USOF successor to focus on indigenising tech, hiring global bandwidth

Source: The post is based on the article “USOF successor to focus on indigenising tech, hiring global bandwidth” published in the Business Standard on 17^th November 2022.

What is the News?

The Telecommunication Development Fund is a new avatar of the Universal Service Obligation Fund (USOF).

About the Telecommunication Development Fund

The Draft Indian Telecommunication Bill,2022 proposes to replace the Universal Service Obligation Fund(USOF) with the Telecommunication Development Fund(TDF).

The fund will shift focus to indigenising telecom technology, hiring international bandwidth, and laying submarine cable lines, among other things.

About USOF

The USOF funds projects that boost mobile, broadband connectivity in rural and remote areas.

It also looked after the comprehensive telecom development plan in the Northeastern states and the government’s flagship BharatNet project.

About the Telecom Technology Development Fund (TTDF)

The fund aims to fund research and development in rural-specific communication technology applications. The government has mandated that 5% of the annual collections of the USOF be allocated to the TTDF starting from 2021-22.

Why are telecom companies opposing the creation of the Telecommunication Development Fund?

Funds for the USOF come from the collection of Universal Access Levy (UAL) from telecom service providers. They have to pay 5% of their adjusted gross revenues annually to the fund.

Telecom companies have repeatedly argued that the government holds onto UAL simply as a source of discretionary funds. For example, a cumulative Rs 1.35 trillion was collected by the government till October end. But the fund has a surplus of Rs 64,774 crore that has not been used so far. Hence, the telecom companies argue against the creation of separate fund.