In a move that could bring a relief to the loss-making state owned telco, Telecom Regulatory Authority of India (TRAI) recommended a subsidy of Rs 600 crore to BSNL. The subsidy would help BSNL in maintaining rural wireline connections installed before April 1, 2002. 

"Keeping in view the urgency of matter, considering that it would take some more time to issue a consultation paper and that time would also be taken in consultation process, the Authority recommends that a subsidy of Rs 600 crore purely as an ad hoc measure may be given to BSNL," TRAI said in a statement. 

The Department of Telecom ( DoT) had sought TRAI's recommendations regarding continuation of support from Universal Service Obligation Fund (USOF) towards the rural direct exchange lines (DELs) on expiry of Rs 2,000 crore per year subsidy on July 17, 2011. 

TRAI said that it has recommended the subsidy from USOF as it is not easy for the government to arrange additional funds for this purpose through the normal budgetary process. The arrangement however would be purely on ad hoc basis.

BSNL,had received Rs 2,000 crore from USOF for a period of three years from July 18, 2008 to July 17, 2011but on its expiry it had demanded 2,580 crore per year from USOF. It sought the assistance to cover up the deficit related to commercially non-remunerative on phasing out of Access Deficit Charge ( ADC) for sustaining its loss-making landline business across rural India.