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Apart from the higher capital cost of providing telecom services in rural and remote areas, these areas

also
generate lower revenue due to lower population density, low income and lack of commercial activity. Thus
normal market forces alone would not direct the telecom sector to adequately serve backward and rural
areas. Keeping in mind the inadequacy of the market mechanism to serve rural and inaccessible areas on
one hand and the importance of providing vital telecom connectivity on the other, most countries of the
world have put in place policies to provide Universal Access and Universal Service to ICT.
The New Telecom Policy - 1999 (NTP99) provided that the resources for meeting the Universal Service
Obligation (USO) would be raised through a Universal Access Levy (UAL), which would be a percentage of
the revenue earned by the operators under various licenses. The Universal Service Support Policy came into
effect from 01.04.2002. The Indian Telegraph (Amendment) Act, 2003 giving statutory status to the Universal
Service Obligation Fund (USOF) was passed by both Houses of Parliament in December 2003. The Rules for
administration of the Fund known as Indian Telegraph (Amendment) Rules, 2004 were notified on
26.03.2004. As per the Indian Telegraph Act 1885 (as amended in 2003, 2006 and 2008), the Fund is to be
utilized exclusively for meeting the Universal Service Obligation.
As per the Indian Telegraph (Amendment) Rules, 2004 which came into effect on 26.03.04, (and were
subsequently amended in November 2006 and July 2008) the following services shall be supported by
the Fund, namely:-

Stream-1: Provision of Public Access Service:


(a) Operation and Maintenance of Village Public Telephones (VPT) in the revenue
villages identified as per Census 1991 and Installation of VPTs in the additional revenue
villages as per Census 2001 (O&M of VPTs, New VPTs PhaseI, , New VPTs PhaseII).
(b)Provision of Rural Community Phones (RCPs) after achieving the target of one VPT
in every revenue village where in a village the population is more than 2000 and no
public call office (PCO) exists, a second public phone shall be installed (Rural Community
Phones (RCPs)).
(c) Replacement of Multi Access Radio Relay Technology (MARR) VPTs installed
before the 1st day of April 2002 (MARR VPTs (1.4.O2 to 3.6.O3), MARR VPTs (w.e.f 1.7.03) ).
Stream-II: Provision of Household Telephones in Rural and Remote Areas as may be
Determined by the Central Government from Time to Time:
(a) For rural household DELs (RDELs) installed prior to 1st day of April, 2002, support
towards the difference in rental actually charged from rural subscribers and rent
prescribed by Telecom Regulatory Authority of India (TRAI) for such subscribers shall
be reimbursed until such time the ADC prescribed by TRAI from time to time takes into
account this difference. Also following the phasing out of the ADC Regime, support for
a limited duration of three years for rural wire line RDELs installed prior to 01.04.02.
(RDELs PRIOR TO 1.4.O2).
(b) Support for RDELs installed after the 1st day of April, 2002 (RDELs (1.4.O2 to 31.3.05),
RDELs (w.e.f 1.4.O5)).
Stream-III:

Creation of Infrastructure for provision of Mobile Services in Rural and Remote Areas.
The assets constituting the infrastructure for provision of mobile services shall be
determined by the Central Government from time to time (Mobile Infrastructure (Phase-I)).

Stream-IV:
Provision of Broadband Connectivity to rural & remote areas in a phased manner (Wire
Line Broadband, Rural Public Service Terminals (RPST)).
Stream-V:
Creation of General Infrastructure in Rural and Remote Areas for Development of
Telecommunication facilities. The items of general infrastructure to be taken up for
development shall be determined by the Central Government from time to time (Optical
Fiber Cable(OFC) for Assam).
Stream-VI:

