UNIVERSAL SERVICE OBLIGATION

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UNIVERSAL SERVICE OBLIGATION
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About USO Presentation

• USO AN OVERVIEW
• 1- What is USO?
• 2- Why USO?
• 3-Constitution Administration of USO Fund.
• 4-USO FUND
• 5-USO Activities-
• (A) Ongoing USO Activities-
• Various Agreements-
• VPT(OPEX) (v) RDEL- (Three Agreements)
• MARR ( 2 agreements) (VI) New Agreements
• RCP
• BNY (uncovered village)
• (B) Mobile Infrastructure Project
• Phase-I (MOBILE)
• Phase-II (MOBILE BROADBAND)

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Universal Service Obligation FundChanging the
face of Rural India
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What is USO ?

• An obligation of the Govt. to provide access to
  basic Telecommunication services to people in the
  rural and remote areas at affordable and
  reasonable price.
• It was felt that subsidizing only fixed services
  is not sufficient to increase the teledensity in
  rural areas. Hence it was decided to provide
  subsidy for Mobile Services also.

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What is USO contd

• To enable this, ITA and ITR were amended on
  17th Nov 2006 and creation of infrastructure for
  provision of mobile services in rural and remote
  areas was added in rule 525 to provide ?
• Infrastructure for provision of Mobile Services.
• Broadband connectivity.
• General Infrastructure.
• Emerging Technologies.

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WHY USO
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Why USO ?

• To bridge the gap of DIGITAL DEVIDE.
• To increase TELEDENCITY(50 Mill. by 2010).
  Providing Telecom Services by only Govt.
  Deptt./Corporation could not have achieved the
  target of Teledencity.
• Even after opening up of Telecom sector
• Telecom operators were not willing to go
  into rural and remote area due to non-profitable
  business.
• USO thus arises for providing telecom services to
  certain High cost Geographical area, locations or
  to certain low income customers.

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Constitution Administration of USO Fund

• USO Policy came into effect from 1-4-2002.
• In Dec.2003, The Indian Telegraph(Amendment) Act
  2003 was passed by both Houses of Parliament
  which has given an statutory status to the USO
  Fund.
• To enable USO Support for mobile service and
  B/Band connectivity also in rural and remote
  areas of the country Indian telegraph(Amendment)
  Act 2006 was passed.
• The Rules for Administration of fund-Indian
  Telegraph (Amendment) Rule 2006.
• Administrator, USF is the Head of USO Fund in
  India. He is empowered to formulate procedures
  for implementation of USO and disbursement of
  funds from USOF. His office is an attached office
  of the DOT.

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Field Office - Controller of Communication
Accounts office is performing field function on
behalf of the Administrator (USF). There are 26
CCA offices across the country.
ADMINISTRATOR (USF)
JT. ADMINISTRATOR (F)
Jt. Administrator (T)
DDG (BB)
Dy Administrator I
Dy Administrator II
Dy Administrator III
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USO Fund

• Non-lapsable fund. Transfers to the Fund through
  Parliamentary approvals.
• Under the provision of NTP 99 and as per USSP
  (Universal Service Support Policy) resources for
  meeting the USO would be raised through Universal
  Service Levy (USL), which would be a of the
  AGR of the Telecom Operators.
• USL is presently 5 of the AGR of all the Telecom
  Service Providers except pure VAS providers like
  Internet, Voice Mail, E-mail Service providers
  etc.

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Contd.

• Credits to the fund would include
• a) contribution towards USO by Telecom Service
  Providers and,
• b) any Grants and Loans by the Central Govt.
• Rules governing the scope and implementation
  notified in March, 2004.

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UNIVERSAL SERVICE OBLIGATION FUND POSITION as
on 31.12.2008
Balance 14033 6948 7085 on 1-4-2008 due to
compensation to BSNL as per Min.of Fin. direction
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Various Ongoing USO Activities in Orissa
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USO Scope of work

• USO Subsidy is being given for Public Access as
  well as Individual household lines in identified
  Net high cost rural/remote areas.
• Ongoing Activities -
• Village Public Telephone (VPT)
• Replacement of MARR VPT with workable Media like
  Land line / WLL. (Two Agreements)
• RCP
• VPT in uncovered village (BNY)
• RDEL- Rural Household Direct Exchange line in
• net high cost rural / remote areas.

