Defending the continuation of Universal Service Obligation support, a fund to subsidise unprofitable operations of otherwise profit making telecom PSUs like Bharat Sanchar Nigam Ltd, the government on Tuesday said USO exists for all players and not for BSNL alone.

"USO is not for BSNL alone...USO is for the whole country ...for any telecom operator who wants to go areas which are not profitable", Maran said while replying to a query if after posting a net profit of over Rs 10,000 crore (Rs 100 billion), it is justifiable for BSNL to get most of USO funds for its unprofitable operations.

BSNL paid a dividend of Rs 975 crore (Rs 9.75 billion) for 2004-05 taking the full year dividend to Rs 1,175 crore (Rs 11.75 billion). It has made a net profit of Rs 10,183 crore (Rs 101.83 billion) and a revenue of over Rs 36,000 crore (Rs 360 billion).

Recently, telecom regulator TRAI directed BSNL and other fixed-line operators to disclose the usage of funds received from the USO Fund.

The telecom operator pays 5 per cent of the adjusted gross revenues towards the USO Fund. So far, BSNL has received maximum USO funds as it is the only operator with widespread rural networks through its fixed line service.

In 2005-06, the USO Fund is pegged at Rs 1,200 crore (Rs 12 billion). The private operators share in offering rural connectivity has been low in the past.

For its unprofitable operations, BSNL gets 'Access Deficit Charge' too which is a fixed charge paid by all mobile service providers to BSNL on STD and international calls. The quantum of ADC is Rs 5,000 crore (Rs 50 billion).

The regulator had recently suggested that ADC and USO should be merged into a single fund since both serve similar objectives.