According to business groups, the new telecom law should freeze USOF fees

The Universal Service Obligation Fund (USOF) fee paid by telcos should be subsetted or placed on hold till the present existing money is depleted, according to major industry organisations including ASSOCHAM and the Internet and Mobile Association of India (IAMAI).

In answer to the Department of Telecommunication’s (DoT) discussion paper on the necessity for a fresh legal framework to regulate the nation’s telecom market, ASSOCHAM and IAMAI have already provided their opinions to the DoT. All partners had been asked for their opinions and comments by the DoT.

The DoT had stated in its discussion paper that it was considering reforming the USOF and swapping it out for a Telecom Development Fund. The decision is noteworthy since carriers yearly pay the USOF a sizeable 5 per cent of AGR, or approximately Rs 7,100 crore (based on the most recent numbers, though it has occasionally reached as high as Rs 10,000 crore). There is now a Rs 58,569 crore excess in the fund that has not been utilized.

ASSOCHAM stated in a draught note that the USOF fee should be terminated as the private enterprise has played a crucial role in attaining the goals of remote connectivity by deploying telecom networks in remote and disconnected areas. 

ASSOCHAM also makes the argument that other state money should be used to support activities unconnected to the goals of the fund, such as exploration and creation of new technologies, the growth of job creation and training, and other initiatives.

Similar arguments have been made by IAMAI, which emphasises that just 50% of the USOF’s money have been used to support a connection in rural India, which was the program’s main goal.