USOF amends agreement with BSNL for upgradation of existing 2G sites to 4G

GoI has approved extension of funding of O&M cost of LWE-1 phase existing 2G sites beyond contractual period.

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The Universal Service Obligation Fund (USOF) on 20th July amended its agreement with BSNL for subsidy support to provide mobile services in areas identified by MHA, Government of India.

USOF had on 9th May notified funding of O&M cost of LWE Phase-I existing 2G sites for an extended period, i.e. 12 months from the date of approval of the cabinet or commissioning of 4G sites, whichever is earlier. The Government of India has approved the extension for funding of O&M cost of LWE Phase-I existing 2343 2G sites beyond the contractual period of five years at fund support of Rs 541.8 crore (excluding taxes and levies).

The agreement between USOF and BSNL was amended on 20th July with the approval of the Administrator, USOF, with immediate effect. The agreement earlier valid up to 21st June 2022 will remain valid until 31st July 2023. The funding support, however, shall be limited till 30th April 2023.

The agreement has been amended to include multiple new clauses. These include USOF funding operating expenditure (OPEX) for 2,343 sites till 30th April 2023 or commissioning of 4G sites and funding of operations and maintenance cost of LW Phase-1 existing 2,343 2G sites beyond the contractual period of five years at an estimated cost of Rs 541.8 crore.

The other new clauses include USOF funding approved OPEX as per rate obtained through the BSNL contract or Rs 72,400 per month/site, whichever is lower from the date of expiry of 5 years O&M and till 30th April 2023 or upgradation of these sites to 4G whichever is earlier.

USOF will pay subsidy towards OPEX for the 2,343 towers installed by BSNL as per the OPEX rate obtained through the existing BSNL tendered cost or Rs 72,400 per month/site, whichever is lower from the date of expiry of 5-year O&M and till 30th April 2023 or upgradation of these sites to 4G whichever is earlier.

No centage shall be payable to BSNL for an extended period. The revenue generated shall be retained by BSNL for the said purpose. The OPEX for 356 sites will be effective up to 30th April 2023 or commissioning of 4G sites, whichever is earlier, at the rate of Rs 72,400 per month per site from the date of expiry of 5 years O&M period and till upgradation, whichever is earlier.

Satellite bandwidth and carriage charges for VSAT sites shall be payable to BSNL for the extended period subject to actuals incurred. The other terms and conditions of the agreement remain unchanged. The sites not upgraded by 30th April 2023 will have no fund support from USOF with the funding for 2G O&M beyond 30th April 2023 to be borne by BSNL from its own resources.

No tax shall be payable to BSNL since the funding is in the form of subsidy. The ITC generated shall be retained by BSNL. The claims for the period shall be filed by respective CCAs office based on the PO issued by BSNL for the extended period. The claims of existing quarters shall be considered as condoned if submitted within 90 days of issue of this order.

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Avatar of Basil Kannagi Arasu
Basil Kannagi Arasu

Editor-in-chief

Basil keeps an eye on the latest happenings in the Telecom sector. In his free time, you can find him streaming the Premier League which he started watching in 2013.

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