The Cabinet approval for provisioning of mobile connectivity in 7,287 uncovered villages across five states will help bridge the digital divide and provide stimulus to the rural economy, industry body COAI said on Thursday.

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The move is in line with objectives of the National Broadband Mission of achieving universal and equitable broadband services across the country, S P Kochhar, director general of the Cellular Operators' Association of India (COAI), said.

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"It will help bridge the digital divide and bring remote villages under the digital map of India by enhancing seamless coverage, thereby providing a stimulus to the rural economy," COAI said in a statement.

The Cabinet on Wednesday cleared utilisation of the Universal Service Obligation Fund (USOF) for provision of mobile connectivity in 7,287 uncovered villages across five states at an estimated cost of Rs 6,466 crore.

These uncovered villages of 44 aspirational districts across five states of Andhra Pradesh, Chhattisgarh, Jharkhand, Maharashtra and Odisha, will get 4G-based mobile services.

The project will be funded by the USOF, and will be completed within 18 months of signing of the agreement.

The work related to the provision of 4G mobile services in identified uncovered villages will be awarded through an open competitive bidding process as per USOF procedures.

The plan for telecom towers covers 1,218 villages (3 districts) in Andhra Pradesh; 699 villages (8 districts) in Chhattisgarh; 827 villages (19 districts) in Jharkhand; 610 villages (4 districts) in Maharashtra; and 3,933 villages (10 districts) of Odisha.

Mobile connectivity in these villages will facilitate learning, dissemination of information and knowledge, skill upgradation and development, disaster management, and e-Governance initiatives.

USOF is aimed at providing financial support for the provision of telecom services in commercially unviable rural and remote areas of the country. It is an attached office of the Department of Telecommunications and is headed by the administrator, USO Fund, appointed by the central government.

The resources for the implementation of USO are raised by way of universal service levy, which is a percentage of the revenue earned by the operators under various licence.