Telcos Oppose Use of Digital Bharat Nidhi for R&D, Cite Deviation from Core Objective: Report

Telcos Oppose Use of Digital Bharat Nidhi for R&D, Cite Deviation from Core Objective
Indian telecom operators have strongly opposed the government’s decision to allocate a portion of the Digital Bharat Nidhi (DBN) corpus for research and development (R&D) activities, arguing that it deviates from the fund’s original mandate. In a letter to Telecom Secretary Neeraj Mittal, industry body Cellular Operators Association of India (COAI) said the move undermines the core objective of the DBN, which is to support the expansion of telecom infrastructure in rural and remote areas, according to a report by The Economic Times.

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Digital Bharat Nidhi (DBN) Fund

Formerly known as the Universal Service Obligation Fund (USOF), the DBN is primarily financed through a 5 percent levy on the adjusted gross revenue (AGR) of telecom service providers (TSPs) and internet service providers (ISPs). As of December 2023, the fund had a balance of Rs 86,356 crore. The government has earmarked 5 percent of this fund for R&D initiatives, largely benefiting public sector entities and premier institutions such as the Indian Institutes of Technology (IITs).

However, COAI contends that this allocation offers no direct or tangible benefit to the contributing telecom operators. The association also highlighted that over-the-top (OTT) platforms—some of the biggest beneficiaries of broadband proliferation—are not required to contribute to the DBN, thereby placing an undue financial burden on telecom companies.