Telecom Lead India: GSMA has urged governments and telecom regulators to take a re-look at their approach to Universal Service Fund (USF) charges.
The new demand by GSMA follows a research on USO Fund that says most funds are not succeeding in delivering their stated goal of widening access to telecommunication services.
This reflects mismanagement of USF in India as well. For instance, India’s Department of Telecommunication collected Rs 37,224 crore through USO Fund during 2002-03 to 2010-11, but utilized one-third of the amount.
Since the government disbursed only Rs Rs 13,471 crore for promoting rural telecom and other purposes, there was a demand to scrap USF in India. The USO Fund was set up in April 2002 for achieving universal service objectives emphasized in the National Telecom Policy (NTP) 1999.
GSMA says more than one-third of the 64 funds surveyed have yet to disburse any of the contributions they have collected and that more than $11 billion remains undisbursed, money that could otherwise be used to extend rural coverage or lower the cost of mobile ownership.
According to GSMA, USOF in India imposes approximately 5 percent levy on operator revenues, despite the fact that is contains over $4 billion of accumulated funds.
India is not alone as regards the collection of substantial amounts of money from the mobile industry, for example in Cote D’Ivoire and Paraguay, the USF represents in excess of 0.6 per cent of the countries’ GDP.
Tom Phillips, chief regulatory and government affairs officer, GSMA, said: “Despite the fact that there is an ever-increasing amount of money sitting unused in these funds, governments continue to collect still more from the mobile operators. The situation needs urgent government review and attention, as the money collected to date far exceeds the amount that is needed to ensure universal access,” said.
GSMA urged governments to close down USF in most cases, and utilize funds to extend access to mobile services to those unable to afford them, or those groups that live in remote areas.
Meanwhile, Colombia offers an outstanding example of best practice in the administration of USFs. The Colombian authorities have recently restructured the USF approach to reduce the burden placed on operators.
