The government will soon invite bids from telecom firms to provide broadband services in rural areas of the country under which the service providers get subsidy from the Universal Service Obligation (USO) Fund.

"Department will come out with tender for rural wireless broadband through USO Fund by the end of this month and is likely to cover 60,000 without giving the timeframe to achieve the target," sources in the Department of Telecom (DoT) said.

USO Funds was set-up in 2002 in order to provide mobile services and broadband connectivity in rural and remote areas of the country. As on December 31, 2010, the fund has a total of Rs 13,789.28 crore.

The resources for implementation of USO are raised through a Universal Service Levy (USL) which at present has been fixed at 5 per cent of the Adjusted Gross Revenue (AGR) of all Telecom Service Providers except the pure value added service providers like Internet, Voice Mall, E-Mail service providers etc.

Under the 'Rural Wireline Broadband' scheme of USOF, a total of 2,61,413 broadband connections and 2,506 kiosks have been provided till January 31, 2011 in the rural and remote areas of the country against a target of 8,88,832 connections and 28,762 kiosks by 2014.

Last week, President Pratibha Patil had launched DoT-USOF's pilot project Sanchar Shakti, which aims to provide useful information to women, about health, social issues and government schemes over their mobile phones.

The scheme, which is funded by DoT's USOF, is for mobile value-added services and information and communication technologies (ICT) related livelihood skills for Women's Self Help Groups.

In the Budget for 2011-12, Finance Minister Pranab Mukherjee finalised a plan to provide Rural Broadband Connectivity to all 2,50,000 Panchayats in the country in three years.

As per the Department of Telecommunications (DoT), rural broadband connectivity will cost around Rs 18,000 crore.