"As the NBN rolls out it does make sense to effectively relieve Telstra of the obligation of USO ... as you relieve that obligation you roll back to funding," Mr Lloyd told The Australian Financial Review.

"We do accept that Australia is a very challenging geography and communications services are essential. We're not suggesting that we leave any regional areas in the lurch."

In a submission to the Productivity Commission, which is reviewing the USO, Vodafone said any areas not yet covered by the NBN can be addressed through a revised set of consumer safety nets and specific subsidies until NBN can take full responsibility for the USO and there would be no need for ongoing industry funding.

"There is a fair point there, the core of our submission is that it really doesn't make sense for billions of dollars to flow to Telstra to subsidise legacy copper infrastructure and payphones," Mr Lloyd said.

Alternatively, Vodafone is proposing that an industry fund, which it and other providers could use, could be set up to invest in newer technology in areas in need of coverage.

"We do accept that there may be a need to continue (the USO), but in a smaller set of areas ... delivered by multiple technologies and multiple providers."

Telstra, for its part, supports changes to the USO, but does not believe NBN is ready to take on the responsibility and says the best strategy would be to conduct a review once the super-fast broadband network is complete in 2020.

"Telstra is supportive of changes to the USO if they improve the experience for customers, particularly those on regional and rural Australia. On that point we agree with others in the industry as well as many community groups," Telstra executive director of regulatory affairs Jane van Beelen said.

"But it is essential to keep in mind that the USO is a requirement to supply a high-quality voice service on request, no matter where the customer is. While NBN may be able to fulfil this requirement after their network rollout is complete, they are not likely to be in a position to do so until after 2020.

"Removing the USO prematurely would take away the certainty that regional and rural customers currently have."