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Contd.

• New Activities -
• Setting up and managing MOBILE INFRASTRUCTURE
  PROJECT in Rural and Remote area.
• BROADBAND connectivity to villages
• Creationof GENERAL INFRASTRUCTURE in rural and
  remote areas for development of telecom
  facilities
• Induction of NEW TECHNOLOGICAL DEVELOPMENTS in
  the telecom sector.

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(1) VPT OPEX

• For existing VPTs as per 1991 census village and
  for VPTs provided in additional Revenue village
  as per 2001 census.
• At present about 5,30,000 VPTs are getting OPEX
  support from USO Fund. For OM of VPTs Agreement
  valid for 7 years (upto 27/03/2010)
• Following should be displayed / available at VPTs
• a) Name No.of the person for
  Grievance Redrasel.
• b) Toll free utility Telephone No -
  Fire, Police etc.
• c) Tariff as per TRAIs direction
• d) Complaint Book at each VPT
• e) Hours of operation
• Fault record, Daily line testing should be done
  by USP.
• SSA wise representative rate varies.

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2. Replacement of MARR VPTs.

• Two Agreements
• a) Agreement dtd. 19.3.2004 For replacement
  between1.4.2002 to 30.6.2003
• For replacement of 140210 MARR VPTs
• b) Agreement dtd. 25.9.2003 For replacement
  after 1.7.2003
• For replacement of remaining MARR VPTs
  by 30.6.05 extended upto 30.11.07
• Subsidy for a VPT shall be for 7 years from the
  date of replacement or upto the date of
  termination of Agreement whichever is earlier.
• There is a provision of L.D in case of
  non-fulfillment of the roll-out obligation.
• The L.D. shall be 10 of the annual subsidy
  payable for those VPTs for each calendar month
  of delay or part thereof. Subject to a maximum of
  20 of the annual subsidy payable.
• SSA wise Technology Neutral Representative rates.
• Other Terms and condition like proportionate
  subsidy for faulty period, No subsidy for faulty
  VPT gt 45 days in a QTR, Payment of subsidy
  quarterly in arrears, proper Mtce. Of VPTs etc.
  are same as VPT.

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(3) Rural Community Phone

• Agreement dt. 30/ 9/2004)
• RCP Public Phone in a Village
• with Population gt2000 (91 Census)
• No PCO exists.
• Agreement valid for 8 years.
• Subsidy for Five Years from the date the RCP is
  installed and made functional.
• Both front loaded Subsidy (CAPEX) as well as
  equated annual subsidy is payable.
• Deduction of pro-rata subsidy for fault for gt 7
  days.
• No subsidy if RCP remains faulty for 45 days or
  more in a quarter.
• NIMR/DNP for entire quarter shall not qualify for
  subsidy support for that quarter.
• Roll out obligation and -
• First year - 20 VPT/RCPs
• Second year - 60 (Minimum)
• Third year - Balance.
• Liquidated damage- For the shortfall in providing
  the required number of VPTs/RCPs by the end of
  second and third year respectively, liquidated
  Damages at the rate of 5 of front loaded subsidy
  payable for those VPTs/RCPs for each calendar
  month of delay or part therof, subject to a
  maximum of 10 of the front loaded subsidy thus
  payable for those VPTs/RCPs shall be recovered,
  unless the delay has been condoned by the
  Administrator.

