Universal Service Obligation Fund (USOF)

Universal Service Obligation Fund (USOF)

Universal Service Obligation Fund (USOF)


  • Universal Service Obligation Fund (USOF) ensures that there is universal non-discriminatory access to quality ICT (Information and Communications Technology) services at economically efficient prices to people in rural and remote areas.
  • It was created under the Ministry of Communications in 2002. It is a non-lapsable fund, i.e., the unspent amount under a targeted financial year does not lapse and is accrued for next year’s spending.
  • All credits to this fund require parliamentary approval and it has statutory support under the Indian Telegraph (Amendment) Act, 2003.


  • Economic: Network extension & stimulate uptake of the ICT services
  • Social: Mainstreaming the underserved & un-served areas/groups by bridging the Access Gap.
  • Political: to enable citizens to exercise their political rights in an informed way and
  • Constitutional: Equitable distribution of the fruits of the telecom/digital revolution and fair allocation of national resources (pooled USO levy) via targeted subsidies.

Funding of the USOF

The resources for the implementation of Universal Service Obligation Fund (USOF) are raised by way of collecting a Universal Service Levy (USL), which is 5 percent of the Adjusted Gross Revenue (AGR) of Telecom Service Providers.


  • The rural areas get the Village Public Telephones (VPTs), Rural Community Phones (RCPs), Rural Household Telephones (RDELs), and mobile infrastructure.
  • Access to affordable telecom services in remote and rural areas can help stem urban migration and ensure the generation of employment opportunities in rural areas.
  • The increased awareness of ICT services in rural areas and the growing participation of the rural people will help promote facilities related to health, education, etc.
  • It can ensure the growth of Rural Business Process Outsourcing (BPOs-Rural) and Rural Knowledge Process Outsourcing (KPOs-Rural.)
  • USOF is also perceived as the right tool to extend the benefits of government schemes aimed at the social development of the rural population.

Telecom Technology Development Fund (TTDF) Scheme

  • Telecom Technology Development Fund (TTDF) aims to fund R&D in rural-specific communication technology applications and form synergies among academia, start-ups, research institutes, and the industry to build and develop the telecom ecosystem.
  • Additionally, the Scheme aims to promote technology ownership and indigenous manufacturing, create a culture of technology co-innovation, reduce imports, boost export opportunities and creation of Intellectual Property.
  • Under the scheme, USOF is also targeting to develop standards to meet countrywide requirements and create the ecosystem for research, design, prototyping, use cases, pilots, and proof of concept testing, among others.

Related Links:

National Deep Tech Start-Up PolicyCRISPR Technology
Digital Markets Act (DMA)OneWeb Constellation