GSMA calls for Reduction in Universal Service Funds

GSMA has called for re-evaluating the Universal Service Fund (USF) Levy to the governments and regulators. As per the report , GSMA concludes that most funds are not succeeding in delivering their stated goal of widening access to telecommunication services and that alternative market-based solutions are more effective.
 
The report estimates that out of the 64 funds surveyed, less than an eighth have achieved their targets. In India, the Universal Service Obligation Fund (USOF) continues to impose approximately a five per cent levy on operator’s revenues, despite the fact that it contains over US$4 billion of accumulated funds.
 
Tom Phillips, Chief Regulatory and Government Affairs Officer, GSMA, said, "Our research shows that, despite the fact that there is an ever-increasing amount of money sitting unused in these funds, governments continue to collect still more from the mobile operators. The situation needs urgent government review and attention, as the money collected to date far exceeds the amount that is needed to ensure universal access. The reality is that these funds have become a convenient form of taxation on the telecommunications industry and in the majority of cases, they should be closed down and the balance of monies held used to extend access to mobile services to those unable to afford them, or those groups that live in particularly remote areas."
 
He further said, "The GSMA calls on individual governments to implement an immediate moratorium on the collection of more money for universal service funds and to launch a re-think of their future role."
 
The research reinforces the fact that market-based solutions have shown themselves to be the most effective way in bridging the "digital divide".