Universal Service Obligation Fund (USOF) under the Communications and Information Technology Authority is a government special fund operating under the Law on Communications, the Law on Government Special Funds, and other relevant laws, rules, and regulations. It has been working to deliver ICT services, build new networks, and introduce, expand, and upgrade modern communication technologies to the citizens in remote areas.
The USOF does not receive any funding from the state budget, but raises funds from legal entities engaged in telecommunications services and implements the above-mentioned projects.
From 2009 to date, the fund has been used to introduce, expand and upgrade mobile communication networks at 339 places, deliver and improve internet services at 321 places, build one-stop communication buildings, communication towers, and fiber optic networks at 62 places, and improve the quality of postal services in 330 soums. Also, the Fund implemented a project to improve accessibility and organized training on basic information and communication technology for 330 soums in 21 aimags, as well as published and distributed more than 100,000 manuals and brochures.
The amendment of the Law on Government Special Fund, which came into force on January 1, 2020, states that “9.2. The Universal service obligation fund shall be the source specified in Articles 6.1.2 and 6.1.3 of this law. 9.3. The funds to be collected from a legal entity engaged in telecommunications services specified in 9.2 of this Law shall be equal to 3 percent of the net profit after tax. ” clearly stated.
In addition, the Government Resolution No. 205 of December 9, 2020 re-approved the “Rule for funding and expending of Universal Service Obligation Fund” and defined a “Legal Entity Providing Telecommunication Services” to the “Law on Business Licensing”, which states License holder specified in Article 15.16 of the Law, “Classification of all types of economic activities” 53 (Post, expenditure, messenger activity), 61 (Telecommunication), 62 (Computer programming, consulting and related activities) ), 63 (Information Service Activities).
Prior to the enactment of the Law on Government Special Funds or before 2020, only companies licensed to provide telecommunications services raised funds, while the new version of the law generally categorizes telecommunications services as legal entities. Existing entities have been added to the scope of the law. This will increase the fund’s resources and helps to finance many programs that were previously unresolved due to lack of funding, such as increase the use of information technology, improve digital literacy among citizens, and expand the ICT market.
Furthermore, by order of the Head of the Cabinet Secretariat, a non-staff Supervisory Board consisting of 9 representatives from governmental and non-governmental organizations has been established to monitor and recommend the activities of the Universal Service Obligation Fund.
Note: The audit report and conclusion of the National Audit Office on the activities of the Universal Service Obligation Fund, as well as the detailed report on-budget funding and expenditure, and related information can be found on the website and transparent account information of the Authority.