Thursday, October 27, 2011

Universal Service Obligation Fund [ USO ] of India - A Perspective.

Govt. of India has established the Universal Service Obligation [USO] Fund under the DOT,this fund is utilising for the rural areas , because lower income,lower population density and lack of commercial activities effects the telecom services providing with huge amount of investment by the operators.To compassionate this losses, the Govt.of India has providing the USO Fund to the rural telecom operators.
  The New Telecom Policy - 1999 (NTP’99) provided that the resources for meeting the Universal Service Obligation (USO) would be raised through a ‘Universal Access Levy (UAL)’, which would be a percentage of the revenue earned by the operators under various licenses. The Universal Service Support Policy came into effect from 01.04.2002. The Indian Telegraph (Amendment) Act, 2003 giving statutory status to the Universal Service Obligation Fund (USOF) was passed by both Houses of Parliament in December 2003. The Rules for administration of the Fund known as Indian Telegraph (Amendment) Rules, 2004 were notified on 26.03.2004. As per the Indian Telegraph Act 1885 (as amended in 2003, 2006 and 2008), the Fund is to be utilized exclusively for meeting the Universal Service Obligation.



USO Fund Definition :
As per the Indian Telegraph Act 1885 [as amended in 2003 and 2006] Universal Service Obligation is defined as access to Telegraph Services to people in Rural and Remote areas at affordable and reasonable prices.

Importance of Telecom Connectivity :
[A].Economic Benifits
[B].Social Benifits.

The USO Fund aims to :
* Provide widespread and non-discriminatory access to quality ICT services at affordable prices to all people in Rural and Remote areas.
* Provide and effective,powerful linkage to the hinterland thereby mainstreaming the population of Rural and Remote parts of the country.
* Ensure the universal services are provided in an economically efficient manner.
* Ensure that by developing hitherto unconnected areas, the benefits of inclusive growth are reaped by our nation,bringing in its wake rapid socio-economic development and improved standard of living.

Schemes envisaged to be undertaken under USO Funding :

