The Hindu Business Line : GSM body backs call for cut in universal service fund levy

Kochi, April 16 The GSM Association, the global trade body for the mobile industry, has called upon the Government to cut by half the 5-per cent levy on telecom operators’ gross adjusted revenues channelised into the Universal Service Obligation Fund (USOF).

The levy is increasing operator costs, and ultimately the cost of mobile services for consumers. The GSMA recommends that the unspent $2.5 billion in India’s USOF be used to help tackle the bottlenecks such as a lack of back-haul capacity and electric power, currently slowing down the rollout of mobile networks into rural areas.

USO Fund levy is a telecom-specific tax that increases the cost of access for consumers, Mr Gabriel Solomon, Senior Vice-President of Public Policy of the GSMA, said while speaking at the Commonwealth Telecommunications Organisation’s Connecting Rural Communities Asia Forum here.

“Globally 75 per cent of the amount in Universal Service Funds is unspent. We strongly support the call by Mr Nirpendra Misra, Chairman of the Telecom Regulatory Authority of India, to cut the 5 per cent levy by at least half and remove handset taxes as these would make mobile phones more affordable for rural consumers and spur industry investment in currently unserved areas”, he said.

The extension of mobile coverage into rural areas can also be fuelled by infrastructure sharing agreements between mobile operators, which can make new base stations more cost-effective, according to a new GSMA report entitled “Mobile Infrastructure Sharing”.

Global trend

The report recommends that regulators should encourage the growing global trend among mobile operators to share infrastructure, but should not mandate sharing as doing so may curb competition and distort the market.

In India, the regulator has just increased the scope for infrastructure sharing in response to proposals from mobile operators. Up to 40 per cent of all new cell sites and masts are shared today and this will grow substantially, Mr T.V. Ramachandran, Director General of the Cellular Operators Association of India, said. Indus Towers, Reliances’s RTIL and Bharti Infratel share more than 130,000 sites. The vast majority of the sharing agreements will continue to be driven by market forces, he added.

Infrastructure sharing is a potentially powerful tool mobile operators can use to cost effectively extend mobile services, including broadband connections to many millions of people, Mr Solomon said.

More Stories on : Telecommunications

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Novell engg facility in Bangalore

Infinite close to raising $50 m

GSM body backs call for cut in universal service fund levy

GSM operators opt out of Blackberry talks

Delayed supply by ITI hits BSNL’s mobile expansion

Motorola unveils new phone

Janapriya Engineers plans low-cost office space for IT, ITES firms

Aztecsoft Q4 net profit declines 53%

Bigger volumes push MindTree Q4 net up

Intel details applications for embedded systems

Tech Mahindra’s Chennai centre

MakeMyTrip adds new features on Web site

Motorola plans virtual learning kit for Bangalore

Dhanus Tech acquires Sreeven