Government has indicated that it may not entertain any proposals to cut the USO Fund levy currently at 5% of the private operators revenue as it does not want rural consumers to be left out.
“There are many suggestions that came from the operators when I met them (on June 22). We want the operators’ financial health to improve but we want to take care of the consumers also. We have to take care of rural India also. Rural people can not be just left out.. they are entitled to the same service that people are getting in any other part of the country”, Telecom Minister Manoj Sinha told Bureaucracy Today .
There is a demand by the operators to scrap or reduce USO Levy to 3%. In their presentation to the Inter-ministerial panel to cut down on current levies, incumbents had insisted upon reduction of licence fee, spectrum usage charges and USO Fund levy to lessen their financial burden. The industry is reeling under about Rs 4.5 lakh crore debt and is looking for way out of this. The IMG is expected to offer solutions in various forms to improve the financial health of the sector.
USO Fund is the lifeline of BSNL’s rural and inhibited areas—like North East and Naxal -- investment in telephone services. It draws funds from USO Fund to offer telecom services there. Apart from private operators’ levy, USO Funds also gets Budgetary support each year.
TRAI had also proposed the same some time ago on rationalisation of levies.