Technical panel to propose modalities for R&D support channeled from USO funds: Secretary of Telecommunications

A committee is being set up to suggest guidelines for the sanctioning of R&D funds, up to Rs 450-500 crore, which will be allocated from the portion of USOF annual collections following the recent announcement of the budget, according to DoT Secretary K Rajaraman.

The committee, which is in the process of being set up, is expected to deliver its opinion within the next 30 to 35 days, Rajaraman told PTI.

Nearly Rs 450-500 crore will be spent on R&D efforts, as the budget proposed to allocate 5% of annual collections under the Universal Service Obligation Fund (USOF), to enable affordable proliferation of high-end services. broadband and mobile in rural and remote areas. .

Rajaraman further said that the next round of reforms, which are expected to be announced in 3-4 months, will aim to improve the ease of doing business, reduce the burden of compliance and lower the cost of doing business for a whole host of of actors operating in the sector.

Elaborating on the budget announcement related to R&D activities, Rajaraman said, “A technical committee, with experts, is being formed that will recommend appropriate standards for the USOF R&D program…to fund the R&D efforts, the type of products that will be supported.”

While annual collections under the USOF amount to over Rs 9,000 crore every year; at five percent, the R&D component will amount to around Rs 450-500 crore.

Simply put, the USOF aims to provide financial support for the provision of telecommunications services to commercially unviable rural and remote areas of the country. The resources necessary for the implementation of the universal service obligation are collected by means of a universal service charge which corresponds to a percentage of the adjusted gross income (AGR) of the telecommunications companies.

Rajaraman said the development of intellectual property at the local level is crucial for a strategic sector like telecommunications where security, job creation and exports are a priority, and the Department of Telecommunications (DoT) wants to ensure the induction of indigenous technology in the medium and long term.

Therefore, the R&D initiative aims to help local businesses develop products that will enable the proliferation of broadband, better speeds, improved quality of service in rural areas and reduced cost of service through to proper technology development, the senior DoT official said. .

“That will be a general objective of the research that we will support. We will have products that can be produced in India at a much lower cost and in a way that is suitable for the rural and remote terrain of India,” he said. note.

This, along with the budget announcement on the launch of a design-driven manufacturing program to build a robust 5G ecosystem under the Production Linked Incentive (PLI), should bolster the company’s technology proposition. ‘India.

The Rs 12,000 crore telecommunications PLI scheme will be “modified” to accommodate the design-focused component in addition to the existing manufacturing support offered.

“Over Rs 7,000 crore has been sanctioned for 31 companies under the first phase of the PLI, so the balance of Rs 4,000 crore more will be available…for this, the guidelines will be amended to support in-country design as well as manufacturing,” Rajaraman said.

Drafting the revised guidelines will take 40 to 45 days, he said.

On industry expressing disappointment with the Union budget which has failed to meet some longstanding demands, such as a reduction in levies, Rajaraman said the September 2021 reforms were a “big step in before” and that other measurements are on the anvil.

“Basically, we will be looking at a variety of reforms, reforms that improve the ease of doing business, reduce the burden of compliance…reduce the cost of doing business in the sector for various players,” he said. said, pointing out that the industry has different types of licensees, from pure ISPs to mobile operators and from virtual network operators to satellite service providers.

“The idea is to make life easier for these companies so that they are able to offer a wide range of affordable products,” he explained.

The “2.0 reforms” could be announced within 3-4 months, he said.

The telecommunications sector was shot in the arm by the government last year when it approved a successful relief package that included a four-year ban on companies paying statutory dues, permission to share airwaves rare airwaves, a change in the definition of income from which levies are paid and 100 percent of foreign investment through the automatic route. Telecommunications operators also have the option of converting the amount of interest relating to the moratorium period on contributions into equity.

The outlook for the telecom sector is improving, Rajaraman said citing the FY22 third quarter performance of various telecom companies. He said global investors also see the value of investing in India, which is a big market.

Google will invest up to $1 billion in Bharti Airtel to acquire a 1.28% stake and expand the offerings of India’s second-largest mobile operator.

On whether Google’s latest move is an endorsement of the way global players are currently looking at the Indian market, Rajaraman said, “Very true, if you look at the September reforms, we made FDI 100% automatic. , and a lot of the compliance burden has been knocked down as well.”

He added that investors see a lot of value in investing in India and even otherwise it is a very big market. “Now with all of these possibilities, they see additional growth and opportunity here, so obviously they would invest.”

On Vodafone Idea’s decision to opt for the conversion of around Rs 16,000 crore of interest payable to the government into shares instead of around 36% of the stake, and whether the figures have been validated by the DoT, Rajaraman said the finance ministry will review the whole calculation and come to a conclusion.

The DoT will support the Ministry of Finance in decision-making, he added.


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