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BHARAT NIRMAN YOJANA

• Bharat Nirman will be a time-bound business plan
  for action in rural infrastructure for the next
  four years. Under Bharat Nirman, action is
  proposed in the areas of irrigation, road, rural
  housing, rural water supply, rural
  electrification and rural telecommunication
  connectivity. We have set specific targets to be
  achieved under each of these goals so that there
  is accountability in the progress of this
  initiative.
• Prime Minister

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BNY
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(4)VPT IN UNCOVERED VILLAGE(PART OF Bharat
Nirman Yojana)

• VPT for Uncovered Village as per 1991 census
  (66822 Villages)
• This excludes Village with lt100 Population
• 14183 VPTs Digital Satellite Phone Terminal
• Some of them are covered on WLL
• As on 31/1/2009 BNY Achievement is 56417
• Remaining 10405 is to be covered by Nov,09

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(5) RDEL

• RDEL- B
• Agreement dated 03-05-2005
• Both for CAPEX and OPEX
• For the period 01-04-2002 to 31-03-2005
• Agreement is valid for 8 years w.e.f 01-04-2002
• SDCA wise rate are different for FLS EQS
• Equated and Annual Subsidy- maximum 5 yrs
• FLS for net addition of RDEL in local Xge area
• Note- Net additions shall mean the number of
  RDEls added after making adjustment for RDELS
  closed permanently on account of surrenders,
  non-payments, or shifts out of the Local Exchange
  Area.

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(b) RDEL- A

• Agreement dated 15-03-2005
• Both for CAPEX and OPEX
• For the period 01-04-2005 to 31-03-2007
• SDCA wise rates are different for FLS EQS
• Equated and Annual Subsidy- maximum 5 yrs
• FLS for net addition of RDEL in local Xge area
• Note- Net additions shall mean the number of
  RDEls added after making adjustment for RDELS
  closed permanently on account of surrenders,
  non-payments, or shifts out of the Local Exchange
  Area.

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(c) RDEL- X

• It is extension of the RDEL- A
• Both for CAPEX and OPEX
• For the period 01-04-2007 to 31-03-2010
• Rates are lower than the RDEL-A
• FLS for net addition of RDEL in local Xge area
• Note- Net additions shall mean the number of
  RDEls added after making adjustment for RDELS
  closed permanently on account of surrenders,
  non-payments, or shifts out of the Local Exchange
  Area.

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New Agreement in the Pipeline

• The agreement for subsidy support to BSNL for
  wireline DELs installed prior to 01.04.02 is in
  the process.
• Under this scheme subsidy support is to be
  extended from USOF for a period of three years
  starting from 18th July 2008 at the rate of Rs.
  214/- per month per rural functional wire line
  connection installed before 01/04/2002.
• The proposed financial conditions and the formats
  are broadly the same as applicable in the
  earlier RDEL Agreement(s).
• The claim for the first quarter will be submitted
  in Attachment 1/3 and 3/3 of Annexure-I. For
  subsequent quarters the claims will be submitted
  in Attachment 2/3 and 3/3 of Annexure-I.
  Annexures have been mailed to CCAs.
• Detailed instructions will follow.

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MOBILE INFRASTRUCTURE PROJECT
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USOF New Plan
Setting up Infrastructure and Provision of Mobile
Services Broadband Connectivity
Phase - I
Phase - II

• Infrastructure Mobile Services with 7871
  Towers now revised to 7505 Towers
• 81 clusters (group of Rev. Distt.) 4 in Orissa.
• Scheme is in Two Parts
• Part(A) Passive Infrastructure (shareable)
  Land,Tower, E/E, Power etc
• Part(B) Active Infrastructure
  (Non-shareable) BTS, Antenna, Battery, P/P,
  Backhaul etc.
• CCA is the monitoring Authority of the Project
  on behalf of Administrator, USOF, Govt.
  of India.
• Roll out by Dec.2008.

• For Mobile Broad Band in Rural Area.
• General Infrastructure.
• Experimental Technologies.
• Appx. 11,000 Towers.
• Subsidy for IP only.
• Broad Band in 5000 Blocks.
• 2 lakhs villages to be covered.
• Health Centre, Schools etc. will get Broad Band
  and monthly charges will be reimbursed by USOF.

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Mobile Infra Project Phase - I

• 7505 Towers in 500 Distt. Where there was no
  Fixed wireless or Mob. Coverege
• Agreement w.e.f. 1.6.2007
• Project was to be completed within 12 months now
  extended upto 19 months
• As on 31/01/2009 3316 Towers are commissioned
  in India out of which 76 are commissioned in
  Orissa.

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WHAT CCAs ARE TO DO IN THE PROJECT?