(i)    Stream-I: Provision of Public Telecom and Information Services  
(a)     Operation and Maintenance of Village Public Telephone in the revenue villages identified as per Census 1991 and Installation of Village Public Telephone in the additional revenue villages as per Census 2001.- For installation of Village Public Telephone in the revenue villages, identified as per 1991 Census, only the Operating Expenses and Revenue shall be taken into account for determining the Net Cost.  For the additional revenue villages identified as per 2001 Census, Capital Recovery in addition shall also be taken into account for determining the Net Cost.          
Provided that in the case of the Village Public Telephone which are still to be installed in the villages identified as per Census 1991, Capital Recovery shall also be taken into account while determining the Net Cost. 
(b)        Provision of additional rural community phones in areas after achieving the target of one Village Public Telephone in every revenue village.- Where in a village the population is more than 2000 and no public call office is existing, a second public phone shall be installed and for the purposes of determining the Net Cost, Capital Recovery, Operating Expenses and Revenue shall be taken into account.
(c)            Replacement of Multi Access Radio Relay Technology Village Public Telephone installed before 1st day of April 2002.- Capital Recovery, Operating Expenses and Revenue shall be taken into account for determining the Net Cost.  
Note - Unless otherwise specified by the Central Government, the Secondary Switching Area shall be taken as a unit for the purpose of arriving at the Net Cost for activities specified in items (a) to (e) of stream I. 
(ii)        Stream-II � Provision of household telephones in rural and remote areas as may be determined by the Central Government from time to time: 
(a)      For household Direct Exchange Lines installed prior to 1st day of April, 2002, the difference in rental actually charged from rural subscribers and rent prescribed by Telecom Regulatory Authority of India for such subscribers shall be reimbursed until such time the Access Deficit Charges prescribed by Telecom Regulatory Authority of India from time to time take into account such difference.  
(aa)      For Household Direct Exchange Lines installed prior to 1st day of April 2002, an amount of maximum Two Thousand Crore rupees per annum for a period of three years shall be reimbursed to the eligible operators, from the date the Indian Telegraph (Amendment) Rules, 2008 come into force, for operational sustainability of rural wirelines in lieu of Access Deficit Charges being phased out.   
(b)        For household Direct Exchange Lines installed after 1st day of April, 2002, Capital Recovery, Operational Expenses and Revenue shall be taken into account to determine the Net Cost. 
Note - Unless otherwise specified by the Central Government, the Short Distance Charging Area shall be taken as a unit for the purpose of arriving at the Net Cost for activities specified in item (b) of Stream II.  
(iii)       Stream-III: Creation of infrastructure for provision of Mobile Services in rural and remote areas:  
(a)        The assets constituting the infrastructure for provision of mobile services shall be determined by the Central Government from time-to-time.  
(b)        A percentage of the Capital Recovery for the infrastructure for provision of mobile services shall be taken into account to determine the Net Cost.  
(iv)       Stream-IV:   Provision of Broadband connectivity to villages in a phased manner  
A percentage of the Capital Recovery for the infrastructure for broadband connectivity shall be taken into account to determine the Net Cost.  
(v)        Stream-V : Creation of general infrastructure in rural and remote areas for development of telecommunication facilities  
(a)         The items of general infrastructure to be taken up for development shall be determined by the Central Government from time to time.                                               
(b)            A percentage of the Capital Recovery for the development of general infrastructure shall be taken into account to determine the Net Cost. 
            Note - Unless otherwise specified by the Central Government, the revenue district/ group of revenue districts shall be taken as a unit for the purpose of arriving at the Net Cost for the activities specified in Streams III, IV & V.  
(vi)  Stream-VI: Induction of new technological developments in the telecom sector in rural and remote areas  
Pilot projects to establish new technological developments in the telecom sector, which can be deployed in the rural and remote area, may be supported with the approval of the Central Government.  

IMPLEMENTATION STATUS OF THE SCHEMES
1.0      ONGOING SCHEMES 
1.1       PUBLIC ACCESS 
1.1.1      Village Public Telephones  
Agreements were signed with M/s BSNL and six Private Basic Service Operators (PBSOs) in March 2003 for operation and maintenance of existing Village Public Telephones (VPTs) in the country in the identified revenue villages as per Census 1991. In addition, subsidy support is also admissible for the VPTs installed in additional revenue villages as per census 2001.  About 96% of the eligible Census 2001 inhabited revenue villages are already covered with Village Public Telephones (VPTs). This includes the VPTs provided under Bharat Nirman given at para 1.1.2 & 1.1.3 below. 
The details of VPTs being maintained by Universal Service Providers (USPs), namely,M/s.BSNL (www.bsnl.co.in), RIL (www.relianceinfocom.com), TTL & TTL (MH (www.tatateleservices.com), Bharti (www.airteltelephone.com),  HFCL (www.hfclconnect.com) and Shyam Telecom (www.hellorainbow.com) are available on the respective websites of these service providers. 
The Achievements of VPTs in various states is given in Table 1.
1.1.2   New VPTs in the Uncovered villages 
Agreements were signed with M/s BSNL in November 2004 to provide subsidy support for provision of VPTs in 66822 no. of uncovered villages as per Census 1991 in the country excluding those villages having population less than 100, those lying in deep forests and those affected with insurgency. Subsidy support in the form of Capital and Operational expenses will be provided for provision of these VPTs for a period of five years from the date of installation of the VPTs. The provision of VPTs in these villages has been included as one of activities under Bharat Nirman Programme.Some of the VPTs, which were initially proposed to be provided on DSPTs, are also being provided through the Wireless coverage now available in these villages on account of network expansion. The VPTs were to be provided in phases covering 20%, 40% and 40% respectively over a period of three years.
The details of the villages to be covered under this programme are placed on the DoT website www.dot.gov.in & Bharat Nirman website  www.dot.gov.in/bharatnirman.htm
The targets and achievements for VPTs in uncovered villages are given in  Table IA.  
             
1.1.3   1.1.3  New VPTs to be provided in the remaining villages as per Census 2001 
As per Census 2001, there are about another 62,443 uncovered villages, which are yet to be provided with VPT facility. Such uncovered villages shall also be provided with VPT facility with subsidy support from USOF. Agreements in this regard have been signed with BSNL on 27.02.2009 . 
]The targets and achievements for VPTs in uncovered villages are given in  Table IB.  
 1.1.4  Replacement of MARR based VPTs  
1,86,872 no. of VPTs which were earlier working on Multi Access Radio Relay (MARR) technology and installed before 01.04.2002 are to be replaced by reliable technology equipment as most of these were non functional. Both capital and operational expenses are to be supported for this activity. The number of MARR VPTs to be replaced has subsequently been revised as 185121.
The targets and achievements for replacement of MARR VPTs are given in Table II.  
1.1.5   Provision of Rural Community Phones
46,253 villages with population exceeding 2,000 and without a Public phone facility are being provided with a Rural Community Phone (RCP). Agreements were signed with M/s BSNL and M/s RIL in September 2004 to provide 24,822 and 21,431 RCPs respectively in these villages over a period of three years i.e. by 30.09.2007. These installations are eligible for both Capital and Operational expenses. The number of RCPs to be provided has subsequently been revised as 40705 [BSNL: 21958,   RIL: 18747].
The targets and achievements for RCPs are given in Table III. 
1.2      INDIVIDUAL ACCESS
1.2.1   RDELS (01.04.05 to 31.03.07)
Agreements were signed with M/s BSNL, M/s RIL, M/s TTL and M/s TTL (MH) in March 2005 for installation of Rural Household Direct Exchange Lines (RDELs) to be installed during the period 01.04.2005 to 31.03.2007. These RDELs were to be installed in 1685 Short Distance Charging Areas (SDCAs) [BSNL: 1267, RIL: 203, TTSL: 172, TTML: 43] where cost of providing telephone connections is more than the revenue earned. Support in the form of front loaded subsidy is being given for all the lines (RDELs) installed from 01.04.2005 to 31.03.2007. The equated annual subsidy where payable, shall be given up to a maximum period of validity of the Agreement (Five years) and validity period ends in March, 2010. Subsequently the cutoff date for installation of the RDELs was extended to 31.3.2010.
The details of the SDCAs where RDELs are to be provided are given in Table IV.  The achievements of RDELs are given in Table V.   
1.2.2   RDELs (01.04.02 to 31.03.05) 
Support is also being extended for 18.65 lakhs rural lines installed between 01.04.2002 and 31.03.2005 at the same rates as applicable for the RDELs at (i) above. Agreements to this effect were signed with M/s BSNL and M/s RIL in May 2005 & August 2005. The equated annual subsidy is to be given for a maximum period of five years from the date of installation of these RDELs. One time front loaded subsidy is payable only for net addition of rural household DELs. 
1.2.3   RDELs (Prior to 01.04.02) 
Support has been extended to nearly 90.5 lakh rural household Direct Exchange Lines (RDELs) installed prior to 01.04.2002 towards the rental differential between the TRAI prescribed rental and the rental charged by the Service Provider. The support was for the limited period of 01.04.2002 to 31.01.2004. The Access Deficit Regime has come into operation from 01.02.2004. 
1.2.4 Rural Wireline Household DELs installed prior to     01.04.2002  
 Based on the recommendations of TRAI, Indian Telegraph Rules (ITR) have already been amended to provide subsidy support to the eligible operators for operational sustainability of Rural Wireline Household DELs installed prior to 01.04.2002 in lieu of ADC being phased out, This support shall be provided for a period 3 years  subject to a ceiling of Rs. 2000 Crore per annum for the country.  
1.3  INFRASTRUCTURE SUPPORT FOR MOBILE   SERVICES
A scheme has recently been launched by USO Fund to provide subsidy support for setting up and managing 7871 (revised to 7436) number of infrastructure sites (towers) in 500 districts spread over 27 states for provision of mobile services in the specified rural and remote areas, where there is no existing fixed wireless or mobile coverage. The infrastructure so created shall be shared by three service providers for provision of mobile services. The agreements effective from 01.06.2007 have been signed with the successful bidders in May 2007.
