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TRAI moots USO fund to support BSNL’s rural biz

TRAI moots USO fund to support BSNL’s rural biz
PTI
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First Published: Mon, Jan 21 2008. 05 35 PM IST
Updated: Mon, Jan 21 2008. 05 35 PM IST
New Delhi: Telecom regulator TRAI proposed to support state-run telecom major BSNL’s non-viable fixed-line business in rural areas after abolition of the access deficit charge (ADC), a levy on private players to promote rural telephony, in 2008-09 on 21 January.
The watchdog has suggested using a part of universal service obligation (USO) fund for supporting BSNL’s unviable fixed-line business in rural lines, a statement said.
In this regard, TRAI initiated a consultation process on ADC and its subsumption into USO fund.
It said the proposal if implemented would pave the way for lower telecom tariffs, higher growth, especially in rural areas, reduction in grey market and removal of market aberrations caused by ADC.
ADC is being levied on all private telecom operators to fund BSNL’s telephony business in rural areas. However, ADC would be phased out by next year. The established ADC framework envisaged that it would be a depleting regime and reduced to zero in 2008-09.
BSNL is maintaining a fixed wireline network with a large rural footprint and providing services in remote and far-flung areas.
The total support provided to BSNL up to 2006-07 since its formation in various forms, license fee, spectrum charges, ADC funding and exemption on entry fee was about Rs31,500 crore, it said.
With the phasing out of ADC, there may be a scope to lower the entry barrier in rural areas and making services affordable without disturbing the existing policy of forbearance on mobile tariff, the statement said.
TRAI has asked for all stakeholders comments by February 11.
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First Published: Mon, Jan 21 2008. 05 35 PM IST