Spend universal service funds says GSMA

Governments around the world are holding on to billions of dollars collected for their universal service funds that should be spent to build out telecommunications networks, an industry group said Tuesday, calling for the funds to be eliminated over the long term.

The GSM Association (GSMA), an industry group comprised of mobile operators, estimated that governments in 15 countries have collected US$6 billion for their universal service funds, including $2 billion that came from levies on mobile operators.

Of this amount, governments have spent $1.6 billion, leaving billions untouched. “The unspent $4.4 billion should be put back in the industry as soon as possible,” Tom Phillips, government and regulatory affairs officer at the GSMA, said at the 3GSM World Congress Asia conference in Singapore. Phillips noted that India and Malaysia together hold $2 billion in levies.

Universal service funds are used mostly by governments in developing countries to subsidize the rollout of telecommunications services. But they also exist in developed countries, such as the U.S. and Australia.

The funds have been built up by government levies on operators — usually 1 percent to 2 percent of their gross revenue, according to Phillips.

GSMA wants to see the funds done away with over the long term. “Universal service funds may have a short-term tactical benefit, but there’s often no justification for universal service funds to exist, especially in markets that are relatively developed,” Phillips said.

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