The State-wise/IP-wise number of towers to be set up under this scheme and the towers commissioned are given in Table VI-A / Table VI-B
1.4      RURAL BROADBAND SCHEMES
1.4.1   Agreement has been signed with BSNL on 20.01.09 to provide 8,61,459 wire-line Broadband connections to individual users and Government Institutions from 27,789 DSLAMs, installed at existing rural and remote exchanges over a period of 5-years, i.e., by  2014. 
           Amendment 3 to the Agreement    
1.4.2   The Service Providers, with valid license from DoT for BSO/UASL, are eligible to apply for the Scheme. Such Service Providers shall have outdoor copper cable network from their existing serving exchange in the rural and remote areas with back-haul & backbone connectivity on OFC.   
            The interested service providers may kindly see the EoI and approach this office with prescribed details by 6th March, 2009, at the following address: 
DDG (BB),USOF
Department of Telecommunication,
Room No. 405, Sanchar Bhawan,
 20, Ashoka Road, New Delhi-110001. 
1.5       Creation of General Infrastructure like OFC in Rural Areas - Augmentation, Creation and Management of Intra-District SDHQ-DHQ OFC Network in Assam
Universal Service Obligation Fund (USOF) of Department of Telecommunications (DoT) has launched a Scheme to provide sufficient back-haul capacity to integrate the voice and data traffic from the access network in the rural areas to their core network by strengthening the OFC network. This scheme considers OFC Network augmentation between the blocks' HQ and Districts' HQ to begin with.
USOF, through this Scheme, shall provide subsidy support for augmentation, creation and management of intra-district SDHQ-DHQ OFC Network on the condition that it will be shared with other Telecom Operators at the rates prescribed in the Agreement. Assam has been taken up first for implementation.  The tender for Assam was floated on 30.10.2009 and BSNL had been declared successful at the subsidy quote of Rs. 98.89 crore and subsequently, an Agreement has been signed with BSNL on 12.02.2010 to implement the scheme in Assam.
Salient Features of the Scheme: This OFC Scheme would be undertaken on BOO model, i.e. build, operate & own basis, and accordingly, BSNL would build, operate, own and manage all the equipment/infrastructure for the provisioned intra-district augmented/created OFC Transport network to connect 354 total locations in Assam that includes 58 en-route/new locations, in addition to 269 SDHQs, in total 27 DHQs.
All locations shall be connected on physical OFC Ring Route(s) with the DHQ node ensuring the cable route diversity and ring capacity of at least 2.5 Gbps, with the capability to efficiently transport various protocols, including TDM, IP, Frame Relay, ATM, etc., for integrated voice, data and video signals in all districts of ASSAM within 18 months from the date of signing of the Agreement. The Agreement shall be valid for a period of seven years from the effective date  
At least 70% of the subsidized bandwidth capacity, created under the scheme, shall be shared with the licensed service providers in the area of ASSAM at a rate not more than 26.22% of the current TRAI ceiling tariffs.      
Archive for OFC Assam Scheme
  •            USOF Scheme for Augmentation, Creation and Management of Intra-District SDHQ-DHQ OFC Network for Transport of Rural/Remote Area Traffic on Bandwith Sharing Basis in the Service Area Assam      (i)EOI : Detailed documentation.
                    (ii) An EOI was invited for short listing of applicants to participate in                                                          the            tender for implementing the above scheme. As per the outcome of the EOI , Three applicants have been short listed to participate . The Tender document is on sale from 30-10-09 to 18-11-09 to short listed bidders.
          Clarification on Tender for USOF Assam OFC Scheme  Details
          Clarification No. 2 - USOF's Tender No. 30-170-2/2006-USF dated 30.10.2009 for �Augmentation of OFC Network- Assam Details 
 