• The exact location of towers/sites has been
  finalized in most of the cases. Details are
  available at
• CCAs e-mail and DoT websit.
• The IPs have to submitted a list of sites to be
  completed as per roll out obligation.
• As per dot letter No.30-148/2007-USF(vol-XIII)
  Dated.26.03.2008 two phase has been merged
  into one
• On the basis of the lists submitted, the CCAs
  have started monitoring the progress of the
  Project through MIS-A which is being submitted by
  the IPs on Monthly basis.

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Monitoring by CCA- through Monthly MIS Reports
Admin. USOF, DoT Hq.
Monthly MIS-A
CCA
Qtrly MIS-C
IP
Admin. USOF, DoT Hq.
Monthly MIS- B
CCA
Qtrly MIS-D
USP
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State Government
Co-ordiantion by CCA with State Govt.,IPs USPs
Discussion Proposed remedy
Solution
Solution
CCA
Problem
Problem
USP
IP
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CCAs as FACILITATORS

• CCAs to interact closely with Liaison Officers of
  the respective State Govts and other local Govt.
  Authorities.
• Letters written to all such Liaison Officers to
  involve the CCAs in meetings and discussions. Lr.
  No. 30-39/2006 USF(Pt) Dtd. 21.08.2007
• The IPs/USPs have also been asked to approach the
  O/o CCAs for sorting out the service area level
  problems.
• CCAs to organise MONTHLY REVIEW MEETING with
  IPs/USPs to sort out the ground level problem.
  Monthly meeting report should be sent to the
  Directorate by the 5th of the following month.

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PHYSICAL INSPECTION

• FIRST PHYSICAL INSPECTION
• 100 over 1-2 yrs
• Preferably By JAG/STS level officer
• Annexure-9 to form the base for Inspection.
• Location and coverage are the essence of the
  Agreement.
• However, need not split our hairs over Long-Lat
  as long as the village is same and the coverage
  is met.
• Any variation/violation to be brought to the
  notice of the USOF Administration.

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PHYSICAL INSPECTION-Contd

• SUBSEQUENT PHYSICAL INSPECTION
• 20-50 over the year preferably not less than STS
  rank officer.
• Less rigorous compared to 1st phase.
• Additional checks
• - tower is not being misused
• - availability of facility for mobile set
  charging at site
• -display of sign board
• -no. of USPs utilizing the tower
• -no. of rural connections to be cross checked
  with Annexure 5A to be submitted by the USPs.

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OTHER PROJECTS

• Phase-II of scheme for subsidy support for
  provision of mobile services in rural and remote
  areas
• Rural Broadband
• Supporting experimental technologies
• Supporting creation of General Infrastructure

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MOBILE INFRASTRUCTURE SCHEME-PHASE-II

• EOI has been called for by Administrator
• Approx. 11,000 towers for areas still uncovered.
  1175 Towers are planned for Orissa.
• IPs to enter into Agreements with USPs as a
  precondition to be eligible
• More than one IP eligible for the same location
• Subsidy payment period for shorter period

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Rural Broad Band

• Wireless Broadband service at 5000 block head
  quarters villages within 10km radius.
• 2 lakh villages to be covered.
• Technology neutral.
• No new tower to be set up.
• The service provider to be compensated for the
  cost of BTS, backhaul etc.
• Wireline Broadband will also be supported from
  USO Fund. Agreement with BSNL signed on
  20.01.2009 for providing 8,61,459 wireline
  connection by 2014.

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ROLE OF CCA OFFICE
PUBLIC AIM
Subsidy Claimed
Subsidy Permissible
PRIVTATE AIM
Win- Win! MISSION ACCOMPLISHED
THE USOF AGREEMENT IS ESSENTIALY ONE OF PUBLIC
PRIVATE PARTNERSHIP (PPP) FOR SPREAD OF
COMMUNICATION INFRASTRUCTURE TO RURAL INDIA
PRIVATE AIM NETWORK EXPANSION, PROFIT PUBLIC
AIM SPREAD OF RURAL TELEPHONY IT
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• THANK YOU
• Kashi Nath Jha
• Jt.CCA(USO)
• Orissa Telecom Circle
• ccaorissa_at_gmail.com

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