The Government of India (DoT) has issued an amendment to the license terms with access (wireless and/or wireline) service providers wherein an operator’s annual contribution to the Universal Service Obligation Fund (USOF), currently pegged at 5% of adjusted gross revenues (AGR), will be lowered by 200 bps in each non-metro service area if the operator covers >95% of the “development blocks” in that service area.

Besides BSNL, which is likely to meet the rollout norm in majority of its service areas, private operators would accelerate network rollout to meet the coverage threshold in their respective service areas by Apr-09. If Bharti Airtel / Rcom achieve the threshold rollout requirement in their non-metro service areas under coverage by Apr-09, their wireless EBITDA margin would rise by 150 bps / 140 bps, respectively.