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Reliance Jio has asked the Telecom Regulatory Authority of India to stop collecting from telecom operators contributions to the Universal Service Obligations (USO) fund until the existing corpus is utilised.
Jio said the fund has a corpus of ₹58,000 crore, therefore operators need not contribute more. Telcos annually pay 8 per cent of their adjusted gross revenue as licence fee levy. Of this, 5 per cent reportedly goes to the USO fund, which the government set up to help take mobile and internet connectivity to rural areas. The fund’s implementation, however, is marred by failed projects and faulty bidding processes. For instance, the ambitious optical fibre project BharatNet has been delayed due to procedural issues and lack of coordination among departments.
Jio has asked TRAI to reduce the licence fee to 1 per cent to cover licensing and regulatory costs.
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5G is expected to deliver download speed 10 times faster than 4G services.“Fund levy is the biggest contributor to licence fee levy and, in current scenario of over ₹58,000 crore unutilised USO fund, continuing with this levy is excessive and anti-consumer. This part of the USO levy should be done away with till the available USO fund is not utilised and the licence fee should be limited only to cover the licensing and regulatory cost, which will be less than 1 per cent of the revenue,” Reliance Jio said.
Cellular Operators Association of India (COAI), which represents telecom operators, echoed Jio’s views: “(TRAI must)..... prioritise utilisation of the current funds available in USO fund, that is, ₹590.82 billion [₹59,082 crore], for enhancing the mobile connectivity to the uncovered villages and for the fiberisation of the gram panchayats under the BharatNet Project.”
“The Indian telecom sector is a heavily taxed sector amongst the Asian countries. The contribution to the USO Fund by telecom service providers is equivalent to 5 per cent of AGR [adjusted gross revenue] paid on quarterly basis. Considering the investments that are required to be put in by the TSPs as capex for acquiring 5G spectrum and for rolling out 5G services in the country, we believe that this is a high time that the contribution made by the TSPs towards the USOF are abolished or should be brought down to 1 per cent,” COAI noted.
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