Universal Service Fund Utilization: Lesson from Pakistan

Abstract:     
Around the world over 64 countries have some form of Universal Service Fund (USF) (both planned and operational) created with the purpose of narrowing down the ‘Digital divide’. Most of those funds are mainly collected by levying operators (mostly telecom/mobile) in those countries. Operators mostly pay a stipulated percentage of their AGR (Annual Gross Revenue) intermittently to regulator/ government agency as part of their license obligation. The levy has resulted to a huge amount of fund in many countries, which is left with the government. But unfortunately, most of these countries have not been able to utilize the collected fund for the purpose they were established.

The biggest of USFs for instance, India (USD 8.5bn), Brazil (USD 5.4bn) and Malaysia (USD 1.5bn) had not been able to utilize their fund satisfactorily to play their role in connecting the under or un-served communities and regions. Utilization scenario of these countries echoes the situation of most USFs elsewhere. There are very few exceptions and Pakistani USF is one of them. Pakistan, with its many barriers have utilized their fund quiet impressively(over 63% in first two years) in connecting underserved areas with fiber, broadband, tele-centre and voice at a short span of time. Their USF program received great appreciation as 'one of the world’s most successful USF program' in different global platforms with high utilization and rapid progress in bringing basic telephony to the far off un-served rural areas. Intelecon and the World Bank has identified them for professionalism and success with the USF.

Number of Pages in PDF File: 18

working papers series