* 1837 Concept originated by Rowland Hill in Britain with his postal reforms (uniform rates and prepayment by sender via postage stamps) * 1907 Term originated in Theodore Vail’s slogan of ‘One Policy, One System, Universal Service’ for AT&T, USA * 1934 It became a national policy for making available wire & radio communication service with adequate facilities at reasonable charges across USA * US is a key objective of the UPU. Even Art 1(d) of ITU lays a broad directive for States “to promote extension of the benefits of the new technology to all world’s inhabitants” Affordability: for all users, the price of the service should not be a factor that limits service Availability: access the level of service is the same for all users in their place of work or residence, at all times and without geographical discrimination Accessibility: all subscribers should be treated in a nondiscriminatory manner with respect to the price, service and quality of the service, in all places, without distinction of race, sex, religion, disabilities etc. Essentials * * The underlying concept of Universal Service is to ensure that telecommunication services are accessible to the widest number of people (and communities) at affordable prices Continuing subsidies Limited subsidy support By ideal regulatory and legal environment Source: Navas-Sabater et.al, 2002 . Capacity to avail other Entitlements Build Capabilities ICT as tool (means) ICT as an Entitlement ICT as a goal (ends) Making ICT services Available, Accessible & Affordable enough Individual Development * NTP 2012 has one of its goal as ‘Right to Broadband’ * Universal access (UA) is when everyone can access the service somewhere, at a public place] * Universal service (US) is when every individual or household can have service or adequate proportion of the population can. (i.e., subscriber penetration targets) * With the onset of Broadband revolution & maturation of mobile/wireless communications, UA/US policies & strategies is looking beyond telephony. * In the deregulated competitive sector, the US obligation of the State towards the excluded sections, un-served or the underserved areas remains of paramount focus of the State US: (Stream I) ‘02-’16 Public phones VPT /RCP schemes (‘02-’12) New VPT ‘09-’16 (Feb) UA: (Stream II) ’02-’14 Rural household phones RDEL scheme (‘02-’10) RDEL (Prior to ’02), still being funded UA: (Stream III) ‘07- … Mobile voice coverage Mobile (‘07- Nov. ’13) LWE & Mobile for uncovered villages schemes upcoming UA & US: (Stream IV) ‘09-’18 Wire-line BB Provisioning of BB Kiosk & BB connection ‘09-’18 (Jan) UA: (Stream V) ‘10- … OFC Infrastructure OFC infra Coverage schemes (Assam - ’10 –’17 , NE I/II – ’12-’20 ) BBNL funding for NOFN, Transmission Plan in NER, Submarine OFC & Satellite B/w augmentation in Islands, (Stream VI) ‘10- … Pilots- on new tech. developments SMCF (‘10-’14) & Sanchar Shakti (‘12-…) & Renewable energy support to towers Subsidy disbursed against closed & ongoing schemes in each Stream of USOF Activities signifying the currently prominent Streams 100% 116 cr 1 cr 90% 80% 7,500 cr 70% 597 cr 60% 50% 2,303 cr 2,517 cr Ongoing 410 cr Closed 5 cr 40% 30% 6,183 cr 20% 403 cr 10% 0% Stream I Stream II Stream III 0 cr 0 cr Stream IV Stream V Stream VI ‘94 ’99 ’02 ’03 •One of the objectives of the NTP ‘94 was Universal service : provision of access to all people , covering all villages as early as possible, for certain basic telecom services at affordable and reasonable prices. •New Telecom Policy (NTP) envisaged development of telecom facilities in remote, hilly & tribal areas and provision of universal services to all uncovered villages. Private sector involvement was found to be slow as envisaged in