2.0      Planned USF Schemes
2.1      Public Access
2.1.1 Infrastructure Support for Mobile Services (Phase-II) 
It is proposed to cover other uncovered areas in the country through mobile services for which additional towers are being identified. About 11000 towers are proposed to be installed under the second phase of the scheme, which is likely to be launched shortly. The Details of Towers is given in Table VI - D
2.1.2 Wireless Broadband Connectivity for Rural Areas         
         A proposal is also under consideration of the Government to provide subsidy support for Broadband connectivity in rural and remote areas of the country in a phased manner by utilizing the existing passive and core infrastructure available with the Service Providers. It is proposed to provide broadband connectivity to Gram Panchayats, Higher secondary schools and primary health centers in order to provide e-governance and data services to the rural areas.
          
2.1.3  Wireline Broadband Connectivity for Rural Areas 
          Wireline Broadband shall also be supported by USOF wherever feasible.
2.1.4 Augmentation, Creation and Management of OFC Network in service areas other than Assam
           With a view to provide sufficient back-haul capacity to integrate the voice and data traffic from the access network in the rural areas to their core network, USOF has  taken initiative to strengthen the OFC network in the rural and remote areas. This scheme considers OFC Network augmentation between the blocks' HQ and Districts' HQ to begin with. The above Schemes are envisaged to be rolled out during the current Five Year Plan (2007-2012).            
2.1.5   Pilot Projects  
          For induction of new technological developments in the telecom sector on a Pilot Project basis in rural and remote areas, USOF has invited applications from the eligible companies to undertake Pilot Projects for demonstrating their products/ services in the field of Rural Telephony. About Five Pilot Projects are likely to be provided subsidy support at an upper sealing of 50 Lakhs per project during the FY 2009-10.
(1)       Support has been extended for pilot projects to establish new technological developments in the telecom sector which can be deployed in the rural and remote area.
 (2)     Support is also being considered for renewable energy resources (solar, wind,diesel hybrid solutions) for 20 sites on pilot basis. The same shall be extended to some of the locations for second phase of USO Shared  Infrastructure Scheme.
(3)       Support is being considered for mobile charging stations in 5000 villages through TERI projects of Lighting a Billion Lives (LaBL).
System of Inspection and control over the performance of USOF Schemes :
* Agreement terms and conditions to guarantee adherence to QoS.
* Self certification through an affidavit by service providers.
* Deductions for service interruptions.
* Rollout clause.
* Liquidated damages.
* Post payment sample verification.
* Physical inspection
* Annual auditor's certificate
* Recovery of overpayment with penal interest.

           The USOF administration is assisted by 23 controller of communication Accounts [CCA] Offices,spread across India's 22 Telecom Service Areas.These field units of the department of telecom [DOT] have beem delegated the functions of subsidy disbursement and verification of subsidy claims.They assist the USOF Administartion in supervision and inspection of the field level implementation of USOF Agreements.They also liaise with state and local government in this regard.

International Cooperation :
USO Fund Administration of India interacts with International Telecom.Organisation such as International Telecommunication union [ITU],Asia Pacific telecommunication [APT] and USO Funds of other nations.
In December 2007 the USOF Administration,India,gave detailed presentations on its activities to its Vietnamese Counterpart,the relatively newly created Vietnam Telecommunication Fund [VTF] during the latter's visit to India.During this interaction officers on both sides share the USOF perspectives and implementation experience of their respective Governments.
 

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