Universal Service Obligation Fund (USOF) Scheme | UPSC

Universal Service Obligation Fund (USOF) Scheme


Cabinet approves Universal Service Obligation Fund Scheme for providing Mobile Coverage in Arunachal Pradesh and two Districts of Assam .

      WHY IN NEWS:

The scheme is covered under the Comprehensive Telecom Development Plan for North Eastern Region

MINISTRY? :- Ministry of Communications


Universal Service Obligation Fund (USOF) Scheme for providing Mobile Coverage in Arunachal Pradesh and two Districts of Assam,namely KarbiAnglong and Dima Hasao


Universal Service Obligation Fund (USOF) Scheme | UPSC


  • Universal Service refers to having a phone and affordable phone service in every home.

To be more legalistic, universal service means providing telecommunication service with access to a defined minimum service of specified quality to all users everywhere at an affordable price.

  • The project envisages to provide mobile coverage to 2374 uncovered villages (1683 in Arunachal Pradesh and 691 in two districts of Assam).


  • The New Telecom Policy (NTP) 1999 of Department of Telecom, GoI had Universal Service as one of its main objectives.
  • NTP 1999 strives to provide a balance between the provision of Universal Service to all uncovered areas, including the rural areas

The NTP 1999 provided that the resources for meeting the Universal Service Obligation (USO) were to be generated through a Universal Access Levy (UAL).

  • The revenue earned by the telecom licensees would be decided in consultation with the Telecom Regulatory Authority of India (TRAI).
  • 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.
  • As per the Indian Telegraph Act 1885 (as amended in 2003, 2006), the Fund is to be utilized exclusively for meeting the Universal Service Obligation.

Universal Service Obligation Fund (USOF) Scheme


  • Enabling rural Indians to achieve their fullest potential and participate productively in the development of the nation by virtue of being effectively connected through a reliable telecommunications network.
  • This will give access to rural India which is within their reach and within their means.


  • ECONOMIC : Network extension & stimulate uptake of the ICT services
  • SOCIAL : Mainstreaming the underserved & un-served areas/groups by bridging the Access Gap
  • 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


  • 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;
  • Formulating USOF projects/schemes under the various streams provided in the Indian Telegraph Rules, 1951.

Designing an intelligent subsidy support model underlying the scheme/project, for reducing/closing the Viability Gap.

  • Determining desirable subsidy level, structure & disbursement schedule after undertaking a suitable costing & modeling/benchmarking exercise.
  • Designing the bidding process and carry out the tendering.


People in rural and remote areas of the country where ICT services are not available due to commercial non-viability on account of various combinations of reasons such as:

  • Sparse population
  • Remoteness of areas
  • Absence of supporting infrastructure (power, road etc.)
  • Low income of inhabitants
  • Insurgency
  • Difficult terrain


  • The project cost is estimated about Rs.2,029 crore including operational expenses for five years.
  • The project would be funded by Universal Service Obligation Fund.


The project is targeted to be completed by December, 2022.


The provisioning of mobile services in the remote and difficult uncovered areas of Arunachal Pradesh and two districts of Assam will enhance :

  • Digital connectivity useful for self-reliance
  • Facilitate learning
  • Dissemination of information and knowledge
  • Skill upgradation and development
  • Disaster management
  • E-governance initiatives
  • Establishment of enterprises and e-commerce facilities
  • Provision of adequate support to educational institutes for knowledge sharing
  • Availability of job opportunities and fulfilling the vision of Digital India promoting domestic manufacturing
  • Fulfilling the objectives of Atmanirbhar Bharat.

      IASbhai WINDUP: 


  • In 1837, concept originated by Rowland Hill with his postal reforms, which included uniform rates across United Kingdom and prepayment by sender via postage stamps.

The work related to provision of 4G mobile services in identified uncovered villages will be awarded through open competitive bidding process as per extant USOF procedures.

  • The Constitution of the International Telecommunication Union (ITU), Article 1(d), provides that one of the purposes of the Union is to promote the new telecommunication technologies.
     SOURCES:  THE HINDU | Universal Service Obligation Fund (USOF) Scheme | UPSC



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