NTP ‘99, all service providers were encouraged to participate in USO via reimbursement from USOF. •TRAI recommendations for est. of USOF & USL @5% of AGR of the TSPs except pure VAS providers •Universal Service Support Policy (USSP) came into effect w.e.f. 1.4.2002. •Administrator, USOF was appointed on 01.06.2002 •The Indian Telegraph (Amendment) Act, 1885 gave statutory status retrospectively to the USOF Milestones of USOF ’99 ’02 •New Telecom Policy (NTP) stated Universal Service as its goal, even in NTP 2012- focus on converged communication service (ICT-data, voice, video) in commercially unviable rural & remote areas •Universal Service Support Policy (USSP) came into effect w.e.f. 1.4.2002. •schemes MARR VPT(A) & RDEL-B & RDEL-P(prior to 1.4.2002) •Statutory status retrospectively to the Fund, by adding Sec 9A- 9D in ITA, 1885 ’03 ’04 •VPT-OPEX & MARR VPT(B) launched •Rules for administration of the Fund was notified as IT (amendment) Rules,1951 •Net Cost definition in Rule 525 & 523 •Two streams (Rule 525) of US obligation funding for the activities •Powers of Administrator defined under Rule 524 •RCP & Uncovered VPT- Phase I launched ’05 •RDEL-A launched Milestones of USOF ’06 •Four more streams (Rule 525) of USO funding added •"obligation to basic telegraph services“ substituted by " obligation to provide access to telegraph services“ vide Indian Telegraph (Amendment) Act ’07 ‘08 ‘09 •RDEL-X(extension of A) & Shared Mobile Infrastructure scheme •Rule 525 amended for support of max Rs. 6000 cr. for RDEL–P for period of 3 years ’10 ‘11 • OFC(Assam) & Solar Mobile Charging Facility pilot schemes launched •All of the USOF activities came under Plan Budget from 2011-12 ’12 ’13 •New VPT Phase II & Rural wire-line BB launched •Creation of NOFN for extending the BB connectivity to GPs via SPV(BBNL) funded by USOF •Eligible operators definition in ITR modified to mean ‘entities having valid license or registration or authorisation from Central Govt. for providing telecom services/infra. or any other entity. •Work towards ‘Right to broadband’ enshrined in NTP 2012 •OFC for NE-I & NE-II and Sanchar Shakti pilot projects launched • BSNL nominated as USP for mobile services provision in LWE areas vide IT(amendment) Rules 1951 -Was an exception to Universal Service Provider selection process of competitive bidding as per Rule 526 • Rule 525 amended for support of max Rs. 1500 cr. for RDEL–P for one year w.e.f 18.7.11 Milestones of USOF ‘14 ‘15 •Mobile provisioning in MHA identified sites in LWE states launched •SS pilot in AP commenced its VAS services •Upcoming tender for 8 USOF schemes for NER for mobile provisioning in uncovered villages & uncovered sections of NHs Green telecom, VAS/content Mobile coverage to uncovered villages , A&N, OFC schemes in NE Lack of business case Market Gap State ‘s obligation LF levy across Rural & urban areas Wealth redistribution Tech & Regulatory lag, Subsidy support to ~32 lakh RDEL (prior to 1/4/02) Connections of BSNL Access Gap R-U divide (50%-150%) LWE, NE telecom plan NOFN, Digital India defined in Act as providing access to telegraph services in rural & remote areas at affordable and reasonable prices »Economic: Network extension & stimulate uptake of the ICT services in rural/remote areas »Social: Mainstreaming the underserved & unserved areas/groups »Political: to enable citizens exercise their political rights in an informed way and »Constitutional: Equitable distribution of the fruits of the telecom/digital revolution and fair allocation of national resource (pooled USO levy) via targeted subsidies Public Access Individual Access •VPT-OPEX, MARR VPTs, VPT-1991, and RCP • On-going VPT-2001 •RDEL-A,RDEL-B,RDEL-X •RDEL–Prior to 1.4.2002 (subsidy support is being extended and under consideration by Telecom Commission) Mobile Connectivity •Shared Mobile Infrastructure scheme -Part A (IP)& B(USP) •Ongoing LWE scheme & Upcoming Comprehensive telecom development plan for North East, uncovered villages of Himalayan & western Border states etc Broadband connectivity • On-going Rural Wire-line broadband scheme (individual connections & kiosks) General infrastructure Pilot Schemes Targeting the needy & extension of new converged services to the excluded •On-going schemes for subsidy support for Optical Fibre Cable in Assam, NE-I & NE-II and National Optical Fibre Network,, A&N connectivity via OFC & satellite •Solar Mobile Charging facility by TERI •On-going Sanchar Shakti scheme for free of cost dissemination of customised information (Mobile-VAS) to rural women •Renewable energy support for mobile towers 100% 2 2 2 3 3 5 4 11 5 90% 24 80% 3 70% 65 66 66 60% 81 81 86 50% 88 100 Stream VI 65 81 90 Stream V 79 100 Stream IV Stream III Stream II 40% Stream I 69 30% 20% 36 34 10% 19 14 10 0% 15 18 29 15 7 11 8 1 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 (Q1) Stream-wise share in the total subsidy disbursed by USOF Stream V ( Total 410 cr.) 2% Stream VI ( Total 6 cr.) 0.03% Stream IV ( Total 2303 cr.) 12% Stream III ( Total 1000 cr.) 5% Stream I ( Total 2633 cr.) 13% Stream II ( Total 13683 cr.) 68% Stream I : Provision of Village Public Telephones & Rural Community Phones Stream II : Provision of rural household wireline telephones Stream III : Provision of Mobile telecom services in rural/remote areas Stream IV : Provision of Broadband Connectivity in rural/remote areas Stream V : Creation of General telecom infrastructure in rural/remote areas Stream VI : USOF pilots for assessing the viability & feasibility of new teelcom technologies for rural/remote areas Administrator, USOF Joint Administrator (T) DDG (PM&C) Joint Administrator (F) DDG (Broadband) DDG (Green Technology) * Administrator (Secretary rank) endowed with the powers of a Head of department & reports to MoC&IT * USO Fund administration * Policy making, define/review the scope * Agreement formulation & signing with Service Provider with subsidy support for carrying out the USO (unviable rural/remote areas) * Subsidy authorizations to CCAs * Directions &clarifications to Service Provider & CCAs * Monitor performance, issue inspection guidelines * Conducting impact assessment & evaluation »Rule 524 of ITR,1951 lays down the power of the Administrator, USOF to- ˃Settle the claim of Universal Service Provider after due verification, and make disbursements accordingly from the Fund; ˃Specify relevant formats, procedures and records to be maintained and furnished by the Universal Service Provider; ˃Monitor the performance of the Universal Service Provider as per the procedure specified by him from time to time. » Finance advice in the implementation of the guidelines laid down by Government for providing Universal Service Support; » Suggesting such changes in policy as may be deemed necessary for implementation of Universal Service Support for efficient & effective utilization of the Fund; » Formulating USOF projects/schemes under the various streams provided in the Indian Telegraph Rules, 1951, in consultation with telecom service providers and various stakeholders; » Designing an intelligent subsidy support model underlying the scheme/project, for reducing/closing the Viability Gap in provisioning of telecommunication service; » Determining desirable subsidy level, structure & disbursement schedule and appropriate pricing of the services after undertaking a suitable costing & modeling/benchmarking exercise and competitive tendering process; » Finance advice