Induction of new technological developments in the telecom sector in Rural and Remote
Areas: Pilot projects to establish new technological developments in the telecom sector,
which can be deployed in the Rural and Remote Areas, may be supported with the
approval of the Central Government (Solar Mobile Charging Facility(SMCF)).
Initially, as per Indian Telegraph Rules 2004, USOF Administration was permitted to
provide public access and individual access to "basic" service facilities only. These fell
under the purview of Stream I and Stream II respectively. Keeping in view the extraordinary
urban mobile revolution in India, it was appreciated that there is a need for supporting rural
mobile telephony as this would enable faster penetration of services into the rural areas.
Accordingly, DOT initiated action to bring mobile services within the ambit of USOF
activities. The Indian Telegraph (Amendment) Act 2006 was passed on 29.12.2006 to enable
the USOF to support mobile services and broadband connectivity in rural and remote areas.
Indian Telegraph (Amendment) Rules 2006 introduced a number of new schemes under
Stream III-VI, dealing with provision of all types of rural telecom infrastructure.
Ground already covered includes:
Public Access
The provision of public access facilities by way of Village Public Telephones (VPTs) and Rural
Community Phones (RCPs). USOF Administration of India is committed to providing/maintaining a
VPT in every revenue village as per the Census 1991 and Census 2001( O&M of VPTs, New VPTs PhaseI,
New VPTs PhaseII, MARR VPTs (1.4.O2 to 3.6.O3), MARR VPTs (w.e.f 1.7.03) ).

Further, every 1991 Census Revenue village with a population of more than 2000 and no
existing PCO is to be provided with an additional public telephone by way of a
RCP(Rural Community Phones (RCPs)).
Individual Access
One time subsidy support for 9 million Rural Household Direct Exchange Lines
(RDELs) was provided. This was by way of the difference in the rental as per tariff
prescribed by the Telecom Regulatory Authority of India and the actual rental charged
by the Universal Service Provider (USP). A subsidy support is being provided for a

limited duration of three years for wire line RDELs installed prior to 1.4.O2 w.e.f 18
July 2008 (RDELs PRIOR TO 1.4.O2).
Subsidy is being provided for 1.86 million RDELs already installed between 1.4.02 and
31.3.05 in 1685 net cost positive Short Distance Charging Areas (SDCAs)(RDELs (1.4.O2 to
31.3.05)).
Subsidy support is also being extended to RDELs installed between 1.4.05 and 31.3.07
in 1685 net cost positive SDCAs. By 31.3.07, about 2.56 million RDELs had been
provided under this scheme. Period of installation of RDELs under this scheme now
stands extended up to 31.3.2010. (RDELs (w.e.f 1.4.O5))
Mobile Infrastructure
Under this initiative, about 7327 mobile infrastructure sites spread across 500 districts and 28
states of India are being rolled out. This scheme will provide mobile services to about 0.2 million
villages which were hitherto deprived of the same. It is a unique initiative as it is based on sharing
of subsidized passive infrastructure (tower, boundary wall, electric connection, power backup,
security cabin etc) by three telecom service providers who will put up their own subsidized active
infrastructure (BTS. Antenna, Backhaul) and roll out wireless services.( Mobile Infrastructure (Phase-I))
It is also proposed to shortly roll out the second phase of the scheme whereby about 10,000 towers
shall be set up with USOF support to cover uncovered villages/cluster of villages having population
of more than 5000 or more with mobile services.
Pilot Project Scheme
A scheme to induct new technologies on pilot basis has been launched. Subsidy will be provided to
demonstrate new technology through pilot projects in areas of broadband, fixed/wireless telephony,
transmission media, hybrid power, Customer Premises Equipment (CPE) etc. It will be a tripartite
effort amongst the technology provider, Telecom Service provider (TSP) and USOF Administration.
The project must function for at least three months for proper impact assessment. Project results
are to be certified by TEC/CDOT/IIT. A seminar will be held to share and disseminate results. The
upper limit of USOF assistance per project is Rs. 0.5Million.

Scheme for providing Broadband Connectivity in Rural Areas

The scheme envisages leveraging existing telecom infrastructure (wireless, landline and
satellite) to provide broadband connectivity in rural and remote areas. Schools, Common
Service Centres, Primary Health Centres, Panchayats etc. and individuals in rural areas
will benefit from the scheme.

