Govt eyes Rs50bn telecom fund for BISP

ISLAMABAD: The government is eyeing nearly Rs50 billion collected under the Universal Service Fund (USF) to use it for the Benazir Income Support Programme (BISP), apparently to achieve maximum political mileage before the next elections.

Maintained by a conglomerate of telecom companies, the USF provides basic telecom services in the un-served and under-served remote villages and small towns of the country.

Informed sources told Dawn the government had initiated an amendment to the Pakistan Telecommunications (Re-organisation) Act of 1996 in order to move the USF amounts to the federal consolidated fund so that it could use the money for the BISP.The government wants to change Clause 33E (I) (a) of the Act as follows: “The accounts of the USF and Research and Development Funds shall be kept in public accounts of the federation and shall be operated in accordance with manner prescribed by the federal government.”

The government apparently thinks that in pursuant to Article 78 (2) of the Constitution, the amounts collected under the USF must be deposited in the public accounts.

At present, the USF and funds for Research and Development are lying as independent accounts in banks.

“The USF shall be utilised exclusively for providing access to telecom services to people in the un-served, under-served, rural and remote areas and other expenditure to be made as incurred by the federal government in managing USF,” says the existing law.

Under the telecom policy, companies contribute 1.5 per cent and 0.5 per cent of their gross revenue minus interconnect payments to the USF and Research and Development Funds, respectively.

The USF gets handsome amount in the form of mobile access promotion charges, leading to accumulation of some Rs50 billion at the moment.

If the control of these funds is transferred to the public sector it will depend on the government of the day where and when it wants to spend the money.

A member on the USF’s board of directors told Dawn that the government was making concerted efforts to get hold of the fund and “we have come to know through certain reliable sources that the money will be put at the disposal of the BISP”.

He said the USF was set up as a company under Section 42 of the Companies Ordinance 1984, which clearly mapped out its rules and regulations.

According to rules, the fund can not be handed over to the government or spent on other than its stated objectives which were promotion of telecom sector in the country.

It may be mentioned that a significant portion of the population still remains uncovered in terms of internet connectively and other services in comparison to other developing countries in the region.

The government, however, wants to divert the fund’s money for its own schemes instead of allowing it to be spent for promotion of the telecom sector.

The official said that fund could be used to provide cheap laptops to students.In a recent letter to the ministry of information technology, USF Chief Executive Officer Parvez Iftikhar said that the fund could face severe repercussions in case the
government went ahead with its plan of taking over it.

“Consequently, moving the available funds from USF account to the federal consolidated accounts shall send a very negative signal to the potential global investors who are already hesitant in investing in Pakistan due to other reasons,” says the
letter.Mr Iftikhar said that any diversion of fund would impact negatively on the upcoming 3G auctions where the government was expecting huge foreign investments.

“Such a move will be seen by the global telecom investors as the government going back on its earlier declared policies and commitments,” the letter said.

More than 500 small schemes designed for providing basic telecom services in more than 12,000 un-served and under-served remote villages and small towns in over 85 tehsils have been stalled and almost an equal number of schemes could not
take off because of the government’s lack of interest in using this fund.

The government’s failure to utilise the USF’s money for extending optic fibre and internet connectivity to remote areas has led the telecom operators to demand an end to mandatory contributions to the fund required under an agreement with the
International Telecommunications Union.

Some major contributors to the USF are considering challenging in the Supreme Court the government’s intentions to take over the USF’s money.

Courtsy. Dawn