The GSM Association, the global trade association for the mobile industry, has called on the Indian government to cut in half the 5% levy on telecom operators’ gross adjusted revenues, which is channeled into the Universal Service Obligation Fund (USOF). The levy is increasing operators’ 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 backhaul capacity and electric power, currently slowing down the rollout of mobile networks into rural areas.
"Universal Service Funds are another telecoms-specific tax that increases the cost of access for consumers,” said Gabriel Solomon, Senior Vice President of Public Policy of the GSMA, speaking at the Commonwealth Telecommunications Organisation’s Connecting Rural Communities Asia Forum. “Globally, 75% of the cash in Universal Service Funds is unspent*. We strongly support the call by Nirpendra Misra, the Chairman of the Telecom Regulatory Authority of India, to cut the 5% levy by at least half and remove handset taxes as that would make mobile phones more affordable for rural consumers and spur industry investment in currently un-served areas.”
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