prevailing rental in rural areas.
However, in view of the TRAI recommendations in 2008 to the Ministry of Communications and IT, BSNL had accordingly been given the subsidy of Rs 2,000 crore a year from USO Fund for the period July 2008 to July 2011.