USO Fund may withdraw BSNL’s Rs 20 billion annual subsidy payment

It is believed that the Universal Services Obligation (USO) Fund may withdraw the Rs 20 billion annual subsidy payment it makes to Bharat Sanchar Nigam Limited (BSNL) to support its landline services in rural areas.

This is because the Department of Telecommunications (DoT) has not given it any instruction pertaining to renewal.

In July 2008, the Telecom Commission had provisioned a payment of Rs 20 billion as annual subsidy to BSNL for three years out of the USO Fund.

Under the terms of a memorandum of understanding (MoU) between BSNL and the USO Fund, such subsidy payout was to stop from July 2011, unless DoT decided to renew the agreement.

It is believed that the subsidy payout for BSNL’s loss-making rural landline operations is absent in an internal DoT note that contains details of the USO Fund’s near Rs 350 billion payment commitments over the next three years.