PAC slams DoT's silence over errant telecos

Zero tolerance advised for violation of licence norms

The Public Accounts Committee (PAC) has pulled up the Department of Telecom (DoT) over its silence on the action taken against the guilty telecom service providers for violating licence condition relating to Universal Service Obligation (USO).

Taking strong exception to the method adopted by the DoT, the PAC said violation of the licence agreement in any form, whether by the licensor or by the licensees, which ultimately leads to financial irregularities and underperformance in meeting the avowed objectives of the government, is too serious an issue.

“The committee therefore, exhort the Department to spell out in no uncertain terms that there would be zero tolerance for any violation of or deviation from the licence agreements,” said the panel headed by Murli Manohar Joshi in its report. The report was tabled during the just concluded winter session of Parliament.

Aiming to increase the rural tele density, the DoT in 2002 had announced the USO  scheme. To implement the programmes under the USO, it had set up the USO Fund. The money for the fund was proposed to be raised by levying five per cent of the adjusted gross revenue earned by all telecom operators under the various licences.

The fund was administered by the DoT to be given to any company as subsidy for providing telephone services in rural areas. As most of the telecom companies were concentrating on the urban areas as it was lucrative, the USO fund was aimed at encouraging these  companies to increase the penetration in rural areas also.
The PAC observed that despite some of the companies claiming the subsidy they failed to fulfil the rollout conditions in rural areas.

The committee also said that DoT should tighten up measures for proper and timely  verification of the claims submitted by the telecom companies so that the subsidy support from the USO Fund was released only for the services actually commissioned by the service providers.


The PAC in its earlier report had expressed concern over slow rural tele-density in Bihar, Chhattisgarh, Madhya Pradesh, Assam, Jammu and Kashmir, Uttar Pradesh and West Bengal. It had asked the DoT to set up effective mechanism to implement the activities under the USO Fund.

The committee also criticised the Ministry of Finance for diverting funds meant exclusively for USO to other programmes and urged the DoT to once again “take up the matter with the Ministry of Finance so that proceeds from the USO Fund are not diverted.”


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