The government has approved Rs 26,000 crore for the installation of 25,000 mobile towers in 500 days, telecom minister Ashwini Vaishnaw has said.

“Vaishnaw stated that connectivity is vital for Digital India and its reach to every corner of the country and announced Rs 26,000 crore has been approved to install 25,000 new towers in next 500 days,” an official release on Tuesday said.

The minister announced the project at the end of the three-day long Digital India Conference of State IT Ministers that concluded on October 3. The minister also shared that support extended for special assistance to states for capital expenditure worth Rs 2,000 crore.

The financial support for the project will be provided by the Universal Service Obligation Fund (USOF) for the deployment of towers. The government-owned Special Purpose Vehicle — Bharat Broadband Network Limited (BBNL) — will be used to deploy towers.

The USOF had nearly Rs 60,000 crore in its kitty at the end of August. At present, operators pay 8 per cent of their adjusted gross revenue as a licence fee. Of this 5 per cent goes into the universal service obligation fund (USOF) and the balance 3 per cent to the exchequer. The industry has demanded that since 49 per cent of USOF is unutilised, this levy should either be reduced or frozen till the funds are fully utilised.

The government has initiated many projects for rural connectivity utilising this fund, with the main scheme of USOF being BharatNet which aims to provide broadband connectivity to nearly 2.5 lakh gram panchayats. So far the fund has disbursed almost Rs 42,000 core to the BharatNet project, with limited success.