10.7. Universal Service Obligation Fund

To give impetus to the rural telephony, Government formed a Universal Service Obligation Fund (USOF) by an Act of Parliament (Indian Telegraph (Amendment) Act, 2003). Various schemes have been launched by USOF with a view to improve the penetration of telecom facilities in rural and remote areas of the country.

The resources for implementation of USOF are raised through a Universal Service Levy (USL) which has presently been fixed at 5% of the Adjusted Gross Revenue (AGR) of all Telecom Service Providers except the pure value added service providers like Internet, Voice Mall, E-Mail service providers etc. In addition, the Central Govt. may also give grants and loans.

The Fund is to be utilized exclusively for meeting the Universal Service Obligation. The latter has been defined in the Act as the obligation to provide access to telegraph services to people in rural and remote areas at affordable and reasonable prices.