in designing the bidding process and in carrying out the tendering; » Aptly drafting Agreement with necessary incentives & disincentives to ensure the achievement of the deliverables by USP for the concerned scheme; » Monitoring the implementation of USOF projects/schemes and to disburse subsidy in accordance with the terms & conditions of the respective USOF Agreement; » Accurate & timely settlement of all claims of subsidy/financial support in respect of USOF schemes via CSM package » Guiding CCAs in the implementation of the USOF scheme(s) and issuing clarifications w.r.t provisions of the governing USOF agreement via CSM; » Content management of the USOF Website » Carrying out post-implementation projects/schemes; review of USOF » Financial management, Accounting, Budgeting and Audit of USOF activities; » Forecasting the requirement of Universal Service Funds for each financial year and obtaining approval of Government through Department of Telecom; » Ensuring that the prescribed Universal Service Levy is credited to the appropriate Universal Service Fund on a regular basis, as the Fund is a non-lapsable; » Designing the format of various records and return to be maintained by the USPs. Cumulative effect of inflows & outflows on USO fund balance Potentially available Fund for USO purpose via Budget appropriation Subsidy Disbursed annually for rural/remote telecom connectivity & services provision Fund (CFI) Accretion annually via Universal Access Levy collections from TSPs Net Balance in non-lapsable USO fund ₹ 45,000 Cr 7,539 ₹ 40,000 Cr 7,896 2,087 ₹ 35,000 Cr 2,163 6,735 ₹ 30,000 Cr 625 6,724 ₹ 25,000 Cr 6,115 5,515 ₹ 20,000 Cr 5,406 1,600 ₹ 15,000 Cr 3,941 1,290 3,215 ₹ 10,000 Cr 3,458 ₹ 5,000 Cr 1,500 1,767 2,143 1,315 1,654 200 ₹ 0 Cr 1,688 5,778 300 3,100 2,400 6,949 crores reimbursed to BSNL for License Fee & Spectrum Fund balance Rs 39134.57 cr 5 100% 90% 43 51 65 92 91 124 87 63 2271 SMCF 514 58 553 410 403 559 Sanchar Shakti 80% NOFN 60 64 70% 129 60% OFC-Assam 6183 405 850 WIRELINEBB 1215 1177 1514 Shared Mobile Infra 1352 50% 2602 0.35 1271 RDEL(sum of A X D B) 1378 40% RDEL-P 750 237 New VPT-2 1500 5 7500 45 30% New VPT-1 71 84 MARR-B 20% 66 10% 42 30 30 52 56 55 43 173 63 19 52 125 83 82 200405 200506 200607 119 200304 53 88 86 200809 200910 0% 200203 116 228 404 31 148 42 65 95 200708 132 25 201011 139 201112 81 40 201213 914 2014- 201515 16 (Q1) Share of Activities/Schemes in Annual & Total Subsidy disbursed Values in INR Cr RCP 111 860 201314 MARR-A VPT OPEX Share of Schemes in Total subsidy disbursed by USOF NOFN 11% RDEL-X 4% New VPT-2 1% RDEL-P 37% Shared Mobile Infra 2% New VPT-1 1% MARR-B 2% LWE 3% Other 25% OFCAssam 0% WIRELIN E-BB 2% MARR-A 5% RDEL-A 10% RDEL-D 6% RDEL-B 10% RCP 1% Sanchar Shakti 0.004% SMCF VPT OPEX 0.03% 4% Stream I : Provision of Village Public Telephones & Rural Community Phones Stream II : Provision of rural household wireline telephones Stream III : Provision of Mobile telecom services in rural/remote areas Stream IV : Provision of Broadband Connectivity in rural/remote areas Stream V : Creation of General telecom infrastructure in rural/remote areas Stream VI : USOF pilots for assessing the viability & feasibility of new teelcom technologies for rural/remote areas Parliament appropriates , & MoF allots Consolidated fund of India MH 3275-103 MH 3275-797 Public account MH 8235-118 MH 1275-OCS MH 3275-902 X Compensation USO levy collections to USP ( Debit by CCAs) X amount minus debit (Contra credit) Transfer to USOF on Hq. Authorisation of Requisition by CCA Debit on Intimation of payment by CCA MH 8670 -Drawings from bank X amount disbursed (Credit) * Resources for the Fund raised via 5% USO component in LF assessed & collected * Fund – non-lapsable & for exclusive use * USOF Policy for US, recent tilt towards community infrastructure ie UA * 6 Streams/categories of USOF agreements * Estimate annually & forecast the utilisation & undertake budgeting * Stakeholder consultation-Desirability * Technical Consultancy(DPR) –Feasibility * Financial Consultancy(subsidy modelling) – Viability & ensure compliance of the roll-out obligations * Tendering or nomination * Tender/Agreement document preparation for extending subsidy, defining roles & obligations, penal clauses * issue of NIT, Agreement/contract signing * Evaluate the extra costs generated by the constraints of the Universal Service Obligations for the Telecom service provider & finance the ‘Gap’ * Rule 525 of the ITR, which makes explicitly clear that the Financial Support from the Fund shall be provided to meet the Net Cost of providing the specified Universal Service Obligation. * Rule 523 also defines the phrases- * "Capital Cost” means the capital expenditure incurred on providing access * "Capital Recovery" means the aggregate of depreciation, interest on debt and return on equity on the capital cost * “Net Cost” means Operating expenses plus Capital Recovery minus Revenue; Where support is extended towards Stream III, IV and V, Net Cost shall mean a percentage of Capital Recovery * "Operating Expenses" means the annual Operating Cost incurred on operation and maintenance of the specified facilities * "Revenue" means the annual charges including usage charge and applicable rental from the specified Service Arms of USOF Hq. * Contributions to USO fund; levy assessment & collections * Accurate & timely subsidy settlement * Finalization of accounts, at the closure of scheme * Issuing show-cause cum demand notice for o/s recoveries Ears & eyes of USOF Hq. * Role in ensuring compliance to ‘deliverables’ of the Agreement * Subsidy claim verification & post-payment inspection * Info. on dues, recoveries, claims/payments * Feedback on Scheme’s performance * General conditions * Date of effect * Validity of agreement * Scope/target eg- VPT with STD, no existing VPT * Commercial conditions * Tariffs, display of information * Technical conditions * BB speed, bandwidth, faults, VPT with solar charging devices * Financial conditions * Subsidy structure & phasing from date of installation- FLS, EAS, procedure of claim processing, deductions for faults, recovery of excess-ascertained based on claim verification, inspections, auditor’s report * Operating conditions * Roll-out schedule, Liquidated damages, Performance Bank Guarantee * Definitions Circle wise share in the total subsidy disbursed by USOF TAMIL NADU, 360.25, 2% PUNJAB, 320.58, 2% ORISSA, 410.29, 2% NE-II, 81.32, 0.41% NE-I, 110.40, 1% UP(E), 596.74, 3% USOF Hq, 10367.37, 52% KERALA, 521.96, 3% Other, 4559.206822, 23% UP(W), 264.92, 1% JHARKHAND, 86.27, 0.43% J&K, 95.20, 0.48% HIMACHAL PRADESH, 267.65, 1% RAJASTHAN, 796.14, 4% MP, 833.37, 4% ANDHRA PRADESH, 800.80, 4% GUJRAT, 663.74, 3% KARNATAKA, 666.40, 3% HARYANA, 185.01, 1% CHATTISGARH, 287.67, 1% UTTARANCHAL, 161.35, 1% WEST BENGAL, BIHAR, 414.84, 2% 179.75, 1% ASSAM, 215.02, 1% MAHARASHTRA, 1348.17, 7% Note: USOF Hq stands for the subsidy payment done centrali the Universal Service Provider for USO activities in all/some c WIRELINE-BB, 410.44, 3% RCP, 72.10, 0.46% OFC-Assam, 32.17, 0.20% Shared Mobile Infra, 260.34, 2% MARR-A, 913.77, 6% LWE, 596.51, 4% MARR-B, 404.07, 3% New VPT-1, 228.31, 1% New VPT-2, 116.35, 1% VPT OPEX, 838.82, 5% RDEL-A, 951.24, 6% Rs 15823 crore out of the total USOF subsidy of Rs 20035 crore disbursed to BSNL (79%) RDEL-X, 294.37, 2% RDEL-P, 7500.00, 47% RDEL-B, 2012.43, 13% Stream I : Provision of Village Public