Telecom network operator BSNL will get Rs 1,250 crore Universal Service Obligation Fund (USOF) support for rural phone connections.
The Rs 1,250 crore funding to BSNL from USOF will be the compensation for deficit incurred by BSNL in operating the rural wireline connections. India Government in statement said it will not approve any fresh financial support to BSNL from USOF.
The Union Cabinet has approved the proposal to extend subsidy support of Rs 1,250 crore to BSNL from USOF, as compensation for deficit incurred by BSNL in operating the rural wireline connections installed prior to 1 April, 2002. The eligible rural wireline connections installed prior to April 2002 is 32.32 lakh across India as on 31st March 2014.
USOF since its inception in 2002 has been providing subsidy for BSNL for rural wireline connections installed prior to April 2002. BSNL received Rs 8,692 crore as USOF subsidy support till date, for the rural wireline connections, installed by BSNL prior to April 2002.
The Cabinet approval follows the recommendation from telecom regulator TRAI, which in its report dated 14th May 2012, had recommended Rs 1,500 crore subsidy for 18th July 2011 to 17th July 2012 and Rs 1,250 crore for 18th July 2012 to 17th July 2013.
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