COAI, AUSPI and GSMA India have called for phased reduction of 5 per cent levy in USO Fund
November 21, 2014
Industry bodies, Cellular Operators Association of India (COAI), Association of Unified Telecom Service Providers of India (AUSPI) and GSM Association India, have stated that the current obligation for telecom operators in the Universal Services Obligation (USO) Fund of 5 per cent of annual revenue needs to be reduced. The collective request for reduction in the USO Fund levy is due to the fact that a large fraction of the current funds with USO Fund remain unutilised. As of September 2014, USO Fund has about Rs 330 billion, majority of which is yet to be utilised for various government projects concerning the rural sector.
COAI is of the view that this obligation be gradually reduced to 1 per cent, stating that most of the telecom operators are in poor financial health and face high-debts owing to large spectrum payments. AUSPI is of the view that the 5 per cent USOF levy be abolished as rural mobile penetration has increased substantially. GSMA India has also supported gradual reduction of the USOF levy as the country's levies on telecom operators are amongst the highest in the world.All the three industry bodies have emphasised that the large accumulation of unspent fund requires to be reviewed by the government as it is serving to be counter-productive and puts financial burden on the industry.
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