The Union Cabinet has cleared subsidy amount of Rs 1,250 crore to state-owned telco BSNL as a form of compensation to fund deficit that it incurred in operating rural wireline connections installed prior to 1st April, 2002. The fund comes from Universal Services Obligation Fund set up by the government in 2002 to be utilized for providing telecommunications services in rural areas at subsided rates. The current amount of Rs 1,250 will compensate those connection provided before April 2002, as per TRAI and Telecom Commission evaluation and assessments. As of March 31, 2014, the total number of eligible rural wire-line connections, under the subsidy scheme stood at 32.32 lakh connections. No more USOF support for BSNL: The Cabinet also added that this would be “the last and final payment and no further request from BSNL for financial/subsidy support from USOF on this count shall be considered.” USOF has already provided a total of Rs 8,629 crore as subsidy to BSNL for providing rural wireline and broadband connection since April 1, 2002. These funds were released over period between April 2002 to July 2012, based on TRAI’s recommendations. What the subsidy connection offers: Under a subsidy scheme (doc), BSNL provides broadband connections to the rural and remote areas of the country through its rural wireline exchanges at rates starting from Rs 99, Rs 150, Rs 350 up till Rs 999. Each connection is provided at a minimum speed of 512 Kbps with zero installation registration and security deposit. BSNL also provides…
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