The Wire Line Broadband Scheme: An Agreement has been signed with BSNL in January
2009 for provision of rural (wire line) broadband from about 28,000 rural wire line
exchanges spread across the country. Apart from subsidized broadband connections for
individuals and government institutes and preferential connectivity for womens self
help groups (SHGs), one broadband kiosk for public access shall also be provided from

each eligible rural wire line exchange. Under this Scheme, subsidy support is being
provided for broadband connectivity, CPEs and Computers.
The Rural Public Service Terminal Pilot for Financial Inclusion and VAS: As an adjunct to
the Wire Line Broadband scheme, a pilot scheme for subsidy support towards broadband
enabled Rural Public Service Terminals (RPSTs) is under consideration. It is envisaged
that the subsidized RPSTs shall enable SHGs in selected districts to provide secure
banking services and various Value Added Services (VAS) to the rural public.
Scheme for Augmentation of Optical Fibre Cable (OFC) Network connecting the Block
Headquarters:

To provide adequate back haul for voice and data traffic in rural areas, USOF proposes
to subsidise the augmentation /creation of the required rural OFC network capacity. To
begin with it has been decided to improve the OFC network between the Block HQs and
the District HQs.
Scheme for Intra-District OFC Connectivity in Assam: The Service Area of Assam has
been taken up first and an Agreement has been signed with the selected USP i.e. BSNL
in February 2010. As per this Agreement, BSNL shall share the subsidised intra-district
OFC bandwidth capacity with other service providers at the prescribed discounted rates.
It is expected that the availability of high capacity backhaul at discounted rates would
greatly encourage the growth of voice and data services in the region (Optical Fiber
Cable(OFC) for Assam).
Renewable Energy Initiatives

Provision of Solar Chargers for CDMA FWT VPTs :- All new FWT based VPTs
being supported by USOF are to be provided with solar chargers. Also, under joint
MNRE and USOF support, about 50,000 existing CDMA FWT based VPTs are being
provided with subsidized solar chargers with the aim of ensuring their sustained and
effective functioning.
Pilot Projects to establish the Viability of Powering of Shared Mobile Infrastructure Sites in Rural
Areas through Solar/Solar-Wind Hybrid Installations :- Subsidy support from MNRE and USOF shall
be provided towards solar/solar-wind hybrid power installations in USOFs shared mobile
infrastructure sites (one in each state). The results obtained from these 28 sites will help establish
technical feasibility and financial viability of utilization of renewable energy in shared mobile sites
in rural areas.

Pilot Project for Establishment of Rural Solar Mobile Charging Facilities (SMCFs) :- Support shall
be provided for rural solar mobile charging stations in 5000 villages through TERIs Lighting a
Billion Lives (LaBL) project. The SMCFs shall be run by village entrepreneurs who shall recover
nominal fees from the rural public towards charging of mobile phones ( Solar Mobile Charging
Facility(SMCF)).

Activities under Formulation


Next Phase of Mobile Infrastructure Scheme to cover villages/clusters with more than 500
population
Schemes for wireless broadband connectivity and for broadband connectivity on satellite media for
remote areas where terrestrial connectivity is not possible
Extending OFC scheme to West Bengal, and North Eastern States of Sikkim, Nagaland, Manipur,

Arunachal Pradesh, Mizoram and Meghalaya followed by remaining states in a phased manner.
USOF Administration would be initiating activities to further incentivize the penetration of
public access facilities and mobile and broadband infrastructure into still more remote areas/
smaller villages.
We have Miles to Go.
USOF Administration appreciates that with technological advancements, new developments in
the Indian telecom sector and in keeping with the growing aspirations of the target population and
their need for better ICT connectivity, its focus will also need to undergo changes.
USOF may support various new schemes towards:
Active use of new and renewable energy in rural telecommunications
Fibre to the Village
Upgrading rural telecommunications infrastructure e.g. Next Generation Networks (NGN)
Our future plans will always be guided by lessons learnt from the implementation of USOF Schemes
and the desire to continuously improve upon our performance. In this Endeavour, we will measure
our success against our objective of placing state of art ICT services within the reach and the
means of the inhabitants of rural and remote parts of the country.

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