Pakistan’s Universal Service Fund

UA funding and financing policies: tackling accessibility challenges

Pakistan established an autonomous Universal Service Fund (USF) by the end of 2006, in accordance with rules and guidelines from the Telecommunications Law enacted in July 2003, the 2004 Mobile Cellular Policy, and the 2004 Broadband Policy. It was created by the Ministry of Information Technology and Telecommunication (MoITT) with the goal of promoting the development of telecommunication services in unserved and underserved areas throughout the country. The USF follows a Corporate Model under Section 42 of the Pakistani Companies Ordinance. The main objectives of the USF are:

• to make telecommunication operators focus on the rural population and increase the level of telecommunication penetration significantly in rural areas through effective and fair utilization of the USF;
• to improve broadband penetration in the country; and,
• to improve e-services, both in rural and urban areas of the country.

Universal Service Contracts are awarded using a “negative auction.” This method implies that the bidder requesting the lowest amount of subsidy to perform each predefined contract wins said contract.

Structure

The USF structure is the first of its kind in Pakistan. The USF has an independent and diversified Board of Directors, which is balanced with four members from the government and four from the private sector. The composition of the board is as follows: