Connecting BSNL Employees / Subscribers 4 Growth of BSNL: Universal Service Obligation Fund dismisses Trai's subsidy proposal for BSNL

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Universal Service Obligation Fund dismisses Trai's subsidy proposal for BSNL

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The Universal Service Obligation Fund (USOF) has dismissed sector regulator Trai's proposal to provide state-run BSNL Rs 2,750-crore subsidy for its rural landline operation, claiming such a move will result in duplication of subsidy payout.

The USOF, which is an independent body within the telecom department administered by an official at the rank of a secretary, said it already has a running pact to provide Rs 1,500 of subsidy to BSNL to support its rural landline operations.

"The USOF has an existing pact with BSNL since January 2009 to support broadband enablement of 28,672 rural wireline exchanges, which entails Rs 1,500-crore subsidy payout over an eight-year period. Giving more subsidy in line with Trai's recommendation will amount to duplication of subsidy for the same activity," said USOF administrator N Ravi Shankar, in an internal note to the DoT reviewed by ET.

The USOF has communicated its objection to Trai's proposal a day before the Telecom Commission, the highest policy-making body in the communications ministry, meets on Thursday to take a call on the suggestion.

Shankar also claimed that despite receiving Rs 6,000 crore of USOF subsidy from July 2008 to July 2011, the quality of BSNL's rural landline operations had declined over the years as it had failed to grapple with competition from private telcos.

Small wonder, subsidy for BSNL's loss-making rural landline operations was conspicuously missing in a recent telecoms department note on USOF's near Rs 35,000 crore payment commitments over the next three years.

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