Telephones & Rural Community Phones Stream II : Provision of rural household wireline telephones Stream III : Provision of Mobile telecom services in rural/remote areas Stream IV : Provision of Broadband Connectivity in rural/remote areas Stream V : Creation of General telecom infrastructure in rural/remote areas RDEL-D, 1191.78, 7% Universal Servcie Providers wise share in Total Subsidy disbursed BSNL BBNL RIL TATA TTML KEC GTL RCIL VESL VECL DWL REST(TERI QTIL RTL RML ISPL SHYAM BHARTI RCL HFCL) VECL, 9, 0.04% VESL, 18, 0.09% BBNL, 2271, 11.33% DWL, 9, 0.04% RIL, 751, 3.75% TATA, 723, 3.61% RCIL, 25, 0.12% REST, 13.36, 0.07% TTML, 317, 1.58% Other, 150, 0.75% BSNL, 15823, 78.97% GTL, 37, 0.18% KEC, 39, 0.19% Variation in Total USO Subsidy disbursed over the years 3,500cr 3,100, 11 3,000cr 2,400, 12 2,500cr 2,163, 14 2,087, 10 2,000cr 1,767, 7 1,600, 10 1,688, 12 1,500, 7 1,500cr 1,315, 5 1,290, 7 1,000cr 625, 10 500cr 300, 2 200, 3 0.35, 2 0cr 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 (Q1) Grand Total ( Progressive figure 20035 cr.) No of USOF schemes/activities against which subsidy ○ Number of upcoming schemes – Plan for utilising around 6 thousand crores during the period FY 15-16 to FY 2223 ○ Utilisation plan for USOF including annual accruals entire fund would be put to use for the development of telecom infrastructure & provisioning of ICT services in rural/remote areas of India ○ In two pillars of the Digital India campaign- Broadband Highways & Universal Access, USOF has critical role to play ○ Rest of the 7 pillars such as e-governance, electronic delivery of services, information for all etc are directly & indirectly dependent on the strength of these two pillars Region Upcoming Schemes Uncovered villages & NH- NER except AP & 2 districts of Assam (2800 cr.) NER Transmission Media Plan-NER (296 cr.) Uncovered villages & NH- AP & 2 districts of Assam (1811 cr.) Augmentation of satellite bandwidth systems-A&N Capex alone (82 cr.) Augmentation of Intra-Island OFC network-A&N Capex alone (20 cr.) A&N Providing 2G (voice) coverage in uncovered villages-A&N (182 cr.) Providing seamless 2G (voice) connectivity along NH223-A&N (8 cr.) Submarine OFC connectivity between Mainland India and A&N Chennai (1000) & Kolkata (600) route Capex alone (1600 cr.) Augmentation of satellite bandwidth systems-Lakshdweep Capex alone (18 cr.) Lakshdweep Augmentation/ strengthening of 2G (voice) mobile connectivityLakshdweep (12 cr.) Submarine OFC connectivity between Mainland India and Lakshadweep Capex alone (468 cr.) Himalayan Uncovered villages & NH-Himalayan states (JK,HP,UK) - (1650 cr.) Western Border Uncovered villages & NH- Western Border States - 2138 villages (1604 cr.) Southern States, LWE states, States with lesser number of uncovered villages Uncovered villages & NH- Rest of India ~40000 uncovered villages (~30000 cr.) Projections of the UAL Accrual and Disbursement from USO fund over the period FY 2015-16 to FY 2022-23 S. No. 1 2 3 4 5 6 7 8 Year 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 Year End Year End Cummulative Cummulative Balance Balance (Committed & Total Total Cumulative (Only Committed Estimated) Outflows Cumulative Committed outflows) Out flow/ disbursement Annual UAL accrual Cummulative UAL accrual a 7539 7500 7875 8269 8682 9116 9572 10051 10553 Committed Estimated b c d e=c+d f g h=b-f i =b-g 39135 46635 54510 62779 71461 80577 90149 100200 110753 4916 3567 3838 3707 3707 3234 3234 3234 0 165 223 6601 6601 6601 6601 6461 4916 3732 4061 10309 10309 9836 9836 9695 4916 8648 12709 23017 33326 43161 52997 62692 4916 8483 12321 16028 19735 22969 26204 29438 41719 45862 50070 48444 47251 46988 47203 48061 41719 46027 50458 55433 60842 67180 73996 81315