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USOF envisioned to catalyze growth in telecom equipment manufacturing

The Universal Service Obligation Fund (USOF) — renamed Digital Bharat Nidhi in the new Telecom Bill — may be used to create a mega money source for research and development (R&D) into networking and telecom equipment manufacturing, department of telecommunications (DoT) officials said.

The DoT is discussing how to ramp up the Telecom Technology Development Fund (TTDF), which is currently pegged at 5 per cent of the annual collections of the USOF or about Rs 500 crore.

“Given how the USOF has an all-time high unused balance of more than Rs 78,000 crore as of October, some proposals have been made for enlarging the scope and size of the TTDF. We are seriously studying those proposals. TTDF can be expanded to have a corpus of more than Rs 3,000 crore to begin with,” officials said.

Live since October 2022, the TTDF aims to fund R&D in rural-specific communications technology applications and develop the telecom ecosystem.

Additionally, the scheme aims to promote technology ownership and indigenous manufacturing. It would also reduce imports, boost export opportunities and create higher volumes of India-held intellectual property rights.

The DoT had invited TTDF applications from industry, academia and government departments involved in technology design, development and commercialisation of telecom products and solutions. The deadline for this ended in October last year.

The latest push to expand TTDF is in line with the recommendations made by the Telecom Regulatory Authority of India (TRAI) in September 2023. It had then said the fund — in its current avatar — may not be sufficient to cater to the diverse requirements of the sector. It had recommended the setting up of specific funds with exclusive focus on domestic manufacturing of networking and telecom equipment.

As early as 2011, TRAI had recommended the setting up of a TTDF with a corpus of Rs 10,000 crore.

Despite opposition by telecom companies, the erstwhile USOF has found its way into the new Telecom Bill, in a new avatar. However, it remains the government’s primary source of capital for constructing telecom infrastructure nationwide.

USOF projects continue
The USOF currently provides mobile services and broadband connectivity in rural and remote areas via information and communications technology.

On Wednesday, Prime Minister Narendra Modi launched the Kochi-Lakshadweep islands submarine optical fibre connection (KLI-SOFC) project, funded by USOF. The project extends submarine cable connectivity to 11 Lakshadweep islands, which were till now only connected by satellite link.

The focus till now had been on extending connection to uncovered villages, especially in Left wing extremism-hit areas.

Currently, there is also a comprehensive telecom development plan in the Northeast and the government’s flagship Bharatnet project, which aims at providing broadband connectivity to 250,000 Gram Panchayats in the country. But that is all set to change.

Bandwidth augmentation in remote areas remains the top priority and projects focused on these would see investments, he added. The government has hired international bandwidth for Internet connectivity in the Northeast.

BSNL has hired bandwidth for Internet connectivity to Agartala from Bangladesh Submarine Cable Company Limited via the country’s port city of Cox Bazar.

Given the pace of the project, which saw the second 10 Gbps link being commissioned last year, officials said similar projects are in the offing.

A project to ensure faster Internet connection for remote areas on and near the international border with China is also being considered, they added. Business Standard

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